Details released today from a study conducted by University of Waterloo Associate Professor of Economics, Anindya Sen, claim that differences in the prices of identical products between Ontario and Quebec enables the foreign-owned Beer Store to capture as much as $700 million in “incremental profits” each year because of the near-monopoly on beer retailing it enjoys in Ontario.
The Beer Store is owned by Anheuser-Busch InBev of Belgium, Molson Coors Brewing Company in the United States and Sapporo in Japan.
The study was sponsored by the Ontario Convenience Stores Association, who are lobbying for extended alcohol sales in retail settings in Ontario.
“This study found that there are significant differences in average beer prices between Quebec and Ontario. Beer prices are an average of $9.50 per case or 27 percent higher in Ontario versus Quebec,” said Professor Sen. “These findings aren’t necessarily an argument to reduce beer prices, as there are arguments that higher prices play an important social policy role. But it raises the important question of whether through modernizing retailing the Ontario government could be benefiting more – and capturing more revenue – particularly in a period of large government deficits.”
“Professor Sen’s conclusions remind us why we need to have a serious discussion about Ontario’s outdated alcohol retailing system,” said Dave Bryans, CEO of the Ontario Convenience Stores Association. “We know that Ontariocan expand alcohol retailing to more private retailers and still earn the revenue it now receives from the LCBO – and more.”