REPORT: Prices at the Beer Store lower than in Quebec, despite higher taxes

Independent study corrects myths about beer prices

TORONTO, Aug. 20, 2014 /CNW/ - Even with much higher provincial taxes in Ontario, prices at the Beer Store are still lower than average prices in Quebec grocery stores, a new study reveals.

While federal taxes on beer are identical in Ontario and Quebec, Ontario's provincial beer taxes are significantly higher – double the Quebec provincial tax on beer.

And yet, average beer prices are still lower at the Beer Store, concluded the report released today from Navigant Consulting on behalf of Canada's National Brewers (CNB).

"The overall picture that emerges is very clear... the Ontario post-tax average price is actually lower than Quebec's despite Ontario prices bearing a significantly higher tax load," the report concluded.

The report was conducted by Debra J. Aron, PhD of Navigant Consulting, who is Adjunct Associate Professor in Northwestern University's Master of Science in Communications program and is a noted expert in economic policy matters.  Unlike other recent pricing studies that used small biased price samples, including those authored by Professor Anindya Sen on behalf of the Ontario Convenience Store Association, the Navigant study examined beer prices across all beer products in the two provinces over an entire year (2013).

The Navigant study also noted that based on consumption differences, Ontario beer drinkers appear to enjoy a much broader selection of choices at the Beer Store than consumers in Quebec grocery stores.

Pre-tax price differences between the two provinces were even more pronounced – with Ontario beer prices much lower than in Quebec. The report found:

- The volume weighted average pre-tax price per litre for all beer products sold in Ontario was 18 per cent lower than the volume weighted average pre-tax price of all beer products sold in Quebec.

- The volume weighted average pre-tax prices for the bestselling package sizes --- six, twelve and twenty-four --- were all lower in Ontario than in Quebec.  For example, the volume weighted average pre-tax price of a 12-pack of cans was $2.34 per litre in Ontario, and $2.91 per litre in Quebec, a 19.6 percent difference.

- Pre-tax prices in Ontario were $0.23, or 8.7 percent, lower than pre-tax prices in Quebec when comparing beer products that are common to both markets.

"This report proves conclusively what Canada's National Brewers have always known, that the Beer Store is an extremely competitive retail model that offers some of the lowest beer prices in Canada and a wide selection of beer" said CNB President Jeff Newton. "And we know from experience in Western Canada that deregulation leads to much higher beer prices."

About Canada's National Brewers:

Canada's National Brewers (CNB) is the national trade association representing Labatt Brewing Company Ltd., Molson Coors Canada and Sleeman Breweries Ltd. CNB has offices in Mississauga, Ontario and Vancouver, British Columbia and is responsible for representing its member companies on a wide variety of public policy, legal and regulatory affairs, community interest and public image fronts.

SOURCE Canada's National Brewers

PDF available at: http://stream1.newswire.ca/media/2014/08/20/20140820_C2482_PDF_EN_4963.pdf

For further information: To coordinate interviews: Jay Armitage, Jay.Armitage@Fleishman.ca, 416-645-8174