Why is your government standing in the way of cheaper beer? - Macleans.ca

Why is your government standing in the way of cheaper beer?

Nearly every province mandates minimum prices for the stuff

From the editors


Canadians find beer an endlessly interesting topic. We enjoy drinking it, brewing it, watching ads for it and even following the delivery of equipment used to make it. Consider, for example, the daily press coverage of the recent transportation of six massive beer fermenters, each seven metres high and capable of holding one million bottles of beer, to the Molson Coors brewery in Toronto. The $24-million operation required shutting down several highways and lifting 1,600 service wires: it also had its own logo, website and Twitter feed. Despite all this fermented fascination, however, there’s one aspect of beer in Canada that receives far too little attention: the fact that nearly every province mandates minimum prices for the stuff. These policies stifle competition and choice and force all Canadians to pay more than they should for their favourite alcoholic beverage.

The issue of minimum beer prices made a rare appearance in the news last week with reports that the Quebec Brewers Association is lobbying the provincial government for a bigger boost in the floor price of beer. Quebec’s minimum price is reviewed annually and adjusted for inflation. The brewers, however, are arguing beer prices should be hiked by more than the national consumer price index. At current rates, they warn, beer will soon be cheaper than milk. We can only hope.

Every province except Alberta mandates minimum retail prices for beer across a wide variety of categories. (Manitoba only mandates the price for single-serving cans.) Using a case of 24 bottles of light beer as comparator, minimum prices range from $26.55 in Quebec to $38.14 in Newfoundland. (In Alberta, tax hikes in 2009, and the fact of a monopoly distributor, has meant prices aren’t always lower than other provinces’ minimums. Still, retailers are free to put beer on sale, as it was in Calgary this week, where 24 Bowen Island Special Light could be had for $24, plus GST.) Most provinces also regulate the price of beer sold in bars. In Alberta, for example, the lowest legal price for beer in a bar is $2.75, or 16 cents per ounce for draft.

Minimum beer prices, or “social reference prices” as bureaucrats like to call them, are designed to keep Canadians at a distance from our own baser instincts by making beer too expensive to binge on wantonly. Whether such prohibitionist regulations are successful in preventing public drunkenness or excessive private drinking is open to considerable debate. Unfortunately, consumers appear to have no say in this matter. Politicians, lobby groups such as Mothers Against Drunk Driving and the big beer companies are all strong supporters of minimum prices.

While the Brewers Association of Canada frequently complains about federal and provincial taxes on beer (at 51 per cent of the average retail price, our beer taxes are among the highest in the world), it has no such qualms about minimum prices. Last year the organization’s president extolled the benefits of Canada’s floor prices to the Scottish legislature.

The brewers’ association claims it supports minimum prices as a damper on excessive drinking. And yet floor prices are also quite handy in preventing bothersome competition. In 2008, following an apparent request from the brewing industry, Ontario quietly moved its minimum price from $24 a case to $25.60, thus shutting down popular “buck a beer” promotions by cheaper brands. This is how beer price wars are avoided.

It is hard to escape the suspicion that increasing revenues is the real motivation behind the brewers’ support for social reference pricing. Consider the influential National Alcohol Strategy report from 2007. This document, assembled with input from government, addiction researchers and the beer industry, has a particular fascination with U-Brew operations. The report recommends that these do-it-yourself outlets be forced to charge the same minimum price per bottle as retail stores, which would amount to an enormous price increase. Raising U-Brew prices would do nothing to prevent spontaneous binge drinking—it takes several weeks to produce a drinkable product—but it would certainly reduce the competition faced by beer companies.

Problem drinking as a social issue already receives considerable government attention. A very high level of taxes boosts the price of beer and provides ample funds for necessary intervention efforts. From this perspective, minimum pricing laws are redundant and unnecessary. It’s impossible to raise beer prices sufficiently to discourage all under-aged drinking without punishing legal-age adults as well. And where there’s an identified problem with specific products, such as high-alcohol single-serving cans, Manitoba’s specific approach seems appropriate. Beyond this, if a beer maker or retailer wants to compete on price, why should the law say no?

Ultimately, minimum pricing punishes the vast majority of Canadians who enjoy their beer in an entirely responsible manner by reducing choice and raising cost. For a nation that loves its suds as much as Canada, that seems warm, flat and stale.


