The Bar Towel

This is messed up:
http://www.cbc.ca/news/canada/ottawa/st ... ewers.html

What stupidity...

? Messed up how?

JerCraigs wrote:? Messed up how?

"Extending the microbrewery strategy will help support the success of this thriving industry," he said in the same release.

The LCBO says it has seen more than 700 per cent growth in microbrewery sales in the past decade.

Why the hell would the public chip in money to "help support the success of this thriving industry"? Of any thriving industry? If there's any industry less deserving of public money, I can't think of it.

$1.2 million to support hipster passion and the drinking habbits of well-to-do Ontarians? And the training and tourism justification is silly. Any number of businesses cater to tourists and surely we're not in desperate need of more brewers.

I love me my beer, but the industry seems to be doing just fine and pumping money into it is probably going to do more harm than good.

As I understand it, the government is giving OCB money to buy ads and spend on end displays, etc at the LCBO to sell more craft beer.

So basically the government is giving away money to a group which it will recoup some 60%-70% of in next years LCBO dividend

Bytowner wrote: Why the hell would the public chip in money to "help support the success of this thriving industry"? Of any thriving industry? If there's any industry less deserving of public money, I can't think of it.

I love me my beer, but the industry seems to be doing just fine and pumping money into it is probably going to do more harm than good.

So in your mind it's better to put public money into FAILING businesses? The traditional argument for funding industry from the public purse traditionally falls into a couple of categories:
- It helps put domestic industries on a level playing field with international competitors
- It creates or protects jobs
- It generates revenue and economic activity that is recouped in the form of taxes.

Why did the government bail out the auto industry in Ontario? Because there are a bajillion jobs dependent on it. The OCB would likely argue (and I believe they have but I don't want to put words in their mouth) that Ontario micro breweries generate a high rate of employment vs comparable sized businesses. (e.g. better bang for buck than some other industries) Often in small towns that lack other larger industries.

Arguably a more equitable solution might be to reduce the taxes a brewery pays on the first XXXX hectolitres produced. (Which I think actually happened a few years ago.) This would benefit all brewers and not just OCB members.

icemachine's point is a good one - the more money the breweries make, the more the government gets back in taxes and through the LCBO.

I think your second point about whether or not the outcome is desirable or not is the more interesting one. There have been other threads on BT about whether or not there are too many breweries in Ontario so I won't rehash that here. Ultimately the market will decide which brewers survive, and in the meantime I think measures like this probably help the smaller breweries get to that point.

Ontario is an increasingly mature beer market as evidenced by the increases in both beer quality and mainstream availability of "craft" beer.

JerCraigs wrote:Ultimately the market will decide which brewers survive, and in the meantime I think measures like this probably help the smaller breweries get to that point.

But that's just it, how does the market decide when the breweries are hanging off the teat?

The more likely scenario is that 5 years from now nano-distilleries and mixed drinks are all the rage and micro-breweries are calling their incumbent politician saying "things are looking pretty bleak for the industry... some nice jobs we've got here in Bracebridge, shame if anything were to happen to them."

Worse yet, the bloated brewing industry turns on the consumer and decides the LCBO is the bestest because there's not enough room in the market for all those awful foreign beers.

My god you are a pessimist. Has that been the scenario in Oregon? Colorado? (Passing fad, precipitous decline in sales?)

midlife crisis wrote:My god you are a pessimist. Has that been the scenario in Oregon? Colorado? (Passing fad, precipitous decline in sales?)

That sort of misses the point. Both of those places were on the leading edge of the craze.

Look, all I'm saying is that pumping public money into an already white hot industry is just asking for trouble. There's no reason to suspect this investment is needed and there's definitely reason to believe it could be better spent elsewhere. But go ahead, convince me this is a wise way to combat an over $10 billion deficit.

Perhaps you don't appreciate what a tiny fraction 1.2 million dollars is of a $10 billion deficit, let alone Ontario's entire annual budget. It is probably statistically irrelevant. The money, on the other hand, is very much appreciated i expect, especially by the smaller craft breweries, which can be two or sometimes even one man operations. Taxpayers subsidize hundreds, if not thousands, of less deserving industries and causes, in my opinion anyway.

Million here, million there. Sooner or later...

Look, we all want great beer and we want great brewers to succeed. Right?

Then, let them go at it. For years I have bitched here along with many of you about skewed markets, the TBS monopoly being a great example.

This kind of subsidy only skews markets. Ultimately what beer lovers, consumers AND employees will benefit from are the healthy survivors of competition. Better beer, stronger companies brewing it. If you want to enable this competition, remove the skewed barriers. Eliminate or remove the TBS, allow open channels to market, etc.

I'm all for sensible regulation that protects abuses, but regulatory favouritism or bailouts are not solutions, just political expediency.

Tapsucker wrote:... For years I have bitched here along with many of you about skewed markets, the TBS monopoly being a great example....

The Multinationally Owned Beer Store. The big-corporate bullshit's so deep, we might want to help the little guys to swim... at least donate some cheap water wings, 1.2 mil can't go very far.

JerCraigs wrote:

Bytowner wrote: Why did the government bail out the auto industry in Ontario? Because there are a bajillion jobs dependent on it. The OCB would likely argue (and I believe they have but I don't want to put words in their mouth) that Ontario micro breweries generate a high rate of employment vs comparable sized businesses. (e.g. better bang for buck than some other industries) Often in small towns that lack other larger industries.

Arguably a more equitable solution might be to reduce the taxes a brewery pays on the first XXXX hectolitres produced. (Which I think actually happened a few years ago.) This would benefit all brewers and not just OCB members.
i

What I find funny is that this fund seems to be of benefit to OCB members, at least that is what it sounds like from the articles I have read. Yet the OCB doesn't even represent the majority of brewers in Ontario. If you count breweries and brewpubs, I think there membership makes up somewhere in the neighborhood of 30-35% of all breweries.

Kel Varnsen wrote:

JerCraigs wrote:

Bytowner wrote: Why did the government bail out the auto industry in Ontario? Because there are a bajillion jobs dependent on it. The OCB would likely argue (and I believe they have but I don't want to put words in their mouth) that Ontario micro breweries generate a high rate of employment vs comparable sized businesses. (e.g. better bang for buck than some other industries) Often in small towns that lack other larger industries.

Arguably a more equitable solution might be to reduce the taxes a brewery pays on the first XXXX hectolitres produced. (Which I think actually happened a few years ago.) This would benefit all brewers and not just OCB members.
i

What I find funny is that this fund seems to be of benefit to OCB members, at least that is what it sounds like from the articles I have read. Yet the OCB doesn't even represent the majority of brewers in Ontario. If you count breweries and brewpubs, I think there membership makes up somewhere in the neighborhood of 30-35% of all breweries.

But the OCB is the group lobbying the government for the funds which is why it gets allocated specifically to them

matt7215 wrote: But the OCB is the group lobbying the government for the funds which is why it gets allocated specifically to them

I get that and it makes sense. Although I do wonder if anyone in the government is asking that question. I myself often wonder why more breweries aren't members. I mean I know you have to pay to be a member, but you would think it would be beneficial to the existing members to have everyone in the industry be a member. I mean sure it means you would get less of that government money. But at the same time I would think an industry group with 100+ members would have more lobbying power than one with around 30. Plus from the promotional aspect if their website could promote Ontario as a place with over 100 craft breweries and brewpubs that would benefit everyone as well.