Money and Marketing: Munchies and beer
TORONTO - Buck a beer went into effect in Ontario on Monday, fulfilling one of Doug Ford's promises from the spring election campaign, but his government said it would be a while before it acted on a pledge to make beer and wine available in corner stores across the province.
Ford's finance minister said the Tory government was busy focusing on other matters, but promised that the corner-store promise was still on the agenda.
“We really are looking at the lowering of hydro rates and the cutting of corporate taxes and the cutting of personal taxes,” Vic Fedeli said at a brewery where Ford marked buck a beer coming into effect. “The beer and wine in corner stores will be at a corner store near you in the future.”
Meanwhile, the buck-a-beer policy announced earlier this month lowers the minimum price of a bottle or can of beer to $1 from $1.25. Brewers are not required to charge less and the minimum price doesn't apply to draft beer, nor does it include the bottle deposit.
The move has drawn criticism from many craft brewers, who said they can't afford to lower their prices without sacrificing the quality of their product.
Ford, however, defended the policy.
“For a craft brewery to say that, it's his opinion,” the premier said. “The people who are buying buck a beer are as happy as punch.”
Ford acknowledged that not all craft brewers have the capacity to produce beer they can sell for $1, and praised the handful of companies who have so far said they are implementing the new minimum price.
Cool Beer Brewery, which Ford visited Monday, and Barley Days Brewery in Picton, Ont., have said they will offer lower-priced beer, while Loblaws has said its President's Choice brew will be available for a dollar a bottle for a limited time.
The Progressive Conservatives have said the policy would see more competition in the beer market without affecting the province's revenues from beer and wine taxes, which brought in roughly $589 million in 2016-2017.
Businesses will be offered prime spots in Liquor Control Board of Ontario stores or advertising in the store magazine's inserts, among other possible incentives for selling their beer for $1, the government has said.
Ford said the policy's intent is to give people relief from rising prices, and added that he's not concerned about it leading to higher impaired driving rates
“I think we're responsible enough,” he said. “It doesn't matter if its a $1 or $1.25, people can't be drinking and driving.”
NDP Mental Health and Addictions critic Bhutila Karpoche said the policy shows the government is more concerned with subsidizing brewers than helping families.
“Ford's photo-op on Monday does nothing to help the families hurt by his cuts to education, housing, and social assistance,” she said in a statement.
Ontario previously had buck-a-bottle beer but the then-Liberal government quietly hiked the minimum price in 2008, citing its “social responsibility” mandate.
In its heyday, buck a beer was a successful marketing campaign and seized a significant share of the market, said Scott Simmons, president of Ontario Craft Brewers, who was an executive at The Beer Store at the time.
But the costs of making beer have gone up, as have the provincial and federal taxes, making it less feasible for brewers to sell their product at the $1 minimum price now, he said shortly after Ford announced the policy.
The LCBO has said it will work on in-store displays, limited time offers and advertising with any beer supplier who agrees to meet Ford's challenge to reduce the price of beer.