Why is your government standing in the way of cheaper beer?

  1. End the nanny state, we tax it to death, we set anti competitive minimal pricing, heck we even give monopolies on the sale of it government agencies.

    Still it is the substance that is abused the most, and I have seen little evidence that making it a cash cow for everyone involved helps anyone other than those lining their pockets with my hard earned cash.

    As a full blooded Canadian, it makes my blood run cold with fury when I visit other countries and see just how cheap it is.

    • Gov't addiction: taxation! Gov't loves groups it can shift focus on as reason for high cost i.e MADD. Truth is, it adores the taxation. In Ontario, LCBO will announce 'mandatory minimum price' on high alcohol beer, claiming that 'social responsibility' is its 'primary mandate'- read: higher cost will act as 'deterent' to abuse; however, during 1970's liqueur manufacturers saw their product category dropping in sales. Consumer study groups infrom them 'products too HIGH in alcohol': manufacturers reduce alcohol level- new price? NO- same price. Irish cream liqueur now $30 for 26 ounce 17% alcohol bottle- equivalent of pricy bottle of wine. Make no mistake- alcohol prices set to maximize gov't tax returns. The 'buck' passes one way only. To raise a price gov't claims social pressure causes raise- to offer public less alcohol in product at same price gov't says 'people demanded it' i.e. YOU the PUBLIC are to blame fo it all- it is what YOU WANT. Sorry for the sarcasm.

  2. "At current rates, they warn, beer will soon be cheaper than milk."

    Interesting, they suggest raising the minimum price of a good so that it will be more expensive than a good that already priced artificially high.

    More to the point, how long will this take for beer to become cheaper than milk? I pay about $25 for 4 litres of beer (12 cans). I pay $4 something for 4 litres of milk. So, as soon as milk increases in price six-fold, we're good.

  3. If I am not mistaken, many agricultural items also have set prices – isn't milk one of them? There are also "boards" that inflate prices and stop the normal Joe from competing in the marketplace. I believe that beef is one of the few agricultural items that actually competes on the supply and demand market.

  4. I'll drink to that!

  5. Our government stands in the way of cheaper, and fresher, milk, eggs, butter, wheat etc. – they all have 'marketing boards' full of rich people who give a lot of money to favoured politicians who do their bidding, and these boards have the police on their side – try to sell eggs or milk without paying them their quota and you will literally get raided by a SWAT team.

    • That's what gets me angry: the monopolies on these essential foodstuffs that keeps the prices artificially high. It's pretty sad when I can buy 2L of cola for half the price of 2L of milk. I could care less about beer, which is essentially a luxury product.

    • It is not the govt. per say that creates the boards but rather the producers of the products. The beef industry does not want a board and is against minimum prices therfore, they have no board and no manipulating of prices. Other producers are not so much like that. It is interesting that Alberta is the only province that doesn't have a minimum beer price set….perhaps it suggests a more free-market mentality. As for the taxation of alcohol….if you look at the way cigarettes are taxed, you cannot complain about the tax to alcohol. Both items cost the medical system a lot of money. Neither have any redeeming qualities.

  6. That's why we shop in Buffalo…………..then they complain we don't buy local!

  7. This just makes me think that if pot was ever legalized, we'd soon get stuck with the Marijuana Marketing Board to ensure one had to pay a certain artificially high price per ounce !

    • Absolutely! Given that pot is the absolute cheapest intoxicant to produce, if it were to compete freely in a supply/demand market, you'd be looking at somewhere in the neighborhood of $20/ounce +tax (or about 1/10th current street prices). On a per-high basis, that's like 25-50 cents to get high. It would destroy the beer industry, and probably seriously hurt the prescription anti-depression medicine business.

      California's proposed $50/ounce tax would still put pot somewhere in the neighborhood of $75/ounce, if there were no mandated minimum price. For the sake of argument, let's double that price for a similar "social reference price" strategy, and you're looking at $150/ounce. Still less that $1 to get high. Still a problem for the beer industry.

      • I think you'll find that the prescription anti-depressants do just fine. As somebody with depression who has smoked weed (sssshhhhhhh) I can tell you straight up that the pills do a lot more. Weed just gets you high, and getting high to cope with depression is a bad tactic.

