News source from CTV News
Paola Loriggio, The Canadian Press
Published Friday, August 3, 2018 5:23PM EDT
Last Updated Friday, August 3, 2018 5:35PM EDT
TORONTO — Ontario will see the return of buck a beer by Labour Day weekend, The Canadian Press has learned, though some in the industry predict few brewers will embrace the new, lower minimum price.
A source with knowledge of the plan says the Progressive Conservative government is expected to announce Tuesday that it will lower the minimum price of a bottle or can of beer to $1 from $1.25 by the September holiday weekend.
Brewers would not be required to charge less, however, and the lower minimum price would not apply to draft beer, nor would it include the bottle deposit.
The government is hoping to get brewers on board by launching what it calls a “buck-a-beer challenge” with incentives for those who cut prices to $1, the source said.
The move was one of Premier Doug Ford’s promises during the spring election campaign, and Ford suggested in a video released Friday that he would be making good on it soon. He has also vowed to broaden the sale of beer and wine to corner and box stores.
The Tories have said bringing back buck a beer would allow more competition in the beer market without affecting the province’s revenues from beer and wine taxes, which brought in roughly $589 million in 2016-2017, according to government documents.
Ontario previously had buck-a-bottle beer but the Liberal government quietly hiked the minimum price in 2008, citing its “social responsibility” mandate.
In its heyday, buck a beer was a successful marketing campaign and seized a significant share of the market, said Scott Simmons, president of Ontario Craft Brewers, who was an executive at The Beer Store at the time.
Several brewers adopted it, including Lakeport, which “really took it to town,” said Simmons, who spent a year at the company.
But the costs of making beer have gone up, as have the provincial and federal taxes, making it less feasible for brewers to sell their product at the $1 minimum price now, he said.
“I don’t see many, if any, heading to that price simply from a profitability point of view,” he said.
“I don’t think it can be done in 2018 but some brewers may think it can be done and I’d be interested to see what’s actually in the product that they’re selling at that price,” he said. “It can’t be very good, let me put it that way.”
Few brewers sell at the current minimum price unless they’re having a sale, Simmons said, noting that an additional $6 drop for a case of 24 would likely wipe out any profits.
Still, the move will appeal to value-conscious consumers, though it probably won’t affect the craft beer market, which attracts a demographic that is willing to pay more, he said.
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