Beer store monopoly collapsing

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TwistedKestrel said:
Small point of contention, but AFAIK it is closer to billions than millions
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There will be opposition, but there may also be opportunities that the province can open up for beer makers -- remember they are the shareholders in TBS and they reign, not the TBS brass or unions.

Relaxing restrictions on beer sales could substantially increase sales for brewers, something I'm sure they would be happy to trade off. I'd bet there are things the ON gov't can do to to make this change a win-win without legal combat.

Imagine something as simple as reducing beer taxes to bars and restaurants. If the revenue for the restaurant increased, so would volume of beer sales -- making up the shortfall and possibly increasing the province's share of HST.
 
nobbie48 said:
When revenues drop corporation equity drops and leverage to fund other investments drop. The trickle down theory only works when adjustment have to be made for declining profits.
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??? Can you elaborate?
 
Mad Mike said:
There will be opposition, but there may also be opportunities that the province can open up for beer makers -- remember they are the shareholders in TBS and they reign, not the TBS brass or unions.

Relaxing restrictions on beer sales could substantially increase sales for brewers, something I'm sure they would be happy to trade off. I'd bet there are things the ON gov't can do to to make this change a win-win without legal combat.

Imagine something as simple as reducing beer taxes to bars and restaurants. If the revenue for the restaurant increased, so would volume of beer sales -- making up the shortfall and possibly increasing the province's share of HST.
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It is possible that not renewing the "master framework agreement" could benefit everyone (except Brewer's Retail) but I don't see how the province could negotiate an early end to the contract without some insane concession couched in a new, different contract. The good way to do this would be to commission a small study and write up a policy/act so that all that the future government would have to do is sign on the dotted line to not renew the MFA. The terrible, destructive, shortsighted way to do this is to push through on it now largely so that the current government can take credit for it (while gambling on an unlikely positive outcome)
 
TwistedKestrel said:
It is possible that not renewing the "master framework agreement" could benefit everyone (except Brewer's Retail) but I don't see how the province could negotiate an early end to the contract without some insane concession couched in a new, different contract. The good way to do this would be to commission a small study and write up a policy/act so that all that the future government would have to do is sign on the dotted line to not renew the MFA. The terrible, destructive, shortsighted way to do this is to push through on it now largely so that the current government can take credit for it (while gambling on an unlikely positive outcome)
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Thats what i was thinking too. Use the majority to get something enshrined in policy that prevents governments from monopolistic practices that benefit private companies. Don't limit it to the beer store. That way things like Hydro One face competition if their private ownership exceeds a threshold. It avoids the penalties, gives people timentp olan amd work out the logistics and isnt trivially easy for future wanker politicians to unwind.
 
I look forward to more competition to the Beer Store. My only worry is the amount of money that will be lost to get rid of the monopoly.

How far are we into their 10 year agreement? Can we just wait it out and then let it lapse without renewal? This may be a better option for all, except Ford who wants to get this done during his first (and possibly only) term.
 
mimico_polak said:
I look forward to more competition to the Beer Store. My only worry is the amount of money that will be lost to get rid of the monopoly.

How far are we into their 10 year agreement? Can we just wait it out and then let it lapse without renewal? This may be a better option for all, except Ford who wants to get this done during his first (and possibly only) term.
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September 2015 was when agreement was enacted. I doubt this will be much faster than six years with all the legal wrangling and appeals that will happen. It may even be faster to let the clock run out than axe it and face the potential penalties.
 
P.S. A little more context - we have the current deal courtesy of Ed Clark (under Wynne of course but I'm not sure she gets much credit for it)

Beer deal clears way for grocery sales in Ontario | The Star
How Ontario put water in its wine for beer sales: Cohn | The Star

So it was a big improvement over what we had. However my short term memory is missing something, namely why we had to negotiate this in the first place, or how it benefited the province if we didn't *have* to make that deal.

Edit: The prior secret agreement was effectively end-dated December 2005, but inertia kept it going. The Beer Store’s secret sweetheart deal with LCBO revealed: Cohn | The Star
 
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The Beer Store themselves argues that their arrangement both protects low prices for consumers and tax revenue for the government. They have commissioned research for it, found here: Resources

It paints them in an extremely favourable light, shockingly.

So the answer to why we have this agreement at all is some mixture of lobbying, and that the government being sold on the premise that they themselves benefit financially from it. It would be interesting to see if there was data to use from 2017/2018 that demonstrated what the financial impact of the new arrangement is
 
TwistedKestrel said:
P.S. A little more context - we have the current deal courtesy of Ed Clark (under Wynne of course but I'm not sure she gets much credit for it)

Beer deal clears way for grocery sales in Ontario | The Star
How Ontario put water in its wine for beer sales: Cohn | The Star

So it was a big improvement over what we had. However my short term memory is missing something, namely why we had to negotiate this in the first place, or how it benefited the province if we didn't *have* to make that deal.

