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Beer and Grocery Stores

grocery store liquorThe past few days have been ones filled with much debate in other parts of Canada around the pros and cons of selling liquor in grocery or convenience stores. In B.C., the government recently accepted all of the recommendations of a report, including one proposing liquor sales in grocery stores (see a news piece summarizing it). This is something of a reversal as a couple of months ago the government was cool to the idea (read my post here).  Over in Ontario, a war of words has broken out between the owners of the Beer Store (the big three multinational breweries) and the Ontario Convenience Store Association over the predicted effects of any move to selling beer in convenience stores (see the Canadian Beer News post for a summary, relevant links, etc.).

Currently, only Quebec allows beer and wine sales in convenience stores, as well as in grocery stores. Ontario allows limited wine sales in grocery stores. No provinces allow hard liquor sales outside liquor stores. News reports around the B.C. decision erroneously reported that Nova Scotia allows sales in grocery stores. This is not accurate; some NSLC stores are adjacent to grocery stores, with indoor and stand-alone access. However they remain separate entities.

Politicians have been stirring up debate in recent years around this issue, with Conservative opposition leaders in both Nova Scotia and Ontario calling for grocery and/or convenience store sales. The governments in both provinces have rejected those calls. B.C. is the first province (outside Quebec) to agree, at least in principle, to the idea. To be clear, beer fans, don’t expect to find your favourite brew alongside the dairy cooler anytime soon. As the government has only accepted it in principle, which means people are in a for a long wait to see changes.

I often become jaded watching these debates because I can’t find anyone who I can trust is arguing on behalf of the consumer. Everybody, of course, wraps their arguments in the flag of “public interest”, but I find you can scratch their rhetoric like a lottery ticket to reveal their real agenda. Is it really a surprise that convenience stores are pro-open sales, the Beer Store and liquor commissions are for restrictive sales and existing private liquor stores want stand-alone sales?

I don’t have time today to fully analyze the issue. But I have long pondered the merits and demerits of the various approaches to retail sales. For now just a couple of observations must suffice.

Advocates for grocery/convenience store sales usually tout prices as a reason to loosen sales restrictions. More points of sale leads to lower costs, they argue. This is a dubious proposition, in my mind. Privatization experience in Alberta suggests that marketized retail does not necessarily lead to lower prices. Similarly, claims of enhanced product diversity rests on faulty logic. The amount of available shelf space in a convenience store for the kind of beer readers of this site prefer will be significantly smaller than a dedicated liquor store. Grocery stores have a bit more room, but will need to decide if their profit margins on alcohol are higher than the products that will be displaced (another argument against price decreases).

My personal experience is that the average grocery or convenience store has a pretty weak selection of craft beer (I can’t really speak to wine). Understandably they tend to devote their limited space to the biggest volume sellers, in other words corporate macro beer. This is not unlike Alberta’s situation with its private liquor stores. When I am in Quebec I have learned to seek out the handful of places that have made a commitment to a broader selection. In Ontario, it is to LCBO, rather than the Beer Store, where quality craft beer can be easily found.

My assessment to date is that grocery store sales will not work to the advantage of a craft beer consumer, or to craft breweries. The buyer of Bud Light will gain some convenience at having their favourite beer closer at hand. However, they are unlikely to end up saving money for that convenience (as in most things, convenience usually costs more). I also think craft breweries have little to gain from grocery sales, as it will be just one more place for the big boys to flex their muscle at the expense of the little guy.

The more I watch this debate, the more I am inclined to keep a close eye  on who really benefits from the respective proposals, and pledge to remain mindful that no one is truly speaking out for the consumer here. Or the craft brewer.

7 comments to Beer and Grocery Stores

  • I was surprised at the selection of (big name) craft beers available when I pulled into a gas station in Northern Idaho. Sure, there was lots of Bud Light (LOTS) but there was a presence. Clearly the local market demanded a certain selection of recognizable but quality craft beers. Like anything, the types of beer stocked will depend on demand. If craft beer flies off the shelves, more space will be dedicated to it, more variety will be available. If it sits gathering dust, we have nobody to blame but ourselves when SABeinekinINoorsBEV dominates the market. The answer is obvious. Heavy drinking.

  • Hi Jason, I’m a big fan of your work. Thanks for all the great research and writing.

    On behalf of the consumer I offer these:
    http://brewscout.wordpress.com/2013/07/02/beer-goggles-for-everyone/ and
    http://brewscout.wordpress.com/2013/06/20/bringing-ontario-up-to-date/ (written this past summer)

  • On recent trips to Phoenix and Hawaii, I went to Costco and checked out their stocks. I was surprised to note that they do NOT carry all the majors brands. I was informed that Costco sets their prices, and if the big boys don’t want to meet it, Costco won’t carry it. Did find some ‘smaller’ brands, including Deschutes and Craft Brew Alliance (ABInBev owns 32%). In Hawaii at least, Walmart and other grocery stores did have a fairly good selection (Sack N’ Save was really well stocked), although not as good as any of the stand alone liquor stores.

    My wife’s favourite was Pacifico at Costco – $18 for a 24, cheaper than I’ve seen anywhere else.

    • beerguy

      To reply to both Greg and Owen. I know that US stores can have an impressive selection (prices are rather non-comparable due to taxes). I guess my argument is that Canada’s market is not yet developed enough to create a similar situation. I also suspect that beer guys like the two of you research where to go to get good beer, just like I do in Montreal. Maybe this isn’t an argument against beer in grocery stores, but it is an observation about how Canada is behind the US around this stuff. I acknowledge it takes more thought. Thanks for the comments.

  • Graham

    I’m just waiting for your article on the Alberta craft beer price war…I’ll check back in 5 years. Until then I will avoid the dusty, warm-stored bottles of what should be awesome beer sitting on the shelves. Great selection, terrible pricing, not-enough turnover…taking the good with the bad out here. You can have all the subsidies, tax-breaks, regulation changes in the world and unfortunately importers and brewers are not going to pass them on to AB consumers so frankly…why should I care about any of this?

  • Chuck

    The beer store in Huntsville has not had an upgrade in 35 years– must not be making any money. I have been told that this is the busiest store in Ontario. I go to the modern beer store in Bracebridge because the Huntsville store lineup is long and the staff are lazy and rude.
    I welcome the convenient store / beer store.
    Can’t wait for Costco in Barrie to sell beer like they do in Quebec.

  • chris

    For me its more about the fact that in Ontario we’ve ceded the manufacture, distribution and retail sale of beer to foreign a foreign multi-national cartel. More and more depanneurs in Gatineau, Quebec are carrying craft beers (because customers are demanding it) and competitive pressures will force others to jump on board. Your blog is thoughtful and I enjoy reading your take but just as in Quebec, Ontario customers will dictate what private stores stock (if in that happy event the evil beer cartel is shut down)and good craft beers won’t have any trouble being represented.

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