Beer Store/LCBO Getting Sued

http://www.thespec.com/news-story/5...er-seeks-to-sue-beer-store-and-lcbo-for-1-4b/

A Burlington bar owner has launched a proposed $1.4-billion class-action lawsuit against the LCBO and Beer Store over a secret "conspiracy" to limit competition.

David Hughes, owner of The Poacher, is taking the legal action on behalf of beer-drinking Canadians, according to his notice of action, filed in the Ontario Superior Court on Friday.

"The action arises from a conspiracy to fix, raise, maintain or stabilize prices of beer in Ontario," the notice reads.

"During the conspiracy period, the defendants participated in illegal and secretive discussions and made agreement relating to prices and distribution areas of beer in Ontario," it continues.

The allegations have not been proved in court.

The Toronto Star earlier this week broke the story about the secret deal that the provincially owned LCBO and privately owned Beer Sore entered into in 2000.

The agreement sharply restricts the LCBO's beer sales and in doing so allows the Beer Store to financially profit.

Under the scheme, the LCBO agreed it wouldn't sell 12-packs or cases of 24 to consumers, and wouldn't sell two-fours to restaurants and bars. Only the Beer Store would be allowed to sell the larger packs, which cost less per unit.

The LCBO can only sell beer brands carried in its regular stores to restaurants and bars, leaving them with few beer options not brewed by the Beer Store owners.

In the end, it means LCBO customers pay higher prices, the province gets less revenue and consumers are restricted in what they can buy.

In a written statement, Beer Store president Ted Moroz said the retailer plans to vigorously defend itself against the lawsuit.

"The Beer Store hasn't reviewed a statement of claim. But this suggested lawsuit is complete nonsense. Anyone who suggests otherwise is deliberately misleading Ontario consumers. We will fight it with full force," he said.

Moroz argued that the Beer Store does not set prices.

"Each brewer who sells in the Beer Store independently sets their own prices, which are approved by the LCBO on a weekly basis," he said.

He went on to say that every province in Canada has the legal right and jurisdiction to regulate alcohol sales, which is what Ontario has done in this case.

The LCBO is not yet prepared to comment on the legal action, said spokesperson Heather MacGregor.

"Our legal counsel has not yet had the opportunity to review it," she said.

The Beer Store is owned by AB Inbev of Belgium, U.S.-owned Molson-Coors and Japanese-owned Sleemans. The deal was struck by the former provincial government led by Mike Harris and the Liberal government has allowed it to continue.

Finance Minister Charles Sousa said he is looking into the deal and could decide to scrap it.

Restaurants Canada, which represents about 30,000 food service businesses, has asked the federal Competition Bureau to investigate.

The Toronto Star



Your thoughts? I for one hope this is the public spectacle needed to force the province on Ontario to step up to the plate and put an end to the Beer Store Monopoly.

 

Looks like some more news

http://www.cbc.ca/news/canada/toronto/competition-bureau-called-in-on-lcbo-beer-store-deal-1.2872544

A national restaurant group has asked the Competition Bureau to investigate a non-compete agreement between the Liquor Control Board of Ontario and the Beer Store, claiming the deal restricts competition and inflates the price of beer in restaurants, bars and pubs.

Restaurants Canada also called Wednesday on the Ontario government — owner of the LCBO — to immediately cancel the agreement, which was first reported by the Toronto Star.

The Star reported on Tuesday that it obtained a 10-page document — signed by the LCBO and the Beer Store in June 2000 — in which the LCBO agreed not to sell beer in packages of more than six containers. It also agreed not to sell to restaurants and bars any of the major brands not carried in its regular stores.

• LCBO, Beer Store deal limits competition in beer sales
• Is the Beer Store-LCBO agreement anti-competition?
• Keep OPG, Hydro One and LCBO public, panel tells province

James Rilett of Restaurants Canada said the group has known of the existence of an agreement for years, but it "did not know the depth of the complicity." He said a neutral party now needs to look into what he called a "sweetheart deal."

'The agreement can be terminated at any point.'- Restaurants Canada
The Competition Bureau confirmed Wednesday that it had received a complaint from the group and that it will review it.

Restaurants Canada, which represents 30,000 food-service businesses, said that in the past, the bureau had not been willing to wade into the issue, but the group believes the deal must be investigated now that it has been made public.

"The agreement can be terminated at any point, simply by giving six months' notice. If the government were to cancel it today, Ontario consumers would be able to have better service and cheaper prices by the summer," the group said.

The brewers' association hit back, saying the allegations were false and inaccurate.

"Restaurants Canada's claims that the Beer Store sets beer prices and that the LCBO/Beer Store framework agreement controls beer prices are both categorically false and misleading," said Jeff Newton, president of Canada's National Brewers.

He added that the Competition Bureau has had the agreement for a long time but never advised the Beer Store or its shareholders that it views the agreement as anti-competitive or that it is in any way contrary to the Competition Act.

• LCBO kiosks coming to Ontario grocery stores
• VIDEO | Look inside the LCBO's liquor lab

"In short, the framework agreement is not relevant for matters pursuant to the Competition Act, a federal statute," he said.

"It is well-known that matters with respect to the beverage alcohol industry are the exclusive jurisdiction of the provinces and not the federal government or the federal commissioner of competition."

Newton called it an agreement designed to ensure the orderly and efficient expansion of the Ontario alcohol distribution industry.

 

An excellent piece on how the Beer Store lobby's to keep it's hold.

http://www.thespec.com/news-story/5...wins-friends-and-influences-politicians-cohn/

 

See..what's odd is I would be perfectly fine with The Beer Store being turned into a crown corp, because then at least the Ontario government is making the money and not the big three. It's completely wrong that a brewer has to pay his direct competition to list their beer.

 

To be fair, there are a lot of newer LCBO's now that have walk in beer fridges, and almost all of them seem to have space designed to start carry 24s on skids when you look to the right. Here in Hamilton, Barton St, Upper James have these fridges, and it's no stretch to see other big stores make a retro-fit.