Ontario Premier Doug Ford’s government is lowering the price floor for beer in time for Labour Day weekend, and will have incentives for brewers that reduce their prices. But some beer-makers say that offering “buck-a-beer" is unrealistic without compromising quality.
It was one of Mr. Ford’s signature campaign promises during the spring election, and on Tuesday the Ford government announced it was going ahead with a plan to lower the minimum price of a bottle or can of beer to $1 from the current $1.25.
The lower price floor, which is limited to beer with an alcohol volume of less than 5.6 per cent, will take effect on Aug. 27. Brewers are not required to charge the lower rate and few in the province sell at the current minimum. The price does not include a bottle deposit and does not apply to draft beer.
“We’re bringing back a buck-a-beer to Ontario. Once upon a time, you could buy a beer for $1 a bottle. Consumers loved it, participating breweries loved it; it was a win-win,” said Mr. Ford during the announcement at the Barley Days Brewery in Prince Edward County.
The Premier criticized the former Liberal government for increasing the price a decade ago. “They created a new rule, another piece of red tape that made a buck-a-beer illegal,” Mr. Ford said.
The Liberals had cited the government’s “social responsibility” mandate for the 25-cent increase in beer prices at the time. However, Mr. Ford said he didn’t think the lower prices would lead to more drinking and driving. “I think people in Ontario are mature enough to know when they’ve had one too many,” he said.
While the buck-a-beer program existed a decade ago, few breweries have shown interest in matching the cheaper price today. Citing increased taxes, higher costs for ingredients and labour and new U.S. tariffs on aluminum, Scott Simmons, president of Ontario Craft Brewers, said he doesn’t expect any of his organization’s members to offer beer at $1.
“With all these new costs, it’s just impossible to sell a beer at that price. I just don’t think this is something our membership would ever entertain,” Mr. Simmons said. He said he could not find any brewery in Ontario currently selling beer at the current minimum price of $30 for a 24-pack.
Brewing a $1 beer would compromise quality and taste, warned Troy Burtch, the head of marketing for Great Lakes Brewery in Etobicoke.
“Don’t expect us to get involved in this,” Mr. Burtch said. “Our drinkers are looking for something with character and flavour. I can confidently say that a buck-a-beer won’t deliver that. You’re going to get what you pay for.”
However, at least one brewery is willing to embrace buck-a-beer. Barley Days Brewery, where Mr. Ford made his announcement, is buying new equipment and preparing to triple its capacity for the launch of a $1 lager ahead of Labour Day.
“I believe that we can pull this off. We’re confident we can produce a high-quality beer at that price,” said Kyle Baldwin, the general manager of Barley Days.
The only way the brewery can make money with such thin margins will be through selling a significant volume of beer, Mr. Baldwin said. “I think a lot of other breweries are just going to sit back and see what happens with us,” he said.
Deputy Premier Christine Elliott said that Tuesday’s move was the first phase of Mr. Ford’s larger campaign plan to allow for the wider sale of alcohol in Ontario, including expanding beer and wine sales to corner stores and big-box stores.
To encourage for brewers to lower their prices, the government is creating what it calls the buck-a-beer challenge, which will provide participating breweries with incentives at the provincially owned LCBO stores. Beers lowered to $1 could receive promotional and advertising support, short-term discounts and more prominent displays in the stores.
“Give the taxpayers a break and let them have 24 cans of beer for 24 bucks. I think it’s a great deal,” said Mr. Ford in an appeal to brewers.
The move will have no effect on the province’s nearly $600-million in revenue from beer and alcohol taxes, Finance Minister Vic Fedeli said.
"There are no tax dollars that are being reduced to allow for the buck-a-beer,” Mr. Fedeli said. “The Premier is asking the beer producers to lower their price.”