Ontario Beer Store monopoly battle could go to court

A would-be rival is looking to make an unprecedented legal challenge to an Ontario law that makes the Beer Store the only private retailer able to sell beer that's not brewed on-site in an effort to open up private beer sales to any licensed vendor willing to sell beer responsibly.

Toronto-based Barge Craft Beer Distribution is challenging a provincial law dating back to 1927

Previous Liberal governments had promised to introduce beer sales to convenience stores, but never followed up on the commitment. (Fred Prouser/Reuters)

Whether you see Barge Craft Beer and Distribution as a startup or an upstart depends on your perspective. 

The Toronto-based company was formed in November of 2014 and aims to barge in on the province's retail beer sales by challenging an almost century-old law that gives the Beer Store an 80 per cent share of a market worth an estimated $3 billion.

"I personally believe in ideals such as democracy, fairness and competition," Michael Hassell, Barge's owner and chief legal counsel said Tuesday. 

"Competition should be fair and there's no way the government should be giving away a monopoly to a single private company to sell beer. Other companies should also have an equal opportunity in retailing beer."  

Company challenges prohibition era law

To do that, Hassell has launched an unprecedented legal challenge to the Ontario Liquor Act, a law that dates back to 1927 and makes the Beer Store Ontario's only private retailer capable of selling beer without brewing it on-site. 

"Everybody but the Beer Store wins if the Beer Store's monopoly is invalidated," he said.

"Brewers will have a place to sell their beer and consumers will have greater choice, they'll have many more places to go and retailers will also benefit. They'll be able to sell one more product."

The law no longer makes sense in these circumstances- Michael Hassell, owner of Barge Craft Beer and Distribution

Hassell argues that the section of the provincial Liquor Act that governs the Beer Store, which dates back to the post-prohibition era in Ontario, no longer reflects the times. 

When the law was first enacted in 1927, the Beer Store, or Brewer's Retail as it was known then, was a small cooperative of provincial-based breweries, Hassell said. 

In the almost 90 years since, those breweries have consolidated into a consortium of three foreign-owned corporations, U.S.-owned Molson-Coors, Japanese-owned Sapporo, and Brazilian-owned Anheuser-Busch-InBev, all multinationals that own the vast majority of the Beer Store's shares.
Michael Hassell is the owner of Barge Craft Beer Distribution and the Toronto-based lawyer behind the legal challenge to Ontario's 89-year-old Liquor Act, which makes the Beer Store the only private retailer capable of selling beer outside of a brewing premises. (Hassell Trial Law)

"And so the law no longer makes sense in these circumstances and just requires a tweak," Hassell said.

The Beer Store said it would not comment on the legal challenge, since it is not a party to the dispute. 

Once Hassell files his notice, the Ontario government has 60 days in order to come up with a response.

If the dispute cannot be resolved by some other means, then the province would have no choice but to defend the post-prohibition era law in court.