In 1984, Jason Fisher was a grade 10 student trying to come up with a better idea for a science project than throwing something off a roof.
It was at a Zellers where he and his lab partner found three John Bull homebrew kits — one red, one green, one blue. They chose the red box, an ale, and set to work convincing their teacher at Toronto Waldorf School of the educational merits of a couple of teenage boys making beer. Their teacher — a “pretty cool” guy, Fisher said — told them they could go ahead as long as they emphasized the chemistry of beer instead of the drinking.
In turn, the pair tried to compensate by making a bulletin board display about the chemistry of brewing — the life cycle of yeast, how sugar is converted to alcohol — to satisfy their instructor.
“Of course we drank the beer,” said Fisher.
“It was probably by today’s standards pretty terrible, but for a 16-year-old, it was amazing.”
Nearly 30 years and one science degree later Fisher is the owner of the Indie Alehouse in west-end Toronto, which has become the outlet for his lifelong passion for brewing. “There’s a major science component to it, but if it was just science, robots would make beer,” Fisher says. Philosophically, however, craft beer is artistry in a pint glass. Last year the pub brewed 48 different styles of beer, 38 of which were one-off experiments. Fisher flavoured one beer with smoked coconut; another, a sour ale, he aged with raspberries. He used 10 different kinds of hops to make a single imperial India pale ale, which packed an 11-per-cent-alcohol wallop.
Indie Alehouse owner Jason Fisher gives a tour of his brewery in Toronto’s west end. (Graham Runciman/Postmedia)
Indie Alehouse is one of an estimated 150 small brewers in Ontario who have been brewing a liquid smorgasbord of inventive flavours, like the spice of white pepper, or a sweet hit of watermelon, or a refreshing splash of green tea.
But to enjoy the products of Fisher’s imagination you have to be a patron of the Indie Alehouse, because like many other inventive brews in Ontario, you can’t find them all on store shelves.
Unlike other provinces, The Beer Store is Ontario’s only sanctioned private outlet for beer and that provincial blessing has netted them 80 per cent of Ontario’s beer sales. The remainder comes from government-run LCBO stores, which mostly deal in wine and spirits. Craft brewers can also sell their own, but only at their own retail space, and only if it’s attached to the physical brewery.
Although Ontario’s craft beer industry is rapidly growing, brewers say the rigid retail environment creates unfair expense, stifles innovation and discourages the sort of growth that could put the province on par with other craft-soaked markets.
The beer selection at Indie Alhouse in Toronto. (Graham Runciman/Postmedia)
In the industry, craft brewers are defined as those who produce a maximum of 160,000 hectolitres — or enough to fill more than six Olympic-size swimming pools. There’s a joke in the industry that the big guys spill more beer in a day than a craft brewer makes in a year.
In British Columbia, the market share of craft beer is pushing past 20 per cent based on tax revenue, according to the BC Craft Brewers Guild. In craft-crazy Portland, Oregon, it’s nearing 50 per cent. While the sales of domestic beer from the big three — Molson, Labatt and Sleeman — have eroded, craft beer has experienced consistent growth across the country. Even those who aren’t craft connoisseurs are likely to have heard of Steam Whistle, Mill St. or Alberta’s Big Rock, all independently-owned small brewers who hit the big time.
The demand is certainly there. According to the LCBO, Ontario’s government-run liquor stores, Ontario craft beer sales grew by 575 per cent between the 2006 and 2013. Craft beer is the fastest-growing category at the Beer Store and sales in the system have increased 67 per cent over the last five years. Even with this boom in both new breweries and sales, Ontario’s industry has found itself playing catch-up. The market share by volume sold in Ontario was three per cent as of a year ago, according to a 2013 report from Ontario Craft Brewers.
And yet, brewers say, the system in Ontario that has been in place since the 1920s, is hindering their craft.
Both the LCBO and Brewers Warehousing Company Ltd. were born in 1927 in the tense afterglow of failed prohibition. Although private enterprise, Brewers Warehousing Company Ltd.’s monopoly status meant the province could still cool temperance tempers while appeasing brewers. At first a co-op, brewers bought out the retail side of the business in 1940, becoming Brewers Retail, now better known to Ontarians as The Beer Store.
Some 74 years later and after a series of mergers and acquisitions, the Beer Store’s ownership now lies outside not just the province, but the country.
Molson and Labatt each hold a 49 per cent stake in The Beer Store, and although both still brew in Canada, neither is based here. Molson merged with American brewer Coors in 2005 and is now incorporated across the border. Labatt was bought by Belgium’s Interbrew in 1995, which in 2004 merged with Brazil’s AmBev, which then merged with America’s Anheuser-Busch in 2008 to create the current incarnation of Anheuser-Busch InBev. The last remaining Canadian holdout, with just two per cent ownership, was Guelph, Ont.’s Sleeman, which was purchased by Japan’s Sapporo in 2006.
These three big brewers have control of how the majority of Ontarians get their beer, but they’re quick to downplay their grasp.
“One of the biggest myths about the Beer Store is the notion that the Beer Store is a monopoly,” said Jeff Newton, Beer Store spokesperson and president of Canada’s National Brewers, the group that represents the interests of Molson, Labatt and Sleeman.
Newton says a monopoly “controls who gets in to the market and they control price. And the Beer Store doesn’t do either of those.”
Newton’s interpretation is debatable, but he’s right in that any brewer, big or small, can be stocked at the Beer Store in as many locations as they desire — for a price. This is how it breaks down: For every brand a brewer wants listed, there’s a $2,800 flat fee up front, plus about $225 per store they want that beer sold in (that fee drops after the first 130 stores). After that, there’s a service fee. Unlike the listings fees, the service fee is on a sliding scale based on volume sold, so small brewers get a break.
