The Bar Towel

I don't know if this has been explicitly stated, but it strikes me that the grocery store news is basically transplanting the LCBO/TBS Agency Store program into the cities and without the branding.

Same product availability (or less), same prices, same hours. All you can do is buy a six pack and a loaf of bread at the same time. Just like what the agency store experience is for anyone who's been to one out in the country.

Cass wrote:I don't know if this has been explicitly stated, but it strikes me that the grocery store news is basically transplanting the LCBO/TBS Agency Store program into the cities and without the branding.

Same product availability (or less), same prices, same hours. All you can do is buy a six pack and a loaf of bread at the same time. Just like what the agency store experience is for anyone who's been to one out in the country.

yup pretty much. my local grocery store has had beer and liquor for years already. it seems like they just took the existing system and made it very slightly larger?

The Agency Store I went to just outside if Peterborough sold 99% macro-brew. Steam Whistle was the 1%. I was pissed and will never go back.

saints_gambit wrote: Oh, come on. The bidding process will take two months

the bidding process? isn't that part of the problem? why do we need a bidding process? why 150 stores? why only grocery stores?
Treat beer like any other retail product.
Open store.
Buy product through whatever channel you like.
Sell product.
Grossly over simplified but start there and add governance where necessary, not start from a position of bureaucracy and control.
Seriously, what's the risk of blowing this m'fer up?

NRman wrote:

saints_gambit wrote: Oh, come on. The bidding process will take two months

the bidding process? isn't that part of the problem? why do we need a bidding process? why 150 stores? why only grocery stores?
Treat beer like any other retail product.
Open store.
Buy product through whatever channel you like.
Sell product.
Grossly over simplified but start there and add governance where necessary, not start from a position of bureaucracy and control.
Seriously, what's the risk of blowing this m'fer up?

Ontario is all about bureaucracy and control. Always has been. Bureaucracy doesn't turn on a dime.

The better question to ask yourself is why on earth would any government sacrifice a stable revenue stream for an unproven one that removes pricing controls on imported products and allows for an engineered economy. The people who criticize the changes on the basis that the government is doing as little as possible are just about right.

The important thing here is not the details of the change or the magnitude of the change. The important thing is that craft beer had enough momentum as a manufacturing industry within the province for there to be any change. There will be more subsequently, so I wouldn't worry too much about the details here.

saints_gambit wrote:The important thing is that craft beer had enough momentum as a manufacturing industry within the province for there to be any change.

* stops doing Chicken Little dance *

^ It's true, this current status of craft Beer made here would be considered unimaginable ten years ago which is not a whole lot of time. We'll just see how well it plays out in actual Craft Beer availability. "Local/Provincial" is good brand, even at Loblaws if you look at some other niche-y products (we may prefer our favorite local cheddar, our favorite local farms or bakers or sausage makers, etc.)

I talked to two craft brewery owners on Saturday and both of them would have preferred that they were allowed to cross sell other Ontario craft beer in their existing stores. I wish that was allowed as well, it will be interesting to see what the grocery stores do. I hope that Whole Foods is allowed to sell beer as they have a good track record in the US. I also hope the LCBO will continue to sell craft beer from around the world .

Publican wrote:I talked to two craft brewery owners on Saturday and both of them would have preferred that they were allowed to cross sell other Ontario craft beer in their existing stores. I wish that was allowed as well, it will be interesting to see what the grocery stores do. I hope that Whole Foods is allowed to sell beer as they have a good track record in the US. I also hope the LCBO will continue to sell craft beer from around the world .

I find myself wondering what is preventing grocery stores from creating their own import firms and stocking products exclusively. Leverage over the other stores and it seems like it ought to be legal. Plus, you'll have contract brewed brands.

saints_gambit wrote:I find myself wondering what is preventing grocery stores from creating their own import firms and stocking products exclusively. Leverage over the other stores and it seems like it ought to be legal. Plus, you'll have contract brewed brands.

Probably nothing except that, for the size of grocery store that will get these licenses, the beer sales will be tiny and incremental. Grocery stores don't run importing firms for any other class of food product they carry, and won't be bothered to for beer either.

I am still holding out hope a small fraction of these licenses make their way into the hands of specialty retailers that are interested in pushing the envelope in terms of selection.

