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Politics Beer Store has donated $1.1-million to Ontario politicians

A government advisory panel has recommended increasing competition in beer retail, threatening The Beer Store’s monopoly.

Deborah Baic/The Globe and Mail

The Beer Store's corporate owners have funnelled more than $1.1-million to Ontario politicians in the past decade, as they successfully held on to their lucrative private monopoly.

The company – owned by foreign brewing giants Anheuser-Busch InBev SA, Molson Coors Brewing Co. and Sapporo Breweries Ltd. – enjoys a government-protected stranglehold on beer retail, codified in a secret deal with the province.

A Globe and Mail review of political donation records reveals the sheer scale of The Beer Store's efforts to engage in the political process.

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Premier Kathleen Wynne's governing Liberals have been the biggest beneficiaries, raking in more than $667,000 since 2005 from The Beer Store's owners. They received a further $73,041 in donations from the union that represents Beer Store employees, the United Food and Commercial Workers.

Ms. Wynne is set to decide within weeks on the company's future, after a government advisory panel led by former banker Ed Clark recommended making the province's beer retailing system more competitive.

The Premier's office played down the importance of Beer Store donations on those decisions, saying the money represents just "a fraction" of total donations to the Liberals.

"Any suggestion that any individual contribution or interaction may unduly influence government policy is false," Ms. Wynne's spokeswoman, Zita Astravas, wrote in an e-mail. "In fact, the government is currently exploring options that are strongly opposed by The Beer Store and companies identified."

Mr. Clark has recommended getting a share of Beer Store profits for the treasury by charging each outlet a franchising fee, allowing the government-owned LCBO to sell more beer and giving small brewers better access to the market, such as by opening new stores specializing in craft beer. Some craft brewers, restaurateurs and convenience-store owners want the government to go further than that, and abolish The Beer Store's monopoly altogether.

Canada's National Brewers, the lobby group that represents The Beer Store's owners, did not respond to a request for comment.

The Beer Store's owners have also donated significant sums to the opposition parties. In the past 10 years, they have given the Progressive Conservatives $383,000 and the NDP $93,600. The NDP pulled in a further $378,000 in donations from the union, which favours keeping the Beer Store system intact.

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Provincial rules cap the amount any one company or union can donate at $9,300 a year. But they also allow for additional donations during election campaigns, including by-elections. And they do not restrict companies from donating through subsidiaries, or unions from donating through their many locals.

The Beer Store's owners have used several avenues to donate. Some donations were made through Canada's National Brewers. Others were made directly by the companies themselves. They donated throughout each year, and also during campaigns. In 2013, they donated to every Liberal leadership contestant, for a total of $114,500. Ms. Wynne's leadership bid received $22,500 from Beer Store owners. Finance Minister Charles Sousa, who also ran in that contest, received $20,000.

Donations were consistently strong in 2013 and 2014. The Beer Store and its owners gave the Liberals more than $80,000 last year and $159,000 in 2013. The PCs, meanwhile, pulled in $64,000 in 2014 and $44,000 the year before. The NDP took in $59,000 over the last two years from The Beer Store and the big brewers, plus nearly $85,000 from UFCW.

The PCs, who are not announcing any new policy until they elect a permanent leader in the spring, currently have no official position on The Beer Store. But some leadership candidates, such as MPPs Vic Fedeli and Monte McNaughton, have called for the government to look at allowing alcohol sales in private stores not controlled by The Beer Store.

A spokeswoman for NDP Leader Andrea Horwath said the party has not worked with the union on policy related to The Beer Store. The NDP is waiting on Mr. Clark's final report before taking a stand.

"Our goal for beer sales is to put money in the bank for the province, create good jobs across Ontario, and give Ontarians the best selection for beer, and make beer responsibly available," Marion Nader wrote in an e-mail.

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Derek Johnstone, the union's regional director for Ontario, pointed out that the 6,000 members working at The Beer Store represent only a small portion of the union's overall membership. He said most of his union's political efforts are directed at matters that would help the majority of members, such as tougher labour laws in the retail sector.

"The conversations we're having with politicians, for the most part, are not about The Beer Store," he said in an interview. "It's about labour law, it's about the grocery industry, it's about the meat-packing industry."

The Beer Store's unusual arrangement with the province dates to 1927, when it was formed as a co-operative of the province's brewers. It's original purpose was to keep tight control of beer sales to appease a temperance-minded public. Over the years, through mergers and acquisitions, it came under the control of the three foreign multinationals.

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