Canadians are serious about their beer. In fact, the price of beer is now causing serious strife in the Great North. You see, Canada has minimum pricing on alcohol. And, Ontario’s newly installed Premier, Doug Ford, just followed through on a campaign promise to drop the minimum price of beer to one dollar a can. While that sounds good on paper, Ontario’s craft beer community is bubbling over with rage about the move; the brewers contend that the government is pressuring them to drop prices so low that they can not cover their costs.
In 1993, the Liquor Control Board of Ontario (LCBO) instituted minimum pricing on beer. Then in 2008, the government raised the minimum price to C$1.25. The concept was that more expensive alcohol would spur “social responsibility”; basically, the rule’s creators believed that if beer cost more, people are less likely to drink to excess.
At the time, Canucks grumbled a bit, but the change was ultimately accepted. Fast forward to 2018. Doug Ford (brother of the late, scandal plagued, Toronto mayor Rob Ford) mounted a successful campaign to seize the levers of power in Ontario. Prominent amongst his campaign slogans was “Buck A Beer,” a promise to drop the minimum price of beer down to C$1.
After taking office, Ford first gutted environmental protections and the provinces much ballyhooed “basic income” program. Then, on August 7, he made good on his promise to drop minimum pricing on beer. “Ontario, the day you’ve been waiting for is finally here,” Ford declared at a presser staged at the Barley Days Brewery. “We’re bringing back buck-a-beer to Ontario.”
The minimum price drop will not kick in until August 27, but Ford already unveiled a campaign aimed at encouraging breweries to lower their rates to one dollar a beer.
In Canada, alcohol sales are tightly regulated. In Ontario, the majority of brews are sold in The Beer Store, a government sanctioned monopoly licensed to mega-brewer A-B InBev. The remainder is sold in government owned LCBO stores or one of about 150 licensed supermarkets. Control over the means of distribution allowed Ford to incentivize a price drop. Breweries that sign up to drop their prices down to a dollar will be rewarded at LCBO stores with promotional & advertising support, temporary sales, and special floor displays & product placement.
Although, minimum pricing was intended as a means to encourage responsible drinking, the program had an unintended benefit. Because mass manufacturers could not leverage their size to sell beers at competition quashing, bargain basement prices, the market remained open to newcomers. Consequently, the burgeoning craft scene was able to compete with the big kids—not only compete, but to thrive. Today, Ontario boasts a thriving microbrewing community.
Many of these craft beer producers are vocal in their opposition to the decrease in minimum price and the accompanying government pressures to utilize the “voluntary” price drop. The breweries argue that they can not cover expenses if their product is sold any cheaper. Most are simply keeping their prices static.
“Nickel Brook will not take part in the proposed “buck a beer” plan. We’ve always been about quality & don’t aim to change that now, or ever. We have no intention of joining a race to the bottom,” stated one brewery on Twitter. “We stand with our fellow craft brewers in opposing this gimmick by Ford.”
Other brewers are seeking creative means to protest the plan. Dominion City Brewing Co. took the opportunity to protest the pricing along with Ford’s far-right agenda. “As an independently-owned brewery, we can tell you unequivocally that it is impossible to sell a beer for a dollar without compromising quality,” Dominion City said in a statement. “So, we’ve decided to respond to Ontario’s buck-a-beer challenge in our own way – by inviting our customers to help refugees build a new life in Ottawa.” The company then unveiled a new blonde ale, and declared that one dollar from every can’s cost will be donated to helping refugees.
For their part, responsible drinking advocates were not happy with the change either. “Lowering the price of alcohol carries implications and risks for public safety,” MADD Canada said in a statement. “Lower alcohol prices can lead to increased consumption, particularly among those with alcohol problems, and among young people, and that increased consumption can, in turn, lead to increased alcohol-related problems, including impaired driving.”
Still, after much searching, we did manage to find one brewery that admits to be onboard Ford’s plan—Barley Days, the site of the pol’s presser. “We’re making our lager the same as we always have, and we’re very confident that we can produce a high-quality beer for a great price,” GM Kyle Baldwin told CTV News Channel.
As you’d imagine, Ford was also defensive of the plan, noting that any price drop is voluntary. “Nobody is being forced to lower their prices and there will be no subsidies or tax handouts,” the Premier retorted.
The Other Problem
There is another complicating detail. Ford represents a new party in power, but a previous administration also set some changes to beer prices in motion.
In 2015, the then-Liberal government passed a budget that mandated a three cent annual increase in the beer tax between 2015and 2018. According to the Ontario Ministry of Finance website, on November 1, that mechanism will trigger again.
Craft beers will increase from 0.3596 to 0.3896 CAD per litre, and non-draft beer will rise from 0.3975 to 0.4275 CAD per litre. Large brewers will also see three cent increase, but their base tax is higher.
Social Media warriors are waging battle around the #buckabeer (and #fuckabuckabeer) hashttags, but whether the loud ruckus will spark change is anyone’s guess. As one Toronto brewer told us, “I’m just going to have a beer and see how it turns out.”