Canada: Quebec small retailers ask government to hike price of beer

A price war brewing between Quebec's beer retailers is hurting the province's independent convenience stores, says an industry group, but their proposal to hike the cost of bitter is getting a frosty reception, Canadian Business posted May 21.
Quebec currently has the cheapest average price in Canada for a case of 24 beers, according to figures compiled by the Canadian Brewers Association.

However, an association representing the province's smaller convenience and grocery stores - which are allowed to sell alcohol - says the low price of beer in Quebec is forcing its members out of business.

"It's serious," said Yves Servais, assistant director of L'Association des depanneurs et marchand du Quebec. "Small entrepreneurs are losing their businesses."

Around 200 independent convenience stores have gone out of business in the last three years, in large part because of stiff competition in the beer market, Servais said.

To deal with the problem, Servais is calling on the provincial government to raise the minimum price for a case of beer.

Quebec introduced a minimum price in 1995, aimed at limiting consumption as cheaper American products arrived on the market.

But since then the government's minimum price, which is indexed to inflation, has risen only 25 per cent, while the price retailers pay brewers has increased 32 per cent, said Servais.

The problem is compounded by larger retailers who regularly use beer as a loss leader.

According to Servais, it's not unusual for such retailers to buy cases of 24 for $26.95, only to sell them for $21.90 - the lowest price currently allowed under Quebec law.

He said smaller convenience stores, known in Quebec as depanneurs, simply can't afford the same strategy.

"The sale of beer represents between 25 to 30 per cent of the sales volume in a depanneur. For us, it's a star product," Servais said.