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Wednesday, August 21, 2019

Buck-a-beer policy should signal a move away from nanny-state policies

Populist – in the appeal-to-Joe-Sixpack sense – and likely popular, the buck-a-beer pledge by Doug Ford is now official policy. It’s another example of the premier moving quickly on campaign talking points.

The minimum price floor for beer will be lowered to $1 as of August 27, at least on beer with an alcohol level below 5.6 per cent.

“We were elected on a promise to reduce red tape and put the people first,” Ford pronounced while touring a brewery in Picton. “This included a promise to bring ‘Buck-a-Beer’ back to Ontario. Today I am proud to say: Promise made, promise kept.”

The move reverses increasingly nanny-state beer, wine and liquor prices introduced by the previous Liberal government. Oh, it’s still a nanny state, though marginally less so when it comes to alcohol purchases – we’re in no way approaching realistic pricing found in many other jurisdictions, including those much more progressive than Ontario.

To encourage brewers to lower their prices, Ford formally launched the ‘buck-a-beer challenge.’ Any brewer who agrees to lower their prices on or after August 27 will receive LCBO promotional considerations such as limited-time discounts, in-store displays on end aisles and shelf extenders, or advertising in LCBO flyers and newspaper inserts.

“Give the tax payers a break and let them have 24 cans of beer for 24 bucks. I think it’s a great deal,” Ford said in his appeal to brewers.

“The days of the government putting its hand in your pocket each time you buy a two-four or six-pack is over. Instead we’re going to do what we said we would do and put Ontario consumers first.”

Annual indexing imposed by the Liberals for all packaged beer will be suspended to maintain the $1 minimum floor price over time under the new policy. Ford did not, however, make any remarks about campaign pledges to allow for a more, well, liberalized approach to alcohol sales, including beer and wine in corner stores. That said, you can bet Ford won’t shy away from the issue of opening up the market, which previous governments talked about repeatedly while doing very little. It was only under pressure for the consequences of poor policies – most notably a longstanding deal granting near-monopoly status to The Beer Store cartel – that things began to change, coupled with Kathleen Wynne’s desperate attempts to find popular policies while she clung to power.

There will be battle lines drawn on this – excluding the whinging of nanny state apologists. On the one side, corner store owners say liberalizing beer sales would provide us with more convenience while giving a boost to smaller brewers given short shrift by a retail system controlled by two major players (Molson Coors and Anheuser Busch Inbev) and, to a lesser extent,  Sleeman (Sapporo), with all three being foreign-owned. On the other side, the quasi-monopoly claims allowing beers in convenience stores will lead to higher prices and fewer controls.

Both are clearly intent on looking after their own interests, not yours or mine. It’s up to us to determine which position benefits us most. I’m tempted to side with more openness, but only if that means lower prices due to the competition of large retailers such as grocery stores.

Ford’s announcement and any follow-up moves will be welcomed by most Ontarians subject to runaway taxation, as taxes make up about half the cost of a bottle of beer.

Beyond the beer itself, the ever-increasing taxation and nanny-state floor pricing is one small example of the disregard governments have for our wallets.

But back to the beer. Though demand is down by about 10 per capita, in part due to high taxation, beer remains Canada’s most popular alcoholic beverage, making up over 40 per cent of total alcohol sales through liquor boards and other retail outlets. We bought the equivalent of 223 bottles of beer per person during 2016, for instance. All the beer is good for more than just masking our concerns about governments, however, as our consumption and foreign demand for Canadian-brewed beer accounted for $13.6 billion in economic activity in 2016.

The public ire Ford is tapping into is simply a reflection of our inherent dissatisfaction with taxes and paternalistic liquor laws, coupled with our distrust of pretty much anything overseen by bureaucrats and politicians. Tax increases are seen as another reason to privatize the operation, stripping government of its outdated controls of alcohol.

Yes, the LCBO stores themselves have come a long way over the years. They’re much nicer places to shop, especially compared with The Beer Store, that even more antiquated government-sanctioned cartel selling us our suds. The hours have been extended, but there’s nothing like the convenience found in other jurisdictions. Nor the selection. And, most gallingly given that the LCBO is the world’s largest buyer of spirits, nothing like the much better prices found elsewhere.

If the LCBO really wants to be accepted, cut the prices significantly, offer a much better selection (something akin to a grocery store in Tonawanda would be a start) and offer more convenience.

Touching on the longstanding debate, if beer and wine were sold more widely in grocery and convenience stores, it would benefit smaller breweries, which are now dependent on a retail channel owned and controlled by their much larger competitors.

Pricing is a big issue. In parts of Europe, you can find very drinkable wines for under $3 a bottle. Imports from Australia and the U.S. that run $15 to $20 here can be had for a third of that price. That tells you it’s all about mark-up and taxes – as noted, successive spendthrift governments are addicted to the LCBO profits, not to mention the tax revenues.

Where we might be inclined to drop a few bucks on a new Ontario wine or craft beer, the government’s pricing often precludes that option. Backwards policies make it even more difficult for upstarts to reach consumers. As a consequence, the industry suffers.

What’s really needed is a cultural shift to something more European in flavour when it comes to booze: treating adults like, well, adults.

Steve Kannon
Steve Kannonhttps://www.observerxtra.com
A community newspaper journalist for more than two decades, Steve Kannon is the editor of the Observer.

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