December 21, 2013
Yesterday, Canada’s Competition Bureau confirmed yet another new advocacy initiative, confirming that it has decided to study the Ontario beer retailing market for potential reforms to increase competition.
Earlier this fall, on September 10th, the Bureau announced a public consultation for suggestions where it should intervene in regulated markets (i.e., where the Bureau does not have direct enforcement powers given the existence of legislation or regulations sanctioning conduct that would otherwise violate the Competition Act).
The Bureau’s confirmation of its review of Ontario beer retailing is the newest of its recent regulatory interventions, which have also included efforts to emphasize and increase competition in the Canadian wireless, Internet domain name and retail pharmacy markets (see: here). The Bureau has also recently launched a new Advocacy Portal, where it will be posting its letters and other written submissions in connection with its new advocacy efforts.
Yesterday’s announcement confirms the Bureau’s interest in retail sectors with significant consumer impact, like wireless, airlines, gasoline and real estate. Beer retailing in Ontario has also been the subject of debate and criticism over the past several years, with some criticizing the joint control by large foreign brewers (Anheuser-Busch InBev, Molson and Sleeman/Sapporo) on beer retail through Ontario’s Beer Stores. While liquor retailing in Canada varies in the different Canadian provinces, Ontario has to date adopted a model that restricts beer sales to the Beer Stores and government LCBO, with no convenience store retailing (unlike Quebec).
According to media reports (see e.g., here and here – no new information has been posted on its Advocacy Portal page), the Bureau is studying differences in beer retailing in Quebec and Ontario, the current model of the prevalent Beer Stores and criticisms by Ontario’s retail industry and others that have referred to the Beer Stores as a cartel.
With respect to retail industry lobbying for liberated beer sales, the Ontario Convenience Stores Association published a study with comparative data for beer prices in Quebec and Ontario (see: The Case for Expanded Alcohol Retailing in Ontario).
Some of the key findings of that report indicated that about three-quarters of Ontario residents wanted to see more competition and retailing of beer in Ontario, about 73% of Ontarians wanted the government’s LCBO’s network expanded and that about 62% of Ontarians had a negative or very negative view when informed that the Beer Store was jointly owned by three foreign brewers.
Given that the Bureau’s new advocacy initiative has only been underway for about three months, it will be interesting to see what other Canadian sectors catch the Bureau’s intervention eye.
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