Statement from Jeff Newton, President of Canada's National Brewers

TORONTO, Dec. 9 2014 /CNW/ - Today's Toronto Star contains many false and inaccurate claims about the Beer Store.

The Beer Store does not make any profit. It operates on a break-even basis. This fact is clearly illustrated in the company's publicly available financial statements and was confirmed by Ed Clark, Chair of the Premier's Advisory Council on Government Assets in his recent report.

The Premier's Asset Council also correctly reported that the Beer Store is an open, efficient and low cost beer retailer that delivers significant benefits to small and large brewers alike. That openness and efficiency enables the Beer Store to give Ontario beer consumers the broadest selection and lowest average beer prices in the country - despite a 44% government tax rate.    

The Framework Agreement referred to in the Star was enacted by the Government of Ontario in June 2000 to facilitate the orderly modernization of Ontario's beverage alcohol retail system while maximizing revenue to government. Prior to the Framework Agreement's signing, the LCBO was using its regulatory powers in a way that limited the Beer Store's ability to serve Ontario consumers – they were refusing to approve the opening of new Beer Store locations. The Framework Agreement was designed to resolve this issue and enable investment in, and the orderly expansion of, Ontario's beverage alcohol retail system – to the benefit of Ontario consumers.

Since the Framework Agreement was enacted, the Beer Store has invested approximately $150 million in improving its retail and wholesale systems for brewers and consumers. The Beer Store has: increased its store network from 427 stores to 451 stores, it has added 25 modern new self serve locations in the last 5 years, renovated 100 stores in the last two years and added more than 125 Retail Partner stores in smaller Ontario communities. Since 2000, the number of brewers selling at TBS has increased from 50 to 105, the average beer price paid by consumers has declined by almost 13% in inflation adjusted terms, and government alcohol tax revenues have increased by more than $1B annually. Clearly Ontario's alcohol retailing system and the Framework Agreement are working. 

As the Premier's Asset Council recently reported – the government generates more tax revenue when beer is sold through the Beer Store. That's because the government does not pay anything for the operations of the Beer Store. All Beer Store costs, including its 451 stores and 7,000 employees, are paid for by brewers. At the higher-cost LCBO, government tax revenues subsidize its $818 million annual operating cost.  

SOURCE: Canada's National Brewers

Bill Walker, MidtownPR, [email protected], 416-624-3936