Comparing the price of suds

Beer drinkers of Ontario are reportedly spending more money for their brew — an estimated $9.50 more per case. And that’s a lot of money to gulp down.

In a recent study, Anindya Sen, an associate professor at the University of Waterloo, found that Ontarians are paying significantly more money for a 24-bottle case of beer than Québecers. Sen followed the pricing trends of Molson Canadian, Molson Dry, Coors Light, Budweiser and Bud Light, and found that Québecers are paying about $25.95 per case.
Ontarians are paying around $35.56 for the same beer.

“I collected data on beer prices for five leading brands over a 22-week period from The Beer Store website,” Sen explained. “I then compared it with prices for the same products which were available at major Québec retail trains like IGA and Metro.”

The question then, arising from beer enthusiasts across the province, is ‘why?’

“Québec beer prices are lower and can be attributed because it’s a more competitive retail market,” Sen explained. “And the prices are determined by the market.”

Sen broke down the beer market into three simple categories: the manufacturing, the wholesale and the retail.

“When you look at manufacturing, there shouldn’t be much of a difference,” Sen said.

The manufacturing, or the actual brewing of the beer, is universal across the nation: beer is made and then sold at wholesale.
It’s actually in the retailing stage where Sen says things are a little backwards.

“In Ontario you have a one-ended base, you have one supplier who’s allowed selling beer,” he said. “The only place you can go to is The Beer Store.”

“It’s basically a monopoly,” he stated.

In the simplest of terms, Ontarians are spending more money for their beer because there is a lack of competition from retailers. The Beer Store is a trading name under Brewer’s Retail, which is the only retailer permitted to sell beer for “off-site consumption.”

With the exception of local breweries and the provincially owned Liquor Control Board of Ontario (LCBO), the act has disallowed for any beer or liquor to be sold at any other site.

Therefore, there is no incentive to bring prices down.
But it’s not just Québecers who are getting a better deal than the Ontarians.

“I can say from personal experience, because I lived in Calgary for 16 years, that the alcohol there is so much cheaper,” said Peter Gustainis, a Waterloo resident who until recently, lived in Alberta.

“Coming to Ontario, it is quite stark looking at the differences in prices,” he said.

“There’s no inherent competition and so no one has the need to lower prices or to give special deals [and] I think that’s one of the major flaws from having it as a provincial system,” Gustainis added.

But The Beer Store is not even entirely Canadian.

Three parties joint-own Brewer’s Retail: Belgium’s Anheuser-Busch InBev and Molson’s Coors Brewing Company stemming from the United States, and Sapporo of Japan.

“None of these companies are Canadian-owned now, but have manufacturing plants in Canada,” Sen continued. “Yes, they do employ Canadians, but the profits are going to shareholders in different countries.”

Sen, however, believes there is a silver lining. To him, high beer prices are correlated with a lower demand and a lower “social cost.”

But for many Ontario beer drinkers, the shocking reality of being over-charged has not been received well, particularly with students.

“This is unfair,” said Laurier fourth-year student, Alex Hughes. “Do I want to pay $37 for a 24 of Corona when I can buy that in the [United] States for $22? These prices are a joke.”
Some Ontario residents have spoken out against the elevated prices. Last summer, an online petition on freeourbeer.ca calling for beer and wine to be available in convenience stores collected over 110,000 signatures and was presented at Queen’s Park.

“This is legislation that can be easily changed,” Hughes said. “You can keep The Beer Store, just open up the market. The only way this can become a relative policy issue is if people make it a policy issue.”

“It’s ultimately a societal choice.”