Pricing Policy on Contract Produced Brews

We'd really love to be able to offer you a big savings if you buy a case (or more) but provincial regulations at this time prohibit this.  In fact, as unbelievable as it may sound, current rules actually require us to purchase any beer made by a “contract” producer directly from the LCBO at full retail. So if a can is $3.25 at the LCBO that means we buy it for $3.25 and then have to ship it to you. Weird, right?

We think this is not only weird but very wrong and we're trying to get things changed and need your help.  

Here's the situation: The Ontario government hasn't had (and still doesn't have) specific or sensible rules to govern the online space for beverage alcohol.  When the Ford government loosened the rules due to COVID back in April, it set up specific rules for bars and restaurants to sell takeaway or delivered alcohol products.  This was terrific!  

 

This inspired us to create Brewer Eats, which we did in direct collaboration with bars/restaurants and about 25 other beverage alcohol partners.  Importantly, this Brewer Eats  online/home delivery platform did not charge anything for bars and restaurants anything - they paid us NO FEES.  Since bars and restaurants are our CUSTOMERS too, we wanted to do what we could to help them sell more takeaway/delivered food as well as offer a nice range of about 70 different alcohol products for their customers.  It was a win for them, a win for Ontarians and a win for the brands selling on the Brewer Eats platform.  We were also able to offer "HOT DEALS" to Ontarians and the beverage companies were happy to get the additional exposure.  How did we do this? By working with brewers directly and not sending our employees into LCBO stores to wait in line during the pandemic to purchase product at retail! By working with brewers directly it saved a lot of time and money and we passed those savings along to you!

But a couple of the big breweries and foreign producers complained to the AGCO that some alcohol producers who did not already have a retail store connected to a brewery shouldn't be allowed to participate in e-commerce.  We guess they were worried about their market share and wanted to shut the "little craft companies" down.  In September of 2020 the AGCO decided to interpret the rules which eliminated any possible means of having the smallest producers (typically contract producers without a brewery yet) from participating in online sales - a move we believe is very misguided and certainly does NOT create a level playing field.

 

Plus, this policy robs you - the Ontario consumer - of the choice and flexibility of buying alcohol online from about 100 Ontario craft producers, whose only fault is not yet being big enough to afford their own physical brewing facilities and adjacent retail stores.   What makes it even hypocritical is that many of these larger breweries who are opposed to creating a level playing field started as contract producers themselves – and contract produce their own beer with other brewers! They also contract produce for other brewers too. This is a big secret within the industry but they will never admit to it. Some of your favourite craft brews are not necessarily made where the are claimed to be made. We know this because we all work in the industry.

As a result, Brewer Eats had to discontinue selling many of its most popular products that were produced on contract in collaborating with existing Ontario craft physical breweries, unless we buy them from the LCBO at full retail pricing.

Confused?  The result is that we had to pull brands like Old Tomorrow, Eden Grove, Paniza, Royal Canadian Mead, Social Lite, Pombucha, Double Trouble and many more - unless we were willing to operate as an "agent" and buy them at retail first and then re-sell them to you for the same price.

This obviously makes it impossible  to do business – which was their goal in the first place. This anti-competitive action threatens to significantly curtail sales for upstart contract producer. Again, many of Ontario’s most beloved breweries STARTED as contract producers! Worse, they changed the rules mid-Pandemic in order to hurt other small businesses to win market share.

How can you help us and those affected?

You can help us and the 100+ other companies affected by this ludicrous policy contacting the government officials below and letting them know that this red tape hurts all small businesses aspiring to build their own brewing locations and creates an unlevel playing field for contract beer producers. Tell them all businesses with Manufacturing Licenses should be allow to sell online, unencumbered. When we called them for help they said they would help (but then didn't). They talk about helping small businesses and encouraging them to go online (but then don't).  We all just want the same rules for everyone when it comes to online sales:

Premier Doug Ford at: premier@ontario.ca

Hon. Peter Bethlenfalvy: Minister.fin@ontario.ca

Hon. Doug Downie: attorneygeneral@ontario.ca

If you got to the end, thanks for reading this and your support. Please make your voices heard. They are counting on all of us to say quiet. We're always happy to chat at orders@brewereats.ca.