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Buck a beer could end up as buck a sip

Suds. Brewskis. Barley sandwich. Nectar of the Gods.

The concept of a Buck a Beer on these last sweltering days of summer is a siren’s call to many voters.

There’s many a slip between the cup and lip, though, and there are still many unanswered questions about how this will actually work.

The 15 revocations and substitutions to regulations of the Liquor Control Act in O. Reg. 116/10 dealing with minimum pricing and effective Aug. 27 are confusing.

The government also appears to giveth and taketh, raising the minimum prices on sake, wine and wine coolers next March to $7.75 for a 750-millilitre bottle of wine with more than seven per cent alcohol by volume from $7.05, a 10-per-cent hike, which begs the question as to why we need bother with a minimum price at all.

Then there’s a provincial excise increase Nov. 1, six months after the last increase in March. So, things aren’t really as generous as they seem. The federal excise annual spring increases are also baked in for the next decade or so.

Getting to an apples-and-apples comparison has been difficult.

The LCBO referred questions to the Ministry of Finance, which referred to its own website, where the details are as clear as a mudslide.

For the brewers, it’s not all lager and laughter either. Many craft brewers say they just can’t afford to sell a 341-ml bottle or 355-ml can of beer for a dollar.

Those global conglomerates controlling the Beer Store have also been strangely silent. They lobbied hard during the election for a reduction in taxes, which make up 47 per cent of the price of a beer and that hasn’t happened.

Two brewers, however, say they’ll give it a go. More will probably follow.

What that beer will taste like and what the container size will be is anyone’s guess at this stage.

So, how is this really going to work? Even the Ontario Craft Brewers are circumspect.

“OCB has long advocated for expanded retail channels and lower beer taxes to ensure we keep Ontario’s excellent independent craft beer affordable and accessible for consumers,” it said in an email to Law Times.

“We are pleased that this government is clearly focused on innovative changes to the current retail model, and expanding consumer choice.”

Read between the lines and what the OCB really wants is to open the conversation about satellite retail stores, away from their brewing operations; a chance to collaborate with other microbrewers to create a boutique co-op store, sharing the costs and cross-promoting products, released from the fight with the Beer Store and the LCBO for precious shelf space.

Instead, what we’re getting is cheaper beer without lowering the associated taxes. Currently, the minimum price is about $1.48 per 341-ml bottle, which comprises 10 cents deposit, 11 cents federal excise tax and, as of Nov. 1, 2018, 12 to 25 cents Ontario excise tax and 13 per cent HST on top of those taxes.

Take out those factors and the raw minimum is about 83 cents to $1 a bottle, which includes not just the brewing but packaging, marketing and retail markup.

The taxes are also dependent on whether it’s a conglomerate brew, micro brew, draft or non-draft beer.

It is those taxes that keep beer prices rising: Canadians pay five times more taxes than Americans on beer, according to a beer lobby group.

The minimum price is a nanny-state mechanism to protect us from ourselves and protect those global conglomerates from being undercut by an upstart brewer.

Reducing it is a three-card Monte game that serves up the illusion of cheaper beer while still keeping the peanut of taxes firmly in place.

Under the Buck-a-Beer pricing, a 341-ml bottle before all taxes at 5.5 per cent or less is about 48 cents, so there is some headway for brewers with sharp accountants and strong cost controls. But that hand in your pocket is still dipping into your wallet.

It could all end up being a Buck a Sip and not Buck a Beer.

Ian Harvey has been a journalist for more than 41 years, writing about a diverse range of issues including legal and political affairs. His email address is ianharvey@rogers.com.


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