Ontario Premier Kathleen Wynne surprised many observers when she announced today that, after months of study, she has decided that rather than ending the private monopoly known as The Beer Store, her government will instead use it as an inspiration to revitalize the provincial economy.
“I originally thought it might be a good idea to scrap The Beer Store, or at least open the monopoly up a bit,” said the Premier, speaking at an impromptu press conference in front of a shopping mall in suburban Toronto. “But the truth is that monopoly works.”
She described The Beer Store as “a success story the entire world should be emulating.”
As part of the planned redesign of the provincial economy, Ontario’s three largest supermarket chains are to be merged into a single privately owned company. It will operate under the brand name “The Grocery Store.”
The government said it will table enabling legislation next week. It is expected to receive all-party support.
According to a government briefing document on the proposed law, as of July 1, 2015, all existing grocery store operators not part of The Grocery Store will be forced to close their doors; all other retailers will be forbidden to sell food or other grocery items; convenience stores will be restricted to selling cigarettes, lottery tickets and bags of ice; and farmers’ markets will only be legal on Tuesday afternoons in months ending in the letter “y.” The law may make an exception for children’s lemonade stands, when the operator is under the age of 7.
Ms. Wynne said The Grocery Store would remain “100 per cent privately owned,” because “the private sector flourishes, and really becomes extremely profitable, when you eliminate competition.”
The Grocery Store plan is clearly inspired by The Beer Store, which is privately owned by three foreign beer companies but enjoys a government-enforced near-monopoly on the sale of beer. Other retailers, including grocery and convenience stores, are not allowed to sell beer, and even the province’s other liquor monopoly – the government-owned Liquor Control Board of Ontario – is restricted in various ways, including being forbidden from selling beer in cases of 12 and 24.
The provincial Finance Minister, Charles Sousa, promises the creation of The Grocery Store will lead to lower prices, better service and greater convenience. “It makes no sense to have all of these competing retail outlets selling food,” said Mr. Sousa, standing next to Ms. Wynne at the suburban shopping mall.
“Look, there’s a perfectly good big-box grocery store behind me,” said the Minister. “But on my drive over here, just in the last few blocks, I must have passed, like, a dozen small greengrocers, convenience stores, ethnic grocers, butchers, bakers, at least one other large grocery store, plus some kind of hipster artisanal cheese boutique.” He described a neighbourhood with so many food shopping options as “utter madness.”
“Don’t people realize that they’re being gouged by all of this competition?” asked the Minister. “Prices would be lower, and service better, if the thousands of people in this neighbourhood had no choice but to buy their food in one, and only one, centralized location.”
He said studies showed the efficiencies that would come from consolidating tens of thousands of private stores selling food and other grocery items into only “400 or 500 retail outlets, tops” would provide a “significant” boost to the economy.
Critics have long suggested that political support for The Beer Store is a product of extremely lenient political contribution laws.
At the federal level, thanks to rules brought in by former Prime Minister Jean Chrétien and greatly strengthened by Stephen Harper’s Conservatives, neither corporations nor unions are allowed to donate to political parties or candidates. In Ontario, in contrast, businesses and unions are legally allowed to open their pocketbooks and buy influence. The Beer Store, its multinational corporate parents and its unions are among the province’s biggest and most influential political donors, richly funding all three major political parties.
If Ontario were to ban political donations from corporations and unions, many believe that the Beer Store model would become considerably less appealing to lawmakers.
However, the province says that its plans to remake the provincial economy along Beer Store lines have nothing to do with political fundraising and everything to do with the best interests of taxpayers, consumers and future generations.
Once The Grocery Store is up and running, the province says it will begin moving to revamp other sectors in need of “consolidation.”
At her press conference, Ms. Wynne said the entire provincial economy would benefit from the Beer Store treatment. “Look at banking,” she said. “Why so many different banks? And why so many branches? This province needs 400 or 500 bank branches, tops.”
She also mused about creating province-wide monopolies in such fields as retail clothing, auto repair, furniture sales, takeout pizza and the news media.
But she said that her government’s first target is likely to be the restaurant industry.
“In some of our cities, there are streets where one restaurant sits next to another, and across the road from two more, and down the block from another three,” said the Premier. “We’ve got to learn from The Beer Store.
“Each neighbourhood should have one large, cafeteria-style restaurant,” said Ms. Wynne. “If someone wants to serve Italian food, or Cantonese cuisine, or Thai, why must they open their own restaurant? It’s inefficient. It’s unfair. Aspiring chefs should apply to sell their dishes at each neighbourhood’s one efficient outlet of The Restaurant. That’s the Beer Store model.”
In response to a reporter’s question about whether she was restricting the dining choices of Ontarians, Ms. Wynne said she was doing nothing of the sort.
“Not at all,” said the Premier. “This is about expanding choice. We are expanding choices by limiting them.”Report Typo/Error
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