Brewery gouging costs Ontarians $75 million a year

TORONTO, April 21, 2014 /CNW/ - Restaurants and bars in Ontario pay $75 million more than consumers each year for 24-bottle cases of beer. A price analysis by Restaurants Canada shows brands such as Molson Canadian, Coors Light and Budweiser cost the restaurant industry an average of 30% more per case than the public. For Labatt Blue, the cost increase is almost 50%.

"Unlike all other business inputs, wholesale beer prices for restaurants are actually higher than public retail prices," says James Rilett, Restaurants Canada's Vice President Ontario. "Unfortunately, as with all costs to a business, these excessive prices are passed on to the consumer."

Breweries take advantage of their unique market position to arbitrarily charge restaurateurs more than the public. Due to the flat-tax pricing of beer, the Government of Ontario does not receive additional revenue from the higher licensee price. Instead, the majority of these profits flow directly to the foreign owners of major brands.

"Our industry has to ask that prices be lowered to only the basic retail price, which is absurd and represents a market aberration that shouldn't exist in a free market economy like Ontario," says Rilett. "Breweries should immediately bring wholesale prices in line with retail prices. If not, the government should step in to address this inequity." 

The Beer Store further discriminates against restaurant and bar owners by not allowing them to buy products on 'Limited-Time Offers' or use credit cards for payment.

"The beers brewed by these major companies are popular and our members want to carry them," says Rilett. "But they are exploiting our members for serving customers what they want."

Restaurants Canada represents Ontario's $28 billion restaurant and foodservices industry. Our members employ over 425,000 Ontarians in every town across the province.

Restaurants Canada (formerly the Canadian Restaurant and Foodservices Association) is a national association comprising 30,000 businesses in every segment of the foodservice industry, including restaurants, bars, caterers, institutions and their suppliers.  Through advocacy, research, and member programs and services, Restaurants Canada is dedicated to helping its members in every community grow and prosper. 

Canada's restaurant industry directly employs more than 1.1 million Canadians, contributes $68 billion a year to the Canadian economy, and serves more than 18 million customers every day.

Backgrounder attached: The Beer Store Price Gap Analysis by Restaurants Canada

SOURCE: Restaurants Canada

Prasanthi Vasanthakumar, 1-800-387-5649, ext. 4254 or [email protected].