        The real worry that governments and corporations have with legalizing weed is this; unless you regulate seeds and growing licenses once it's legal people can grow it themselves. The last bit of this article was about the beer board demanding a minimum price set for U-Brew beer, can you imagine the fits they'd have if you could own a renewable source of weed?

      • Avoid paying anymore taxes than you have to, Brew your own Beer, create your own wine and Liquor and grow your ''own ''…..aaah?..Veggies, yeah thats it veggies !!! It's fun to do you get bragging rights, and best of all ''No taxes '' Beer tastes waaaay better when it only costs you aro $ 2.50 a dozen…40cents for a 1.5 ltre of wine….

  8. Why the NDP, a putative labour party, does not advocate the rational pricing of beer and other alcoholic beverages is a profound mystery to me. How can you claim to represent "working" people when you make these self-same people pay through the nose for enjoying one of life's little pleasures. Have these politicians no shame?

    If low alcohol prices caused drunkenness and other social ills, then Florida should be rife with drunks on every street corner as a 24 of Miller there is not much more than a case of pop. The argument is, of course, a crock and merely a way to satisfy puritan impulses while at the same time enriching the privileged at everyone else's great expense. What's so special about beer that it needs to be priced at nearly $2 per bottle?

    Extortionate beer pricing really underlines how democracy gets subverted by small groups of special interests. There's no way politicians would do this if they acted in the public interest; and there's no way we would let them screw us if we knew and voted for those things that matter to us. This is a perfect case where apathy costs us big time.






    • Freedom Now…For some strange reason I picture you wearing all black and have a bandanna covering face…maybe its the Caps Lock………


  10. At least there is no mandated minimum price for a rub and tug.

  11. I thought manopolies were illegal. Not in the Ontario beer outlet business. The BREWERS OUTLET is OWNED 49 % by AB InBev of Belgium,makers of Budweiser, Becks,Labatts,Busch and 200 other beers.Another 49% is owned Molson Coors of U.S.A. we know some of their brands, ex, canadian,Coors silver bullit, and all the Miller brands. Its no wonder small brewers don.t have a prayer .. The moguls have the MONOPOLY . THINK ABOUT THIS ..Last year in a corner store in Sarasota Florida I purchased a dozen BUSCH beer for $ 6.99 which was ice cold by the way

  12. There are endless governmental commissions to investigate and research almost every useful and useless concern of Canadians. How about an investigation into things that annoy Canadians. Perhaps these annoyances(like fixing the price of beer) started many years ago when times and circumstances were different……simply seem to perpetuate themselves as governments fail to review the current relevance of these practices. Take for instance the Drive Clean tests in Ontario…implemented at a time when most vehicles on the road were manufactured over 20 years ago and totally ignores the advances made with auto emission technology over the past 2 decades. I don't know anyone who has had a vehicle fail this test in the past 10 years…..do you? Yet the Ontario provincial government chooses to continue annoying motorists every two years to take a half day out of their schedule and pay $35 (plus 13% HST of course) for a totally useless test before they will renew your license plate sticker. Time for all levels of government to get back to providing the basic services they were originally intended to provide and stop annoying their constituents with useless and outdated rules and programs.

    • Agree! I had a diesel car, which is exempt from Drive Clean, but still had to pay Canadian Tire to sign my DC papers.

  13. If 'the government has no business in the bedrooms of the nation' then they sure as hell have no right to reward their 'friends/contributors' at the expense of ourselves, the people who give these sycophants their perks,expense accounts, and gold-plated retirement packages. If we ,the citizens,held their feet to the fire,as many countries such as France do, they would think twice before ignoring public opinion with a dismissive wave of the hand.
    Having read the previous comments,I intend to get in touch with my MPP and explain the facts of life re: re-election aspirations.If this prostration to the big beer companies is not stopped, we will hold them(like a 24) to

  14. Socialism sucks, and so does Canada

  15. why does this article surprise anyone?

    hey, we're Canada, we tax the s**t out of everything!

  16. If the price of milk in approaching the price of beer in Quebec, then it is the price of milk that needs to be looked at, not beer.

  17. With the dollar at par with the US dollar, I and all of my friends regularly flock to the US on shopping trips.

    We marvel at the cheaper prices, including beer wine and alcohol.

    It's time for the nanny state to get out of our beer fridges.

