Wednesday, 16 July 2008

Ontario's Beer Monopoly

Life is tough if you happen to be a beer drinker in Ontario, where you can only buy beer at "The Beer Store:"

Six out of 10 people think The Beer Store is a government entity similar to the Liquor Control Board of Ontario, according an independent survey for a review of the distribution and sale of alcohol in Ontario.

In reality, the retail chain responsible for just over 80 per cent of beer sales in Ontario "is essentially a private monopoly" owned by the province's three largest brewers, Labatt, Molson and Sleeman, the provincial study noted.

Who pays for this government enabled private monopoly? The consumer, of course:

A 24-pack of popular brands, such as Coors Light, is regularly priced at $36.95 in Ontario, at least 25 per cent more than in such markets as Quebec and New York State, where beer is almost always on sale.

A Beverage Alcohol System Review recommended opening the beer market to more competition, but lawmakers refused.

As usual, the road to this particular hell was paved with good intentions, and to this day the owners of The (Monopoly) Beer Store insist that they "uphold the founding principles of what was originally a co-operative, ensuring access to all brewers and brands."

Why do I call this a failure of government rather than a failure of the market? The only reason the monopoly is able to exist is because competition has been restricted:

Convenience store operators have long wanted to take over beer and wine sales, partly to help offset declining sales of tobacco... [and] restaurant, bar and hotel owners, would love to be able to sell booze for "off-premise" consumption.

Until the market is freed, it won't work: the problem here is not an excess of capitalism, but rather a dearth of it! To this end, some people have decided to do something about it. Like Alan at A Good Beer Blog, I've signed the petition and would encourage you to do so too.

1 comment:

Douglas said...

Looks like real opportunity for those who cater to the home brewer...