Michael Hassell is a Toronto-based lawyer and business arbitrator, and owner of Barge, a company that sought to sell craft beer in Ontario.
Wednesday should have been a day for celebration – to toast change, competition and opportunity. That's because the Ontario government overhauled the province's outdated liquor laws, specifically Section 3(1)(e) of the Liquor Control Act. My company, Barge – a startup that sought to sell many craft brews under one roof – was challenging this act.
A new section to the Liquor Control Act makes it legal to sell beer, wine, cider and even spirits at stores other than the Beer Store, the Wine Rack, the Wine Shop and Liquor Control Board of Ontario outlets. This is long overdue – a radical and welcome change to Ontario's liquor laws and yes, a huge win for Barge.
So – cheers? Not quite. There's a catch: LCBO approval is required before a store can sell beer, wine, cider or spirits. And the LCBO takes its marching orders from the province.
While the changes to the law are a tremendous step forward, the implementation is lacking. To be specific, Ontario craft brewers are not able to open their own chain of retail stores. Ontario VQA wineries are not able to sell wine from their own chain of retail stores. Ontario craft cideries and Ontario craft distillers have been left out of the discussion.
Why can the owners of the Beer Store, the Wine Rack and the Wine Shop open chains to sell beer and wine across Ontario, but other breweries and wineries cannot?
Token minority ownership for craft brewers in the Beer Store is very different than majority ownership of one's own store.
Not only do Ontario brewers, Ontario wineries, Ontario cideries and Ontario distillers get shortchanged, but small businesses in Ontario in general suffer. Barge intended to launch 100 locally owned craft beer boutiques across the province, bringing great beer and creating jobs, but still – even with Wednesday's celebratory news – it cannot.
Full competition, which would result in the lowest beer prices possible, is still a long way away because of the protections granted by the Ontario government to a select few such as the Beer Store. This unfairness is arbitrary and contrary to the common-law doctrine of unreasonable restraint of trade and equitable principles of fairness.
Litigation, I suspect, is likely to flow from unequal treatment and picking of winners and losers.
Wednesday's announcement is lauded as a victory. Finally, Ontario will be more like Quebec, some say. But that's not quite accurate: Ontario's convenience stores and small grocers cannot sell beer and wine.
Ontarians still have much to envy about their easterly neighbours. Beer is widely available at grocers of all sizes and dépanneurs. The beer is much cheaper in Quebec. The selection is better. It is more convenient to buy beer, with so many retail options. Quebec has a much more mature attitude toward alcohol than Ontario.
I love Ontario, and I love great beer. But I'm most passionate about strong, fair, thriving business – so Wednesday's announcement falls a little flat.
I'm still looking forward to full, fair competition in the alcohol industry down the road, as that is in the best interests of all Ontarians.