While most people get chocolate in their Advent calendars, Toronto lawyer Michael Hassell’s was full of 25 beers.
It’s perhaps not surprising given that he’s the lawyer trying to take on the Beer Store through a legal challenge he announced last week. A co-owner of Barge Craft Beer Distribution and Retail Co. Ltd., he’s a lawyer who practises civil litigation and commercial defence who has also started up what he calls a “beer law niche practice” focused on advising craft brewers on regulatory issues and, since the issue of what to do with the Beer Store exploded into Ontario’s political consciousness in recent months, breaking up its dominant position in the market and the legal framework that allows for it.
Hassell, a 34-year-old graduate of Western Law who has been practising law since 2008, says his passion for beer itself dates back to good memories of hanging out with friends in high school. “There’s such a great social aspect to having a beer,” he says. But his passion for beer law is a bit more recent. One of his favourite beers was Creemore Springs, a smaller brewery bought up by Molson Coors Brewing Co. in 2005. Hassell was sad to see the acquisition of his favourite brewer, and when he realized the brewing behemoth also owned the Beer Store, he became more aware of just what the business environment for beer in Ontario was all about. “I didn’t realize it was this single private company getting untold millions of dollars,” he says of the retail environment for beer in Ontario. Like many people, he had the vague idea that the government had some sort of stake in the Beer Store or that the profits somehow flowed back to the province. But with the media, notably the
Toronto Star, having started to question the current arrangement in recent months, people have become much more aware of the Beer Store’s ownership by the brewing giants, the limitations on beer sales at the LCBO, and the industry’s warm relationship with Ontario’s political parties.
In the meantime, Hassell has started up Barge Craft Beer Distribution and Retail, a company he admits has no sales. Of course, the law restricts most beer sales in Ontario to the Beer Store, so doing what his company’s name suggests isn’t really an option. While the LCBO is an alternative for the craft brewers themselves, Hassell says it has limited shelf space for craft beer. The goal of his company is to have 100 Barge Craft Beer outlets open within a year of the end of any change to the current legal framework. “When Year 1 will be is a question mark,” he says. His notice last week put the province on notice that he would be bringing a legal challenge to s. 3(e) of the Liquor Control Act that grants Brewers Retail Inc. monopoly status as the only private company able to sell beer to the public without brewing it. The draft notice calls it “an unreasonable restraint of trade, contrary to equitable principles of fairness and contrary to public policy.”
With more light shone on the issue and the government seeking to impose a franchise or licensing fee on the Beer Store of up to $100 million — Hassell calls it a “monopoly fee” — the Beer Store recently made some concessions to Ontario’s craft brewers, including making it easier for them to sell their products at the five locations closest to their breweries. But Hassell says the Beer Store’s listing fees remain “prohibitively high” and notes he wouldn’t be happy if the province were simply to wrestle more money for its own coffers from the existing arrangement. “That’s still just totally unfair to Barge because it means zero sales,” he says.
The goal, then, is to loosen the rules on beer retailing and distribution and Hassell says he’ll be officially launching his challenge once he sees what the province does on the issue in its upcoming budget. “If the government says it will end the monopoly, then the application is effectively solved,” he says.
Hassell, who professes a love of India pale ales and stouts, says he also has more legal options in the works and is vowing to continue the fight. “It’s going to be fun,” he says.
Update Jan. 27: Michael Hassell dropped his challenge after obtaining “an external and expert legal opinion” gauging his chances. “The Court application has a low chance of success and would be extremely expensive,” Hassell said in a statement on his website.
