I try not to get too political here (I tend to save that pleasure for in-person hangouts) but the Ontario provincial government has been making waves in the craft beer world this week and I thought you should know about it.
The recently-elected premier of Ontario, Doug Ford, announced a new ‘buck-a-beer’ program this week. I didn’t remember until this program was announced that the government mandates a minimum price of beer, and until this announcement it was set at $1.25 per beer. The new program (set to roll out over Labour Day weekend) sees that minimum price dropped by 25¢ to $1 per beer.
There’s lots of verbal encouragement in the official announcement, but not a lot of monetary one. No grants, no incentives, no rebate schemes. Just a government saying they’d like something to happen.
What does it mean for Ontario craft beer?
It might mean that Ontario craft breweries have the chance to enter the homes of a whole new slew of Ontarians.
Or it might be something that’s too good to be true.
Craft breweries are also businesses, and they price their product after a great deal of care and consideration. Most Ontario craft breweries know full well that they can’t compete with the big guys on the mass scale at which they produce their beer, so instead they focus on product quality and hope that Ontario beer lovers will enjoy what they make. Many of them do, including myself.
This doesn’t usually make them a ton of money, though. Many breweries are bringing in the minimum amount of profit they need to sustain their business and, hopefully, grow a little year over year. Asking them to reduce their prices, often by much more than 25¢, leaves them with nothing less than an existential quandary.
So far only one Ontario craft brewery, Barley Days in Picton, has announced their intent to participate, in contrast to the many other breweries who have said they’re not interested in the program.
Who really benefits?
On first glance, beer drinkers everywhere. I mean, who doesn’t want to spend less money on beer? Or get more beer for less money? This value-hunter loves that prospect. But then I realized that I’m not currently buying the cheapest beer available, which is the beer most likely to go down to a buck a beer. Nor do I really want to buy that beer, because it’s cheaply made so that it can cost that little and still make a profit. So I’m not sure beer drinkers everywhere stand to benefit here.
Maybe it’s the beer makers that would benefit from this situation, not us drinkers. But, knowing what we know about craft beer’s emphasis on product quality and the profit margins of the Ontario craft beer scene, it doesn’t seem likely that many craft breweries will even participate, much less benefit.
So maybe it’s the the big guys who’ll benefit here – your Labatt or Coors. They make beer on a scale that might make a price reduction at least feasible, if not profitable. I’m not sure any business is very interested in working to reduce prices, though, and I can’t find any beer currently for sale in Ontario that is actually sold at that price. For example, my favourite cheapie from my university days, Lakeport Honey, currently retails for $35.50 for a case of 24 bottles, or $1.48 a bottle.
Ultimately (and unfortunately), it’s unclear whether anyone will benefit from this program. I guess we’ve got a couple of weeks until we find out.