Quebec brewers in froth over cheap beer

[jesseps]

Imagine a world in which beer is cheaper than milk.

 

That could be the absurd scenario in Quebec in the not-so-distant future. And it has Canada’s two biggest brewers in a state of frothy exasperation.

 

Molson Coors Brewing Co. and AB Inbev unit Labatt are pressing Jean Charest’s Liberal government to change the rules on setting prices for the malted grain beverage, which they say make no sense. Records show the trade body representing them, the Quebec Brewers Association, has hired lobbyists in Quebec City to press their case. Their mandate runs until the end of June.

 

Quebec sets the minimum price for beer to be sold in the province every April, adjusting it upward or downward based on Canada’s Consumer Price Index (CPI). The CPI itself is a measure of the change in what consumers coast to coast are paying for things. It compares over time the cost of a fixed bucket of commodities, including food, shelter and transportation.

 

The brewers want the government to set the floor price for beer based on the most relevant index, which they say is a Quebec food inflation index. They say most Quebecers buy their beer at the supermarket or corner store along with their other food staples.

 

The brewers argue it’s more logical that the price be tied closely to food and beverages being bought locally than CPI measures such as the cost of women’s clothing in Ontario or rent in Alberta.

 

“We’re not saying the prices are too low,” said Philippe Batani, who heads the Quebec Brewers Association. “We just think it should follow same rate of increase as the grocery basket.”

 

Basing Quebec’s beer prices on the CPI resulted in a price increase of 0.3% in 2010, less than the increase in the price of grocery staples as a whole.

 

If current trends hold, beer could eventually be cheaper to buy in Quebec than milk, the Brewers Association says.

 

The current minimum price for typical beer with 5% alcohol is $2.85 per litre. The average retail price for one litre of partly skimmed milk in Canada was $2.14 in November, according to Statistics Canada.

 

The brewers will obviously benefit from any price increases. But they’re evoking a more altruistic purpose for seeking the rule change.

 

“The reason why we have a minimum price at all is for social reasons,” said Molson spokesperson Marie-Hélène Lagacé. “And we fear that if the price of beer as an industry rises lower than the price of milk or butter, we have a social issue,” namely irresponsible consumption.

 

Price is a major component of the decision to consume, the brewers argue. Beer has been cheaper than bottled water for at least three years in the United Kingdom, where grocers have been accused of encouraging binge drinking by discounting booze.

 

Most Canadian provinces have some form of minimum pricing governing beer and other liquor, whether it be at the retail level or for restaurants and bars. Alberta is a notable exception. It does not impose floor prices for beer on retailers.

 

“I’ve been in the business for 20 years and these [minimum prices for beer] they’ve always been there in some way given the highly regulated nature of alcohol in this country,” said Jeff Newton, president of the Brewers Association of Canada. “The industry is pretty used to them. It’s a fact of life.”

 

Not everyone agrees it’s good policy.

 

Mark Hicken, a lawyer in Vancouver who writes about legal issues related to the wine industry in Canada, argues that instituting minimum prices on alcohol simply penalizes the vast majority of responsible drinkers in order to target a tiny minority of people who are having problems controlling themselves.

 

“If you carried that over to other areas, we should be jacking up the price of potato chips because we eat too much,” Mr. Hicken said. “It’s kind of a silly way of looking at things.”

 

Read more: http://www.montrealgazette.com/business/fp/Quebec+brewers+froth+over+cheap+beer/4072041/story.html#ixzz1AJsv4pHS

[Cataclaw]

How generous of the beer industry to caution against cheap prices at their own expense. I'm sure their regard for this "social problem" is totally pure and genuine! I mean, it's not like profit is an issue for corporations or anything...

[WestAust]

How generous of the beer industry to caution against cheap prices at their own expense. I'm sure their regard for this "social problem" is totally pure and genuine! I mean, it's not like profit is an issue for corporations or anything...

 

Actually, Quebec is where they make the less money on beer in Canada.

 

when yoy compare to Ontario, where a 24 of coors light is sold 33.95 whereas here, it's sold for 21.99, problem is, they just cannot raise the price together, as they will be called off on collusion pricing, and another smaller brewer will simply keep it's price lower and grab market shares over them.

[Cataclaw]

Actually, Quebec is where they make the less money on beer in Canada.

 

when yoy compare to Ontario, where a 24 of coors light is sold 33.95 whereas here, it's sold for 21.99, problem is, they just cannot raise the price together, as they will be called off on collusion pricing, and another smaller brewer will simply keep it's price lower and grab market shares over them.

 

I was sarcastic, if you didn't pick up on it I'm saying that beer companies are obviously interested in profit more than any "social problems".

[Cyrus]

I was sarcastic, if you didn't pick up on it I'm saying that beer companies are obviously interested in profit more than any "social problems".

 

It's still a social problem for people to be overpaying on beer! They should be paying the market price as with any other commodity. Milk is artificially inflated and so is beer. Boooo!

[steve_36]

Je comprends que le gouvernement puisse controler le prix du pain, du lait et des garderies.....mais de controler le prix de la bière à mon avis est un non sense. Le gouvernement devrait fermer cette agence et se retirer. Il devrait se concentrer sur des ''problèmes'' plus sérieux. Le prix de la bière se fixera selon l'offre et la demande les brasseries s'adapteront bien toutes seules.

[Habsfan]

Entièrement d'Accord avec toi steve. UN autre parfait exemple qui démontre la grosseur de notre gouv.

[BiloMtl]

Actually, Quebec is where they make the less money on beer in Canada.

 

when yoy compare to Ontario, where a 24 of coors light is sold 33.95 whereas here, it's sold for 21.99, .

 

Bon ben pour une fois j'en ai pas trop comme les mécanismes de fixation des prix haha