4 Reasons why Grocery Store Beer Sales won’t help you

By Tyler Turek

Last week the Government of Ontario announced 76 new grocery stores will be licensed to sell beer & wine. This number puts the total at over 200 stores. What does this mean for you, the craft beer consumer?

There are some perks. More shelf space for some of your favourite brands, for instance. Maybe a local grocery chain is more convenient for you.

Yet it will not solve most problems for curious craft drinkers like you and I. Here are four reasons why I am not as convinced of the benefits.

1) Licenses are often given to major chains located in the same area as LCBOs. In my neighborhood (Oxford/Wonderland intersection in London), they share parking lots and landlords. The newest store announced this week will be located at 3040 Wonderland Road South, across the from LCBO at 3050 Wonderland South. In total, three of London’s seven beer-selling grocery stores are within a 3-minute walk of existing LCBOs.

Licensed grocery stores are set up to compete with government stores, not to service thirsty areas lacking easy access to beer. I have had several LCBO employees admit frustration that they have lost beer sales to the grocery store down the street. While the LCBO is imperfect, it has better product and service than your local Walmart.

Here’s a rough map locating licensed grocery stores (purple and yellow tag), the forthcoming grocery retailer (purple dot) and LCBOs (red dot). Note how London east of Highway 4 is underserviced.

2) Selections do not vary much by store. Distribution deals are negotiated at head office, not local outlets. The same major brands that are widely available because they can ship cheaply in bulk. True, some non-LCBO beers and ciders are available at grocery. But you’ll see about 90 percent redundancy over what you’ll find at the government store across the parking lot. More of the same!

3) Grocery store licenses are hurting your local LCBO craft section. It may be coincidence that new licenses are been given just as the LCBO union, OPSEU, has voted 93 per cent in favour of a strike. But likely not. The union claims grocery sales undermines their mandate. Fear of “creeping privatization” also means fewer full-time staff, insecure working hours, and high turnover. The person responsible for ordering new seasonal beers will not be able to build good relations with breweries in this environment.

4) Breweries do not benefit much. Pricing remains the same as the LCBO, so major retailers and the government take 30–40 percent of retail cost (why it’s best to buy direct from breweries!) They also don’t reach many new markets. Corporate bureaucracy and heavy regulation mean that it is not easier to sell via billion-dollar grocery chains.

Exclusive and small-batch brews are less likely to end up on grocery shelves as in other outlets. In the end, it’s more of the same. The major difference is your beer money goes to multinational shareholders rather than your provincial Crown Corporation or local brewhouse.