John Sleeman’s case for keeping beer in the Beer Store

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The beer industry accounts for one in 100 Canadian jobs, or almost one per cent of gross domestic product, says a new report from the Conference Board of Canada that tracks the economic spinoffs of the brewing industry from the barley field to beer fridge.

"When you purchase a bottle of beer, you are supporting not only the Canadian brewing industry, but also many other industries along the value chain – the indirect benefit to the economy of beer," said the report, which says every $1 spent on beer generates $1.12 in the economy.

The study was written by the Conference Board of Canada and commissioned by Beer Canada, formerly known as Brewers Association of Canada, which represents Molson, Labatt and 24 smaller brewers.

The Globe and Mail asked John Sleeman, founder and chairman of Sleeman Breweries and chairman of Beer Canada, about the study.

Why was the report commissioned?

We realized that the world in general, or the Canadian population in general, and perhaps people in the bureaucratic and political system, are not aware of the economic impact of the brewing industry, and indeed our own members, the people who own and run breweries in Canada, are sometimes not aware of how important we are to the Canadian economy. And so in a competitive industry we wanted to have a sense of where we fit with the wine and spirits guy and the soft drink guy. And very often people on the political side of things are not aware of how many people we employ and how many taxes we pay, so when we go to see them it's not a bad thing to have some information.

You mentioned how this may be used politically as a lobbying tool. What about consumers? What do you want them to see in this?

One of the things we want them to see is we actually employ an awful lot of them. One in a hundred of the people that will read this report are somehow getting part of their pay from manufacturing or the selling of beer.

That number seems high doesn't it?

I thought it was a bit high, too, until they explained how they got the number. For instance if we put it on a Sleeman level, we'll have sales reps in Saskatchewan and Manitoba and distribution drivers so they will go out and spend their salary putting groceries in the fridge and that kind of stuff. The sales reps and the bars that sell our beers in those places derive some of their income from the fact that they are selling our beer. So once you think about far the tentacles, if you like, of the beer industry stretch, then it's a little easier to understand how you come up with that number of jobs.

You talk about the economic benefits of brewing. Wouldn't making it more widely available at retail stores compound these economic benefits?

Well, you know I guess you could look at the number of people who are presently employed in corner stores and would that number go up dramatically. ... Obviously improved distribution is good for our industry but on the other side of things there are public policy issues that you have to deal with – the availability of alcohol and what people really want. So if you look at the Ontario model, for instance, there are I think about 1,000 locations to buy wine and beer and some of the public opinion polls indicate people are concerned about how the availability of beer might impact their daily lives with underage drinking or crime or lower availability of products or higher prices because you have to truck it to get it there. One of the good things about the system in Ontario is the Beer Stores and the LCBO, they have enough space to give everyone some shelf space. But little corner stores, you'd probably end up getting the largest brands and the little guys wouldn't get the distribution.

You don't think the corner stores would simply sell what people wanted to simply meet demand like they do with all their other goods?

I'm sure you would end up with the lowest common denominator where the top six brands would be available but that doesn't seem to be fair to the small craft brewers. There seems to be an awful lot of interest out there from consumers in what little brewers are doing and they won't get their beer on the shelves. For our industry to grow we need to continue to show consumers unique new products ... and at the moment the system means that they get the same shelf space as Molson, Labatt, Sleeman and Moosehead get.

Speaking of Ontario, there was a study earlier this year that found Ontarians pay about $9 more for a case because of the Beer Store monopoly. Wouldn't making it more widely available benefit consumers?

We certainly had a look at it ourselves and I think one of the reasons that you can buy beer more cheaply in the province of Quebec, for instance, is that the Quebec provincial government has lower taxes than the Ontario provincial government.

I keep stumbling over why all these economic benefits wouldn't grow if beer were made more widely available. Wouldn't you sell more of it if you could buy beer till 11 at night at the corner store?

I'm not sure that increased availability would equal increased consumption.

But hasn't that always been the argument? That increased availability would increase consumption?

It may well be the argument being put forward by the corner beer store lobby group. I'm certainly not aware that any particular group of Canadians is running out of beer because it's not available. You know, per capita consumption between Ontario and Quebec, where in Quebec it's available in depanneurs, consumption is pretty close ... and yet the number of stores in Quebec is vastly larger than the number of stores available in Ontario.

What is the argument for limited availability?

Well I suppose it's a public policy argument for the health and safety of consumers. I don't know, that's not my area of expertise. I know that the [Ontario] provincial government prefers to have the status quo so that they can keep an eye on underage consumers and they can have a reliable tax base without the cost of policing it at every corner store.

What about Beer Canada? What's its argument for limited availability?

Beer Canada doesn't have a position because we're a national organization so we represent breweries that come from Quebec, where there are corner stores, and Alberta and B.C., where you can buy it in private enterprise, but we also have breweries that we represent in markets where the government controls the liquor store.

Maybe that's a question for you as chair of Sleeman, which is tied to Sapporo, which owns the Beer Store.

Sleeman is very happy with the situation in Ontario. We know how to work with that system and yet we equally work with corner beer stores in other provinces so we can adapt to whatever government policy is in other markets.

This interview has been edited and condensed