Battle brewing over suds prices in Quebec

Quebec convenience stores are calling on the provincial government to raise the minimum price of beer.

“The government hasn’t raised the minimum price in years,” said Michel Gadbois, president of the Association québécoise des dépanneurs en alimentation (AQDA).

As a result, a case of 24 beers sells for about $10 lower in Quebec than in Ontario. Smaller independents cannot compete with the bigger rebates big box stores receive from brewers, he said.

READ: Manitoba raising minimum price on beer

“A lot of c-stores in Ontario are telling us ‘at least you can sell beer. Don’t complain,’ but it’s a loss leader. Sometimes it’s a mixed blessing to have that product.”

Gadbois was interviewed on the heels of the AQDA’s annual general assembly which was held last week.

During the meeting, Quebec became the first regional affiliate of the Canadian Convenience Stores Association (CCSA) to officially approve an affiliation with the National Convenience Stores Distributors Association (NACDA).

READ: Ontario's PR battle over suds in corner stores

NACDA represents the interests of independent and institutional distributor-wholesalers and manufacturer-suppliers who serve Canada’s convenience and grocery store market.

The affiliation “is a big change for our industry,” Gadbois said. It will bring distributors and retailers together, “which makes sense if you think about it.”

The NACDA affiliation with the CCSA has to be approved by the other CCSA affiliates in Atlantic Canada, Ontario and Western Canada, which Gadbois said is likely.

It’s not just the minimum price of beer that has staying unchanged for years, Gadbois said, it’s also dépanneurs’ margins on lottery ticket sales.

READ: The battle for booze sales in Canada

However, he notes that starting this year, retailers who sell higher value winning lottery tickets – with awards of a few thousand dollars or more - are being taxed by the Quebec government on the 1% compensation they receive.

“The government has been hitting retailers regularly in Quebec,” he said noting the cost for permits required by dépanneurs has increased by as much as 30% over the rate of inflation for the past 10 years.

He noted Canada’s convenience store industry is preparing a green paper on industry regulations that will be presented in the fall and will cover everything from excessive red tape to caps on credit card fees.

READ: C-stores look for more wine, less red tape

“Our problem is not being competitive with other channels. Our problem is being over-regulated and we haven’t been active enough to fight it.”

Gadbois said the green paper will also include a call for mandatory age verification in which consumers buying alcohol or tobacco would have to scan IDs like health cards. “That will be quite a transformation for the industry.”