It’s a bit like Ford having to sell their cars in a Toyota dealership
To put that in perspective, a craft brewer with an IPA and a wheat beer is looking at more than $28,000 to sell just those two brands at 50 of the Beer Store’s 447 locations, before service fees.
There are currently more than 400 craft beer brands in the Beer Store’s system, representing more than 100 Canadian and international small brewers.
“The Beer Store is not a natural partner for craft beer,” said Mike Gurr, operations manager for Kensington Brewing Company.
“It’s fair in a sense that you’re able to [get in] but they set the bar extremely high in terms of cost and the barrier of entry is very high for smaller breweries.”
Currently a contract brewer, Kensington Brewing is working on building its own brewery in their namesake neighbourhood, Toronto’s Kensington Market. They’ve been selling through Ontario bars and the LCBO, but are about to launch their Watermelon Wheat beer at 45 Beer Store locations as a trial run of sorts.
Even if the Beer Store’s system is open, there’s a hesitancy to enter among some craft brewers, and it’s a matter of trust.
“Philosophically it’s odd because we’re forced to kind of pay our competition for the right to sell in their stores. Doesn’t take a rocket scientist to see how it’s a bit of a strange arrangement.”
(Graham Runciman/Postmedia)
Gary McMullen, president of Bracebridge, Ont.’s Muskoka Brewery, simply doesn’t see the playing field in Ontario as level for all brewers.
“When you think about that dynamic where you’re trying to sell beer through your competitors it can be a little bit challenging in spite of the fact they want to help,” said McMullen.
“It’s a bit like Ford having to sell their cars in a Toyota dealership.”
Before 2002, the only way to buy booze in B.C. was at government-run liquor stores. Since opening the system to a second, private tier, small brewers have gotten a leg up, such as Ben Coli, who just opened Dageraad, a microbrewery specializing in Belgian styles in the Vancouver area.
Booming is an understatement
“We have a way better system when it comes to that sort of stuff out here,” said Coli.
“When smaller breweries start up, you can sell to the government store but you have to do quite a bit of volume and most of us aren’t starting at that level,” said Coli. He said the biggest hurdle for him was getting his license from the province but that, by comparison, it was an easy process.
Craft beer is big business in B.C., with 70 breweries already operating and another 17 slated to open.
“Booming is an understatement. I call it a reverse death clock — by the time we might have finished this conversation there might be another one open,” said Ken Beattie, executive director BC Craft Brewers Guild. The association is pushing for even more opportunities to promote B.C. craft beer, including specialized sections at government-run stores and beer tourism in the same vein as wine tourism in the Okanagan Valley.
Like Ontario, many of B.C.’s liquor laws came from a time when keeping heavy-handed control over sales trumped supporting an industry. But, unlike Ontario, B.C. is ready to modernize. In June, the province announced a series of changes to its antiquated laws, including liquor sales at grocery stores and happy hours at bars and restaurants.
“Being able to pick up a bottle of local wine at your local farmers’ market is one of many balanced changes that support convenience and choice for consumers and economic growth for B.C.,” Minister of Justice Suzanne Anton said in a statement.
In another sign of the changing times, last December Alberta lifted rules that forced brewers to produce 5,000 hectolitres per year, at minimum, before they could sell. The rule effectively squashed the dreams of small-time brewers and the province hasn’t seen the same brewery boom as Ontario, B.C. or Quebec.
Opening up the beer market isn’t just good for consumers, it’s a potential job creator. A report from Conference Board of Canada last year found 1 in 100 Canadian jobs are connected to the beer industry.
Beer Store spokesperson Jeff Newton shows some of the craft beer selection at a self-serve Beer Store location in Toronto. (Graham Runciman/Postmedia)
If Ontario’s retailing system is a problem that needs fixing, there are few willing to bite the bullet. At the provincial level, the Liberals, Progressive Conservatives and New Democrats all shied away from the issue in the June election, despite what appears to be a rising backlash. Only the Greens — the party with the least to lose — spoke of reform.
The small brewers interviewed for this story agreed that change will come, but when or how remains to be seen and the Beer Store is clearly ready to do battle. Retailers like convenience stores and grocery chains have been clamouring for the right to sell beer and wine. But, in response, the Beer Store has launched Ontario Beer Facts, a public education campaign designed to send their own counter messages.
Last April, they released a much-talked about video warning that selling booze in convenience stores would make it easier for kids to buy it. The ad was criticized as propaganda and insulting to convenience store owners who the government already trusts to sell cigarettes.
“The most frustrating part is we can’t even have a legitimate conversation with politicians and the powers that be because as soon as this becomes a blip on the radar, there’s fear-mongering and nonsense commercials out there about kids injecting beer in their eyes,” said Fisher.
“There’s a long history of politicians in Ontario saying we need to change the system to different degrees who then get elected and no longer want to change the system. Someone either shows them a secret piece of paper that says aliens are going to invade or here’s a cheque.”
If the province is unwilling to completely relinquish control of liquor sales to the free market, Fisher says the next logical step would be a chain of government-sanctioned, craft-only independent beer shops.
In the mean time, it appears the craft beer industry has nowhere to go but up. Where many of us had fathers who kept the fridge stocked with only one brand, Fisher said a new generation of beer drinkers is snubbing the one-brew-fits-all approach and the bikini-babe marketing that comes with it.
“The newer generation isn’t going to drink what their parents drank,” said Fisher. “The joke in the industry is, when you see one of the big brewer’s commercials, all the actors in it drink my beer.”