Letter to Premier Ford

Thursday, August 9, 2018

Dear Premier Ford,

On behalf of the Greater Niagara Chamber of Commerce, the 1,600 businesses we represent, and Niagara’s craft breweries, I wish to communicate our dismay at the buck-a-beer policy your government has recently announced. On behalf of Ontario’s breweries, we ask you to rethink this policy.

We understand that 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 your government wishes to reverse that trend for Ontarians.

The craft brewery industry has assured us, as it has assured your government, that a quality beer compliant with, for example, German purity laws, cannot be brewed and sold for a dollar. Ontario’s booming craft brewery industry simply cannot meet the $1 price floor without severely compromising on quality, which would harm their reputations both here and in other markets. Understandably, Ontario’s craft breweries do not want to compromise their quality. They have acquired a reputation for beers which surpass those of the international giant breweries and which are worth the price premium they command. As in all things, one gets what one pays for.

Your program, which offers no direct financial incentive but which will offer greater promotion in the LCBO to breweries offering a $1 SKU, will effectively promote those firms able to meet this price floor and penalize those which cannot. Despite your promise that no financial incentive will be offered, you must recognize that 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 breweries which can harness great economies of scale, 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, the Dutch brewer Heineken International, and the Danish Carlsberg Group. You will note that none of the ten biggest breweries in the world are even Canadian-owned, let alone based in Ontario. We are concerned that your policy therefore effectively offers a subsidy to large, foreign-owned businesses at the expense of small Ontario employers. It cannot be emphasized enough that this policy is the opposite of what we hope for and expect from a government committed to business growth and prosperity in Ontario.

On behalf of Niagara’s brewery industry, we hope that you will abandon this policy. To make beer truly more affordable in Ontario, the answer, as Beer Canada has opined, would be to cut taxes on the product rather than challenging Ontario’s breweries to compromise their quality in order to meet an arbitrary price point. The buck-a-beer program virtually guarantees that Ontario businesses will be less able to compete with foreign imports. We hope that you will consider our businesses and the Ontarians that they employ in your final decision on this policy. In Niagara, we will urge residents and businesses to avoid the Buck-a-Beer program and support their local breweries.

Yours sincerely,

Mishka Balsom
President & CEO, Greater Niagara Chamber of Commerce

CC: Sam Oosterhoff, M.P.P.
Jeff Burch, M.P.P.
Jennie Stevens, M.P.P.
Wayne Gates, M.P.P.