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

TORONTO, Dec. 10, 2014 /CNW/ - The following is a statement from Jeff Newton, President of Canada's National Brewers:

"The allegations made today by Restaurants Canada are false and inaccurate, building on misleading and inaccurate statements reported this week by the Toronto Star.

Restaurants Canada's claims that the Beer Store sets beer prices and that the LCBO/Beer Store Framework Agreement controls beer prices are both categorically false and misleading. 

As has been made clear repeatedly, the more than 100 brewers that use the Beer Store system are free to set their own prices in an open and competitive market.  Moreover, the Beer Store is an open and accessible platform.  Any brewer in the world can sell at the Beer Store. Unlike the LCBO, the Beer Store will not refuse any brewer a listing within its stores.

The Competition Bureau of Canada has had the Framework Agreement for a long time.  The Bureau has never advised the Beer Store or its shareholders that it views the Framework Agreement as anti-competitive or that it is in any way contrary to the Competition Act.

The Framework Agreement resolved a number of regulatory conflicts between the LCBO and TBS. It was developed under the direction of the Provincial Ministry of Consumer & Commercial Relations, to which the LCBO reported at the time, and followed a three-year process of discussions between TBS, the LCBO and the Government of Ontario. It's enactment was deemed necessary because the LCBO was using its regulatory power to approve new Beer Store locations to block Beer Store investment in opening new retail locations.

In short, the Framework Agreement is not relevant for matters pursuant to the Competition Act, a federal statute.  It is an agreement between the provincial government regulator and the company tasked by regulation to sell beer in Ontario, and it is designed to ensure the orderly and efficient expansion of the Ontario alcohol distribution industry. 

It is well known that matters with respect to the beverage alcohol industry are the exclusive jurisdiction of the provinces and not the Federal Government or the Federal Commissioner of Competition. 

Restaurants Canada is encouraging a policy that would increase beer prices paid by consumers at the Beer Store and LCBO.   While the regular consumer would pay more for beer, Restaurants Canada's members would enrich themselves by paying less. 

That, despite the fact that Restaurants Canada members already profit significantly.  For example, on a $5.50 bottle of beer purchased at a bar in Ontario, 60 per cent of the revenue goes to the bar -- with the government taking another 19 per cent through taxes."

SOURCE: Canada's National Brewers

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