MONTREAL -- A price war brewing between Quebec's beer retailers is hurting the province's independent convenience stores, said an industry group, but their proposal to hike the cost of bitter is getting a frosty reception.
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 storeswhich are allowed to sell alcoholsaid the low price of beer in Quebec is forcing its members out [image-nocss] of business.
"It's serious," said Yves Servais, assistant director of L'Association des depanneurs et marchand du Quebec, told the Canadin Press. "Small entrepreneurs are losing their businesses."
Around 200 independent c-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%, while the price retailers pay brewers has increased 32%, 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 $21.90the lowest price currently allowed under Quebec law.
He said smaller c-stores, known in Quebec as depanneurs, simply can't afford the same strategy. "The sale of beer represents between 25% to 30% of the sales volume in a depanneur. For us, it's a star product," Servais said.
His association wants the government to hike the minimum price of a 24-pack to $23.70, giving smaller retailers a chance to compete with their larger counterparts.
Servais said the government should peg its minimum price to the cost of beer, rather than the cost of living.
But the Quebec government claims its hands are tied in the matter. "Effectively, there seems to be an economic problem within the beer market," said Rejean Theriault, a spokesperson for the regulatory agency that oversees alcohol. He said that the government's minimum price was established strictly as a temperance measure. "The minimum price has nothing to do with economic regulation," he said, adding the government would only raise the bar if excessive drinking was on the rise.
Servais's lobbying efforts are also likely to find few supporters among thirsty Quebec consumers. "Paying more would be unfortunate," said Noah Forrest as he paid for a case of Labatt Blue at an Alimentation Couche-Tard Inc. c-store; however, Forrest added that he would be willing to spend a little more for beer if it meant saving Quebec's independent stores. "A couple of bucks won't kill me," he told CP. "Plus, you get better service at the smaller depanneurs anyway."
Servais admitted that a price increase may put some consumers out of sorts during the short-term, but he stressed that changes are necessary to guarantee the long-term survival of Quebec's independent corner stores. "There are little villages in Quebec that no longer have a depanneur," he said, adding that on average two independent stores close in the province every week. "If you let all the little depanneurs close, there are monopoly situations that will emerge, and the big chains will have free reign to do what they want at that point."
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