AB InBev and Molson Coors Beverage Co. don’t have to face revived claims over their alleged scheme to corner the market for high-volume U.S. beer imports to Ontario, a Wisconsin federal judge ruled.
The claim dates back to August 2017 when Mountain Crest, owner of Minhas Craft Brewery in Monroe, Wisconsin, filed a claim against the two international brewing giants accusing them of having a secret agreement with the government-owned Liquor Control Board of Ontario from 2000 to 2015 that restricted imports and sales of products from other U.S. breweries in the Canadian province. Both brewing groups indirectly control Brewers Retail Inc., a distribution consortium founded in 1927 which has a province wide monopoly on high-quantity beer sales. Mountain Crest said the arrangement violated in this respect the Sherman Antitrust Act and asked for compensation of lost revenues and USD 200,000 in punitive damages (inside.beer, 18.8.2018).
Under Ontario's Liquor Control Act, Brewers Retail Inc., doing business as The Beer Store was formerly the only retailer permitted to sell beer for off-site consumption, other than stores on the site of a brewery, locations of the provincial government-owned Liquor Control Board of Ontario (LCBO), and LCBO-authorized agency stores in certain smaller communities. The act and the company's articles of incorporation further stipulate that Brewers Retail cannot sell "hard liquor" (spirits) or consumer goods (like groceries).
Amendments made to the Liquor Control Act have since allowed for the sale of single and 6 packs of beer at select supermarkets in Ontario. That was done to enhance customer access and convenience. The Beer Store, however, continues to maintain pricing exclusivity in providing consumers discounts on larger packs of beer, along with retail partners, agency stores, combination stores and manufacturer outlets.
What distinguishes the Beer Store is its characterization as a sort of "beer commons." A 2013 Angus Reid survey commissioned by the Ontario Convenience Stores Association found that only 13% of Ontario residents were aware that "The Beer Store monopoly is not a government-owned enterprise.” The Beer Store operates approximately 450 outlets in Ontario and made a gross profit of about CDN 396-million in 2016.
In early June 2019, the provincial government passed legislation to terminate its 10-year contract with the company, six years prior to expiry (inside.beer, 6.6.2019); continued negotiations with TBS were underway prior to actual enactment of the legislation. This step was a prelude to making beer widely available in variety stores in Ontario.