Edit: The prior secret agreement was effectively end-dated December 2005, but inertia kept it going. The Beer Store’s secret sweetheart deal with LCBO revealed: Cohn | The Star
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Even those deals to get wine and beer in grocery stores are dumb. Sure it is better then nothing but it is not open that any grocery store can sell beer, only the select few can. Again nanny state at work. Why is it so drawn out? They really need a pilot program to see if the private sector is capable of selling alcohol? Or do they want to see if we all go nuts drinking sooo much more wine and beer now that we can get it down an isle at one of the select few grocery stores that can sell it.
 
Mad Mike said:
I say open it wide. TBS and the UFCW has self serving agendas, they want the cozy protection of a monopoly to protect their profits their jobs.

They are a specialty retailer selling commodity goods, completely redundant to the LCBO, and large scale food distributors / retailers in Ontario.

The net result is the monopoly adds about $400 million to consumer costs in Ontario - it's basically the 'beer monopoly tax'.

Imagine if we had a soft drink distribution monopoly that ran uselessly parallel to the existing distribution network but added $400million consumer cost in Ontario.
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The cost of a mainstream 24 will not go down. That 400 million will just be shifted to the corporate rich as profit; and the 1000's of fair paying family supporting jobs the beer store provides will be lost to minimum wage jobs without the protection of a union. Don't be fooled. This is NOT any attempt to save consumers money.
 
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raginduck said:
If this is pushed through... I expect Brewers Retail will eventually disappear. They won't be able to compete in retail or commercial.
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yup...and then that is when prices will go back up. walmart did it similarily to get rid of the competition. and now the prices are rising. Now thats the correct definition of a monopoly.
 
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The job losses will be very difficult, jobs that pay well, with a pension dont grow on trees.
 
Yes. greed rules. don't fairly share profit-keep every penny greed. the masses are awakening to this. most recently the political shifts in PEI and the west coast. We teach our children to share and be fair; then we live the opposite.
 
yes, very bad story for TBS workers
and they are generally a pretty good bunch
pleasant and hard working
very few will get similar golden-parachute jobs

consumers will benefit from more outlets
and that's about it
can't see prices going down
selection will vary from store to store
opening hours will still be government set

figure this about union-busting more than anything else??
 
TwistedKestrel said:
It is possible that not renewing the "master framework agreement" could benefit everyone (except Brewer's Retail) but I don't see how the province could negotiate an early end to the contract without some insane concession couched in a new, different contract. The good way to do this would be to commission a small study and write up a policy/act so that all that the future government would have to do is sign on the dotted line to not renew the MFA. The terrible, destructive, shortsighted way to do this is to push through on it now largely so that the current government can take credit for it (while gambling on an unlikely positive outcome)
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You have to remember the brewers are the ones who own TBS. So far you haven't heard a peep from the Beercos, the only saber rattling is the TBS union and brass. If disbanding the TBS meant more sales and profits for the Beercos, they'd toss TBS and their agreement aside in a heartbeat. That's the power the ON Gov't holds, they make the alcohol rules and for the most part do the price setting. Allowing Beercos direct access to large restaurant chains, mass retailers and distributors and releasing minimum price standards makes beer less expensive to the consumer.

Reducing prices, increasing retailer and restaurant price flexibility will drive volume and profits for Beerco product. Reducing restaurant prices might also drive growth in their businesses... making more tax revenue and jobs for TBS workers.

The prices shown below are in USD for Buffalo NY.

40324H
 
Mad Mike said:
You have to remember the brewers are the ones who own TBS. So far you haven't heard a peep from the Beercos, the only saber rattling is the TBS union and brass. If disbanding the TBS meant more sales and profits for the Beercos, they'd toss TBS and their agreement aside in a heartbeat. That's the power the ON Gov't holds, they make the alcohol rules and for the most part do the price setting. Allowing Beercos direct access to large restaurant chains, mass retailers and distributors and releasing minimum price standards makes beer less expensive to the consumer.

Reducing prices, increasing retailer and restaurant price flexibility will drive volume and profits for Beerco product. Reducing restaurant prices might also drive growth in their businesses... making more tax revenue and jobs for TBS workers.

The prices shown below are in USD for Buffalo NY.

View attachment 40324H
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A few years back we were in the finger lake area and went into a convenience store for something to drink at the motel. I got a large can of beer for $0.99 and my wife got a small orange juice for $1.89.
 
Mad Mike said:
You have to remember the brewers are the ones who own TBS. So far you haven't heard a peep from the Beercos, the only saber rattling is the TBS union and brass. If disbanding the TBS meant more sales and profits for the Beercos, they'd toss TBS and their agreement aside in a heartbeat. That's the power the ON Gov't holds, they make the alcohol rules and for the most part do the price setting. Allowing Beercos direct access to large restaurant chains, mass retailers and distributors and releasing minimum price standards makes beer less expensive to the consumer.

Reducing prices, increasing retailer and restaurant price flexibility will drive volume and profits for Beerco product. Reducing restaurant prices might also drive growth in their businesses... making more tax revenue and jobs for TBS workers.

The prices shown below are in USD for Buffalo NY.

View attachment 40324H
Click to expand...
the price difference is because we pay more taxes on beer in canada than they do in the usa. this won't change.
ditto for gas and cigs.
 
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Looking forward to the day of going to Costco for my beer purchase like my FIL does in Gatineau.




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