    • But Dude…It;s American Beer…Watered down Horse Pee, no body , no ''ooomph "…It's just,,,well,,just ''Un-Canadian "….Next thing you going to tell us is that you drink Cabernet at a Hockey game..( or worse yet you don't like Hockey.) or you eat Pizza with a knife and fork….What is our culture coming too.??..See what the Governments have done to our youth…………..

  18. Step one is to start thinking about beer as food. If drinking is seen as "sin" you pretty much guarantee people will drink too much. Start thinking of beer as part of mealtime and take away the finger wagging disapproval.

  19. The real reason beer is so expensive in Canada is the Gov't taxes.

    I buy all of my sin product's in Buffalo too…..

  20. i rember back in the 70’s that a case of beer in ontario at the brewers retail sold ,for less then a case of pop from the grocery store / example beer by the case was 4.10 and pop was going for about 6 , but since then , till now the fed gov has done a good job of turning most paople in our country into sheaple, us boomers have to start revolting .ever since the kent state incodent ,the gov in the usa followed by us canuc’s have figured how to control us. there doing a good job of getting us to pay for there missmanagements, in extra taxes .after all us tax payers must speak up or they will shovel another one down our throat soon, nowing there’s no recourse. thats probabley why the beer prices here are the pricest in the world.

  21. Two years ago I was in Charleston South Carolina. I priced Canadian liquor at $11.50 for a jar with a handle. Duh!

  22. Buy beer in Quebec. A case 24 costs about 10 to 15 dollars less than in Ontario. Thank you Mr. McGuinty (yet another lie from an asshole)

  23. First, the laws regarding alcohol are prov. regulated. Secondly beer in proper concumption is better for you than milk. Thirdly, I am tired of everybody telling me how to behave. Here in Ont., thank you to Mama McGuinty, even though you are NOT impaired, we can now have our license suspended and fined, which no matter what will affect a person's insurance, and propspect of becoming a police officer, etc. But most of all, in reality the lower the income the more expensive the beer, because it is a higher percentage of income. get gov't out of our lives. We are more of a dictatorship than Russia when it was communist.

    • I am sorry to disagree but beer is not better for you than milk. It is an alcoholic beverage. If you make compare the risks and benefits, there aren't a huge amount of benefits….especially for people who over-imbibe. When we see the amount alcohol costs our healthcare system, we see that perhaps the taxes are valid. No, they don't tax it the same in the US, but they don't have a taxpayer-supported healthcare system.

  24. ping

  25. I heard of some people who recently drove 6 hours to Quebec to load 2 pick-up trucks full of beer and some liquor. They saved tons of money.
    2 things have to happen in order to get the price of beer lowered:
    one – Walmart applies for permission to sell beer in its stores. It could force other large dept store to do the same and their lobby is quite large as a group.
    two – the Native reserves decide to brew their own brand of beer to sell on the reserves only, just like cigarettes. And we know how the regulations regarding cigarettes has worked out. They would not be able to keep up with sales, guaranteed, and the big breweries would soon lobby for a change in the minimum price.

  26. It's criminal and unethical how we have allowed beer to be politicized and over regulated too the point where we need lawyers too explain the complexities of over taxed and over priced beer in Canada….we are shackled by the evil bureaucrats who have carefully, methodically, deliberately rape each and every Canadian for there hard earned money too enjoy a GOD-DAMN beer in this country…..we should bring back the death penalty and hang each and every one of you crooks….you know who you are…GOD DAMN YOU!

  27. Its funny cause if you are rich you can buy a ton of alcohol either way so alcohol abuse is only a problem among the poor folk. That’s rich.

  28. It’s a shame we live in this day and age! A hundred, or so, years ago, there would be armed rebellion over such ridiculous tax rates! I know Canadians think us Yanks to be crazy, but our government couldn’t withstand the backlash of trying to keep us from our beer!

  29. I grew up just across the Big Lake from Toronto! My mother took her breast from my mouth and substituted a Molson’s! I can remember when WE used to cross the border for YOUR cheaper…and much better, beer!

  30. Thank God I live in Miami, FL. USA, where it’s none of the government’s business to try and keep me from drinking what I want. And thanks to our free market, imported 12-packs can often be found for as low as $7.99, which goes a long when having family and friends over for cookouts.

  31. Phuck Canadian govmt for high taxes on booze