Niagara, August 9th, 2018 | The Government of Ontario has recently announced its Buck a Beer policy. This program offers no direct financial incentives but lowers the price floor for beer to $1 and will offer LCBO shelf space and promotional advantages to breweries who lower their price to that floor.
Breweries in Niagara and across Ontario have assured both the GNCC and the Province that a quality beer cannot be brewed for $1 per unit. To meet this challenge, Niagara’s breweries would have to make enormous compromises on quality and abandon the reputation for outstanding beer which they have so painstakingly built.
The cost of living is rising in Ontario, and that includes not merely the necessities of life but also its pleasures. The cost of beer is being driven upwards by federal excise tax increases, for instance, and we certainly understand that the Government of Ontario wishes to reverse that trend for Ontarians. However, as Beer Canada has pointed out, the reason why beer has become more expensive is not the price floor, but the large tax burden imposed on beer, which the government has not acknowledged.
Buck-a-beer effectively promotes those firms able to meet the $1 price floor and penalizes those which cannot. Despite what the government has said, promotional preference in the LCBO offers an enormous advantage and does carry a quantifiable financial value.
The breweries which will be able to meet this challenge are the giant international firms which can harness great economies of scale, which brew lower-quality beer with ingredients and additives that reduce both price and quality, which buy aluminum in bulk with guaranteed pricing, and so on. Among the biggest breweries in the world with a Canadian presence are American brewer Molson Coors, Chinese-owned Tsingtao, Belgian-Brazilian firm Anheuser-Busch, Dutch brewer Heineken International, and the Danish Carlsberg Group.
None of the ten biggest breweries in the world are even Canadian-owned, let alone based in Ontario. Buck-a-beer effectively offers government-sponsored market advantages to large, foreign-owned businesses at the expense of small Ontario employers.
In this era of trade wars and international uncertainty, the GNCC will continue to support local firms, and we urge the Government of Ontario to do the same.
The Greater Niagara Chamber of Commerce is the largest business organization in Niagara and the third-largest Chamber of Commerce in Ontario, with 1,600 members representing 50,000 employees. More information on the GNCC is available at gncc.ca.
Mishka Balsom, President & CEO, GNCC
Mishka@gncc.ca or 905-684-2361