New Beer Store Deal

[Kel Varnsen]

http://www.newswire.ca/en/story/1469257 ... e-unveiled

Looks like they are reducing or eliminating a bunch of listing fees (small brewers can get into up to 5 local stores for free.

They will also be selling shares of the beer store for $100 or $1000, depending on brewery size. Not sure how many total shares there are though which means not sure how much power 1 share will have.

[instantkamera]

When I hear ownership, I immediately wonder about the numbers and the power of control.

not sure how much power 1 share will have.

guessing in the ~0% range.

[cfrancis]

It's good that this somewhat helps small breweries but it really doesn't do much. People that would go to the 5 closest Beer Stores are probably already making a small trek to the brewery to get their beer.

This screams of a "Hey look over there, something shiny!" to take the view off of the bad PR that is going on with the agreement with the LCBO.

[nickw]

People that would go to the 5 closest Beer Stores are probably already making a small trek to the brewery to get their beer.

Not that they're looking to get into the Beer Store, but Bellwoods Brewery, under these new rules, would be able to sell their beer at TBS as far away as Dufferin Mall! Wooo!

[Craig]

People that would go to the 5 closest Beer Stores are probably already making a small trek to the brewery to get their beer.

Not that they're looking to get into the Beer Store, but Bellwoods Brewery, under these new rules, would be able to sell their beer at TBS as far away as Dufferin Mall! Wooo!

I wonder if they could talk TBS into opening a location in their new production facility? Then they could have that second retail location they've been wanting.

[groulxsome]

People that would go to the 5 closest Beer Stores are probably already making a small trek to the brewery to get their beer.

Not that they're looking to get into the Beer Store, but Bellwoods Brewery, under these new rules, would be able to sell their beer at TBS as far away as Dufferin Mall! Wooo!

I wonder if they could talk TBS into opening a location in their new production facility? Then they could have that second retail location they've been wanting.

Why not just sell in the Dufferin Mall location!? Whenever I think of some of the most sought after beer in Ontario, I always think, "boy, I'd love to buy that at the Dufferin Mall!"

[Craig]

When I hear ownership, I immediately wonder about the numbers and the power of control.

not sure how much power 1 share will have.

guessing in the ~0% range.

It's overwhelmingly likely that the Class E and Class F shares will be non-voting shares. Here's the breakdown of the new board of directors:

Owner

# of Nominees

Molson

5

Labatt

5

Sleeman

2

Other owner brewers with over 5 million litres/year in Beer Store sales

2

Other owner brewers with less than 5 million litres/year in Beer Store sale

1

[Cass]

Yeah, 80% of the board will be the existing owners. Don't expect anything to actually change for the better - Molson/Labbatt will vote anything down that doesn't benefit them.

[cfrancis]

There is no doubt that some breweries are looking at this as a win. Rural breweries around here will get some much needed attention and distribution provided they can get the ability to actually get the beer in those stores. But somebody like Broadhead or Beyond the Pale here in town. There is not a whole lot of advantage other than some of their customers won't have to make a drive that they normally would do anyway.

Just seems like a smoke screen more than anything. Realistically voting doesn't really change, they get a few seats on the board but can't do anything.

[Wheatsheaf]

Can't wait to see who decides to buy some shares. (Actually, I can think of a few who'll probably jump at the chance.)

Can I suggest a new beer for any brewery looking to celebrate their new BS ownership? How about a specially brewed doppelbock? Collaborator has a nice ring to it.

[Cass]

Here's some responses that have come in:

OCB
http://www.ontariocraftbrewers.com/pres ... cement.php

Muskoka (via Crystal L.)
http://crystalluxmore.com/blog/2015/1/7 ... re-prosoal

Flying Monkeys

[Craig]

I'd love to be a fly on the wall of that conference call.

[lister]

I'd love to be a fly on the wall of that conference call.

Anyone have the details and can record it?

[atomeyes]

Here's a serious question:

you're a microbrewery. you own shares in the Beer Store, which the big breweries claim is unprofitable.
if the big breweries know something we don't know (very likely), such as the Liberals introducing a tax/fee on TBS operations, what happens when TBS starts showing a loss?
what if the Big 3 end up bankrupting or driving up debt on TBS for strategic/business purposes? all shareholders would be responsible for bailing it out, would they not?

[Cass]

the big breweries claim is unprofitable.

I don't think they do. Obviously TBS makes money, which is why they hold on to it so dearly. "Profits" get rebated back as a reduction of fees so it looks like TBS doesn't make money. It's outlined in their annual report. The "no profit" message is just convenient PR.