Ottawa brewers push back against Ontario government’s buck-a-beer incentives

Beer

Ontario launched its buck-a-beer plan Tuesday by offering "non-financial incentives" to brewers who sell their beer for $1, a move some Ottawa craft brewers are labelling as unrealistic.

Speaking this week at a brewery in Picton, Premier Doug Ford said participating businesses will be offered prime spots in Liquor Control Board of Ontario stores, or advertising in flyers or inserts, among other possible rewards.

The Progressive Conservative plan will also lower the minimum price of a bottle or can of beer with an alcohol volume below 5.6 per cent to $1 from $1.25 starting Aug. 27 – a few days before the Labour Day weekend.

Brewers would not be required to charge less, however, and the lower minimum price would not apply to draft beer, nor would it include the bottle deposit.

Several local craft brewers have questioned the feasibility of selling their small-batch beers for a dollar. Ottawa-based Dominion City Brewing Co. said in an Instagram post that it “is impossible to sell a beer for a dollar without compromising quality.” Instead, the brewery announced it would sell its own forthcoming “Buck-A-Beer” beverage, with a dollar from each sale going towards efforts to integrate refugees into the city.

Rob McIsaac, co-owner for Ottawa’s Beyond the Pale Brewery, told CBC Ottawa that while bigger brewers’ high-scale production might allow them to hit the $1 target, it would mean selling every beer at a loss for the smaller guys.

“I don’t know if we could actually sell canned water for a dollar,” he said.

The Tories have said a return to buck a beer would see more competition in the beer market without affecting the province's revenues from beer and wine taxes, which government documents show brought in roughly $589 million in 2016-2017.

Ford said the program, which was one of his promises during the spring election campaign, will not cost taxpayers anything.

"Nobody is being forced to lower their prices and there will be no subsidies or tax handouts," Ford said, calling the move a "win-win."

Asked whether he was concerned that cheaper beer might contribute to substance abuse and other harms, Ford said he trusts Ontario consumers to make smart choices when it comes to alcohol, regardless of the lower price.

"If beer goes up in consumption over what – 20 cents, 25 cents? We're just trying to put money back in the consumer's pocket," he said. "People in Ontario are mature enough ... to know when they've had one too many."

Ontario previously had buck-a-bottle beer but the then-Liberal government quietly hiked the minimum price in 2008, citing its "social responsibility" mandate.

Some breweries elsewhere in the province were quick to say they would not reduce their prices, while others in the industry said the plan was financially unsustainable.

"You definitely won't see #FreshGLB take part in this," the Toronto-based Great Lakes Brewery wrote on Twitter. "We believe in our brands, take pride in our quality and firmly feel that are current prices are very fair."

Eric Portelance, who co-owned Halo Brewery in Toronto until earlier this year, said the buck-a-beer challenge is "insulting" to brewers and distorts the market by devaluing their product.

"When I ran my brewery we never made beer anywhere close to this cheap because of all the corners that need to be cut were unacceptable to us. It was difficult for us to make beer anywhere less than $2 per short can in costs alone," he said in an open letter to the government.

"You are also 'challenging' brewers to eat their margins at a time when their costs are going up significantly as a result of steel and aluminium tariffs which will impact the costs of equipment and aluminium cans. You couldn't be more tone deaf on this subject."

Steve Himel, co-founder and general manager of Henderson Brewing Co., also slammed Ford's program.

"Nobody can make beer at $1 a bottle with the Ontario and federal taxes as they are. I don't know if his plan was to make the breweries look greedy or just to underscore his populist direction, but it is ridiculous," he said, adding the move ignores the shift towards more complex and well-crafted beer.

Ford has also vowed to expand the sale of beer and wine to corner and box stores.

The premier was also asked about his plan for the sale of cannabis once it becomes legal in October, after some published reports said the province would allow private sector sales. Ford would not confirm or deny the reports, saying only that an announcement would come later.

- With files from OBJ.