Low Prices Of Beer In Quebec Are Hurting Small Depanneurs

How is it that in Ontario, a neighboring province of Quebec, beer is much more expensive … but not just by a little: we mean much much more expensive!

A few examples.

A case of 12 X 355 ml cans of Bud Light will be 36% cheaper if you buy it east than west of the Outaouais River.

In any branch of The Beer Store, which enjoys a monopoly on the sale of beer in Ontario, you will find this product at a flat price of $ 26.55.

In Quebec, the same product stands at $ 16.99 at IGA, Metro or Ultramar’s Dépanneur du Coin (Corner Store).

It’s a difference of $ 9.56 for a totally identical product.

This product is therefore 36% cheaper to buy in Quebec or, conversely, 56% more expensive to buy in Ontario!

When discounted, you may even find this product at $ 15.99, $ 14.99 or much less around here.

The pricing comparison becomes frankly troublesome when Quebec retailers are the least aggressive:

• A case of 24 bottles of 341 ml of Budweiser: $ 36.95 in Ontario against $ 30.99 in Quebec at IGA (20% more expensive in Ontario);

• A case of 12 bottles of 341 ml of Michelob Ultra: $ 23.50 in Ontario vs. $ 17.99 in Quebec at Ultramar’s Dépanneur du Coin (31% more expensive in Ontario);

• A case of 24 bottles of 330 ml of Heineken: $ 49.95 in Ontario against $ 29.99 in Quebec at Costco (66% MORE EXPENSIVE IN ONTARIO)!

These are astronomical price differences for identical products sold in neighboring provinces!

But is it Ontario that is selling too high or Quebec that is selling too low, somehow forced to crush its prices? A bit of both, no doubt.

Two completely different regulatory systems

We will revisit this topic regularly but for now, let us just highlight some aspects of the Quebec and Ontario regulations.

First in Ontario, beer is sold exclusively through The Beer Store, a network of 438 stores owned and operated by major brewers.

The beer industry in Ontario enjoys an ideal regulation to maximize their profits:

• They have only 440 distribution points to cover, which limits their transportation costs (compared to Quebec with 8,000 grocery stores and convenience stores to cover);

• The minimum price is significantly higher than in Quebec;

• Beer taxes are generally lower in Ontario than in Quebec, according to a study endorsed by the Ontario Convenience Store Association (OCSA).

So aside from a higher minimum price, it costs less to distribute beer in Ontario and there are fewer taxes. But what really lacks over there is competition between retailers.

And in the meantime, the brewing industry lobby continues to praise the Ontario system for consumers! We are trying hard not to laugh.

Prices too low in Quebec?

We are lucky in Quebec in part because the convenience stores here have at least the right to sell beer and wine. But at what price?

The current prices are too low: they hurt small depanneurs that can barely make a cent of profit on the beer sale.

The minimum price in Quebec is well below the market price and since the consumer does not want to pay more than this minimum price, retailers are stuck with it.

They will do everything to confuse the consumer price benchmarks with various bizarre formats of 15, 18, 20, 28 containers as well as ‘king cans’.

But the solution, the real one, would be to raise the Quebec minimum price of beer more rapidly to help small convenience stores.

In conclusion, here is a spectacular video of the beer section at Costco in Gatineau … where thousands of Ontarians shop weekly to bypass the excessive prices in Ontario.