Speaking of which, its not clear to me -are the grocery stores even allowed to carry products not available in the TBS/LCBO under these new rules?

A wrote:Speaking of which, its not clear to me -are the grocery stores even allowed to carry products not available in the TBS/LCBO under these new rules?

It strikes me that the LCBO/TBS will maintain overall importing/distribution rights for beer in Ontario.

However, much like Volo organizes private orders for exclusive sale of specialty beer at their pub, I'm hopeful that enlightened grocery stores will and will be permitted to do the same. That would make things very interesting, as presently private orders (excluding individual customer orders) sit in the exclusive domain of bars, as its just not something that the LCBO or TBS does.

If grocery stores can do what bars can do in this regard then there's a potential huge upside for selection. If the government locks grocery to existing LCBO/TBS regular stock, then it's major bust.

A wrote:

saints_gambit wrote:I find myself wondering what is preventing grocery stores from creating their own import firms and stocking products exclusively. Leverage over the other stores and it seems like it ought to be legal. Plus, you'll have contract brewed brands.

Probably nothing except that, for the size of grocery store that will get these licenses, the beer sales will be tiny and incremental. Grocery stores don't run importing firms for any other class of food product they carry, and won't be bothered to for beer either.

I am still holding out hope a small fraction of these licenses make their way into the hands of specialty retailers that are interested in pushing the envelope in terms of selection.

Speaking of which, its not clear to me -are the grocery stores even allowed to carry products not available in the TBS/LCBO under these new rules?

I'm not up on the businesses of running a grocery store, but isn't that what they do with the PC or NoName or whatever store brands they sell?

Craig wrote:I'm not up on the businesses of running a grocery store, but isn't that what they do with the PC or NoName or whatever store brands they sell?

Yes, perhaps, but in the case of the "house brand" that is usually for a price advantage or an exclusivity advantage - neither of which seems to apply to directly importing unique beers.

Seems like more or less the same idea to me. The price advantage is basically the same, the grocery store cuts out the middle man by importing stuff themselves. The exclusivity advantage is pretty much locked in too, no?

The thing that would stop them is going to either be some stupid LCBO rule about importer licenses, or the volume restrictions put on grocery stores makes it not worth their time. I mean if this is limited to 450 grocery stores (in like 10 years or whatever) and no one chain can have more than 25% iirc, that's a maximum $112 million in beer sales across the chain. Even if you assume a fairly high 10% of chain sales going to whatever they import themselves and 10% profit bump because the importer doesn't get a cut, you're down to just over a million bucks to a company like Loblaws to set up the program. Doesn't seem worth their time. But, I still don't know anything about running grocery stores, so maybe I'm way off.

Craig wrote:Seems like more or less the same idea to me. The price advantage is basically the same, the grocery store cuts out the middle man by importing stuff themselves. The exclusivity advantage is pretty much locked in too, no?

The thing that would stop them is going to either be some stupid LCBO rule about importer licenses, or the volume restrictions put on grocery stores makes it not worth their time. I mean if this is limited to 450 grocery stores (in like 10 years or whatever) and no one chain can have more than 25% iirc, that's a maximum $112 million in beer sales across the chain. Even if you assume a fairly high 10% of chain sales going to whatever they import themselves and 10% profit bump because the importer doesn't get a cut, you're down to just over a million bucks to a company like Loblaws to set up the program. Doesn't seem worth their time. But, I still don't know anything about running grocery stores, so maybe I'm way off.

I feel like if the province sees that there's more money to be made, they'll change a law preventing them from making money. This is always about money. No politician of any stripe cares about what specific variety of beer is going to be available to you. An extra 50 million a year, they might care.

Craig wrote:Seems like more or less the same idea to me. The price advantage is basically the same, the grocery store cuts out the middle man by importing stuff themselves. The exclusivity advantage is pretty much locked in too, no?

Anything that is going to be singularly imported is not going to be cheap - its not going to be the discount market. Besides, we know the LCBO can drive pricing into the basement already based on order volume - supermarkets will not be able to compete with that either (even if they were allowed to - minimum pricing rules will certainly be in effect)

In terms of exclusivity, what I mean by that is something like the PC brand - it drives people to Loblaws because you can't get it anywhere else. No imported beer is going to drive consumers to a specific grocery store.