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TORONTO—Small brewers in Ontario are pushing for changes to one of the world’s more unusual
beer-selling environments.

Craft Beer Cries Foul

About 80% of retail beer sales in Ontario occur in a chain of stores that’s jointly owned by Canada’s
three largest brewers: Anheuser-Busch InBev NV, Molson Coors Brewing Co. and Sapporo Holdings
Ltd. Between them, those brewing giants account for about 88% of Canada’s beer sales.
Jeff Newton, a spokesman for the Beer Store, declined to comment on the smaller brewers’ proposals,
calling the discussions “a private matter.” He did say, however, that any brewer can get its products into
the Beer Store by paying a listing fee, and smaller brewers pay lower handling fees for their products.
He notes that the open system differs from traditional retail environments in Quebec and the U.S.,
where smaller brewers often struggle to get their products on store shelves.
“The system as it exists contributes significantly to enabling so many of these guys to thrive,” Mr.
Newton said, referring to the craft beer makers.
“They have complete, unfettered access to all our stores in a market of 13 million people,” Mr. Newton
said. Sales from Ontario’s smaller brewers rose 8% by volume in the chain last year, compared to flat
performance for all beer, he said.
Greg Taylor, co-founder of Toronto’s Steam Whistle Brewing, one of the province’s leading craft
brewers, said “it’s great” that all brewers can get into the Beer Store. “The problem is, there’s an
imbalance of opportunity to market your products within those stores,” he said. He would like more
opportunities, for instance, to have Steam Whistle’s products showcased in displays in store lobbies.
At about 60% of the Beer Store outlets, consumers go to a counter to order beer from a menu, akin to
ordering at a fast-food restaurant. Mr. Hay of the craft beer trade group said that format favors bigger
brewers with large advertising budgets.
At the other 40% of Beer Store outlets, where consumers pick their beer from coolers or pallets, shelf
space is generally allocated based on market share. That means a customer is more likely to see a lot of
Coors Light than a Canadian craft brew.
Any retooling of the Beer Store could have wider repercussions for brewers and consumers in Ontario,
which is the largest province for beer sales in Canada, accounting for 36% of the country’s sales by
volume.
Ontario’s retail system dates to the end of the province’s own Prohibition era in 1927. The provincial
government controlled wine and liquor sales but left domestic beer to private operators. Over the years,
consolidation in the brewing industry whittled the number of brewers that owned the retail network to
just Anheuser, Molson and Sapporo.
In the U.S., post-Prohibition rules generally bar brewers from owning retail operations, a framework
designed partly to curb anticompetitive practices.
In Ontario, beer, wine and liquor aren’t available in grocery, convenience and mass-merchandise stores.
Consumers wanting to buy liquor or wine to take home generally must shop at one of about 600 stores
run by the Liquor Control Board of Ontario. Those stores sell beer, too, but mostly in smaller package
sizes.
Canada’s beer market is valued at $16 billion, according to market-research firm Euromonitor
International. Molson Coors and Anheuser’s Labatt unit each have about 42% market share, while
Japan’s Sapporo, which bought Canada’s Sleeman Breweries Ltd. in 2006, has about 4%.