Michael Hassell is the man behind Barge Brewing Co, the company that has put the Ontario government on notice for a lawsuit in the hopes of changing the current liquor laws.
We had a chance to chat with him about the situation:
You mentioned on Twitter that you contacted brewers in the fall. That means you and your company (Barge Craft Brewers specifically) have been around since then. How long have you been planning this and how long has the company been around?
On October 1, 2014, I emailed all craft brewers with listed on the excellent directory of the Ontario Craft Beer Network (momandhops.ca). Timetables were outlined: 2 months for consensus building and idea gathering, 4 months to determine a strategic approach and implementation beyond that. Things are ahead of schedule. Barge Craft Beer was incorporated November 17, 2014. My correspondence to the craft brewers can be found online: http://www.bargecraftbeer.ca/?p=165
Additionally to that: What kinds of responses did you get from brewers when you contacted them? Can you please give specific examples of the brewery and what they said?
My discussions with brewers have been very positive. I’ve talked to brewers over the phone, at breweries, at offices and at the Ontario Craft Brewers Conference (note: Barge has no affiliation with the Ontario Craft Brewers Association). Thank you all for your time.
Everyone has been in favour of getting rid of The Beer Store’s monopoly. But no craft brewer has as of yet indicated a desire to be party to legal proceedings with the Government that also impact the Beer Store. I understand and respect that. Litigation is time-consuming and distracting. Litigating with the Government which regulates all aspects of one’s business is uncomfortable. The Government determines who gets a manufacturing licence. The Government owns the LCBO. Litigation that could invalidate the Beer Store’s monopoly at the same time as you’re trying to sell through the Beer Store is also a challenge. In light of professional obligations concerning confidentiality and sensitivities in litigating with the Government, I respectfully decline to name brewers.
Having said that, if any Ontario craft brewer would like to sign on as an applicant next to Barge Craft Beer, I would be delighted and would welcome them with open arms. Keep in mind that Barge is a distributor & retailer. We are the first company in Ontario to compete with the Beer Store. But Barge does not brew. Having a craft brewer on board would be great and strengthen the application because it would add a brewer perspective.
Do any craft brewers want to pony up with Barge? Please call me at 416-944-2274 to discuss.
I am a big craft beer fan. I always liked beer and drank the mass-produced stuff back in the day, but once I switched to craft, there was no turning back. I think this is a common experience. I love practicing law and decided to explore the legal issues affecting the craft beer industry. I got hooked reading all kinds of great craft beer stuff online. Most of it is about this beer or that beer, lots of venting, but very little about beer law. So I studied the liquor acts, regulations, AGCO policies, LCBO policies, etc. These are boring reads, but what an insight into what craft brewers are up against in terms of regulation! The LCBO under the Liquor Control Act and the AGCO under the Liquor Licence Act have vast legislative powers. I repeat vast. It was a shocking and enlightening read.
And then I found subsection 3(1)(e) of the Liquor Control Act. That nasty subsection granting the Beer Store a monopoly, holding back all the goodness the craft brewers are brewing. I decided to launch a niche beer law component to my practice when I read that. This is the main reason craft brewers cannot get their product to market in a reasonable, fair way.
My law practice is Hassell Trial Counsel (www.trialcounsel.ca). Barge Craft Beer’s formal legal name is Barge Craft Beer Distribution & Retail Co. Inc. (www.bargecraftbeer.ca). Hassell Trial Counsel and Barge Craft Beer are separate legal entities. I am the sole owner of Hassell Trial Counsel. I am an owner of Barge Craft Beer together with silent partners who are in the management business.
Barge Craft Beer has a two step business model: 1. Invalidate the Beer Store’s monopoly and 2. Open craft beer stores. It was not created for the lawsuit, it was created to compete with the Beer Store. Hassell Trial Counsel is shouldering most of the work at step one. As you can imagine, business has been slow without a retail beer licence, so there isn’t a whole lot going on at step two. If the AGCO is reading this, I confirm Barge has zero sales.
Barge has a need for a CEO/Bargemaster and staff. Are there any qualified beer CEOs willing to work for equity? Sweat equity that is? Can someone please tell me how many people are employed by the craft beer industry today? Assuming competition increases market share from 4-5% to 10-15%, how many jobs will be created in brewing, distribution and retail combined? We need to let the people of Ontario and Government know.
In terms of timing, the biggest success would be if the Court application adds pressure to the Government to fix things without having to go to Court. If successful in Court, when the Courts invalidate a law, they do not redraft it. They tend to suspend their invalidation and send it back to the Legislature to be redrafted as drafting legislation is up the democratically elected Legislature as opposed to the Courts. Assuming success, the Government will have to tweak the Liquor Control Act and add a new licence into the Liquor Licence Act and have the AGCO get all their forms and paperwork in order. All of this is simple, bureaucratic stuff that is routine for those handling it. They already know what to do because they do it for bars and restaurants and on-site stores.
In sum, if the Government fixes things by passing a Bill, we’ll could see craft beer stores in Ontario by the end of 2015 / early 2016. If the Government balks, Barge will issue its application and we are on a 2-3 year timeline before we’re going to see craft beer stores. Hence the important of rallying everyone now and making sure that the changes the Government has been hinting at happen when they announce the budget. Whatever you need to do, do it now!
Question 6: Are there any details you believe people are missing about the entire situation?
I am deeply concerned that the Government is in negotiations with the Beer Store to try and get enough concessions to appease Ontarians.
Awareness right now is crucial. The Ontario craft brewers have the most at stake and the most to gain. If you’re hoping things are just going to change, you’ve been had.
Rally your troops! Call Steve Beauchesne and ask him about what things would be like if Ontario had a beer revolution. Call Jason Fisher and ask him whether he thinks it’s fair that he can’t open up retail stores but Molson and Labatts can. Ontario needs a beer revolution!
If beer retailing opens up, wine retailing is next. Beer is my drink of choice, but if any wineries or wine retailers want fairness, please call me at 416-944-2274 to discuss.
Separately, I looked into why there is wine at farmer’s markets but not beer. The answer lies in section 3.2 of Regulation 720 under the Liquor Licence Act, which grants VQA wineries an “occasional extension of a winery retail store”.
If you want beer at farmer’s markets, I can draft you a regulation in under 5 minutes. I would copy section 3.2 of Regulation 720 under the Liquor Licence Act and paste it into a blank word document. Then I would use the find and replace function to reword section 3.2 from talking about VQA wine to talking about Ontario craft beer. Then print it. Then ask Premier Wynne to show it to Cabinet to be rubber stamped. That’s right, all you need is Cabinet to make a new regulation. You don’t need to pass a new law. You can definitely have craft beer at farmers markets for the spring/summer of 2015. Maybe add that to the list of demands, but be careful about getting farmers markets but not retail.
I’m really enjoying the Junction’s Brakeman’s Session Ale and Sawdust City’s Lonely Pine IPA. My wonderful wife got me an Ontario craft beer advent calendar. December was a good month. Barge will sell Ontario craft beer advent calendars if common sense prevails. 24 brewers each year, working together.
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