Fort Garry Brewing lowers prices
Local brewery moves into discount market
Andrew Sain Staff
Cheap beer is flowing in Manitoba as a result of a price war started when Minhas Creek Brewing Company entered the market.
To reclaim its share of the market, Manitoba’s largest brewer, Fort Garry Brewing Company, announced that it will be entering the discount beer market, with a new “discount package” intended to make the company more competitive, according to president Doug Saville.
The new discount package will be the same Two Rivers lager product, packaged in 600 ml plastic bottles, and will retail at an individual price of $1.66 per bottle. In comparison, a 355 ml can of Minhas Creek retails for approximately $1.
“Since Minhas [brewing company] came into this province in December 2004, [sales of] canned beer, especially discount canned beer, have skyrocketed, because most of the large brewers in the country are not going to allow . . . Minhas to take over a . . . huge discount beer market,” said Saville.
Other brewers followed suit, and now, said Saville, the market is flooded with cheap product — meaning Fort Garry had no choice but to compete.
“The only thing that Fort Garry can do is have a discount package of its own,” he said.
Since the introduction of Minhas Creek, the Manitoba beer market has changed drastically, according to Manjit Minhas, president of Minhas Creek.
“Before we entered the market, all beers in the market were very high priced . . . I created a whole new discount category in the marketplace . . . I’ve created it and now it’s thriving,” she said.
Saville said that Fort Garry’s discount product is being sold approximately at cost.
“We need to employ Manitobans; we have a brewery here in this province and in order to keep it alive we have to do this. . . . Hopefully saner heads will prevail and the price will go up to where a brewer can make some money on this stuff, because we all agree we’re not making any money, but they all sell beer at cost or lower.”
According to Minhas, competition is part of the Minhas Creek business plan.
“I can compete with [large brewers] and anyone else in the marketplace because I have very low overhead costs. I won’t pay myself $5 million . . . so my costs are lower and, more importantly, I am satisfied with less. I make very little on each case that I sell . . . my strategy is high volume, low margin.”
Adam Taplin, an employee at the Quality Inn beer vendor on Pembina, said that a large percentage of their total sales comes from discount beers, something which he describes as “kind of sad.”
“Honestly, I think it’s stupid . . . this [discount] beer thing, because it encourages people to drink more,” he said.
Minhas disagrees with the notion of imposing minimum pricing on beer at vendors.
“I don’t agree with minimum price because I think that it encourages government involvement to the point of ridiculousness. I think that this is a free-market economy and us as a brewer should be able to decide how much we want to sell our beer [for]. . . . It should be up to the customer as to what they want to choose.”
Saville disagrees with government involvement as well.
“I don’t like controls. I don’t like putting that kind of stuff in place, but I think we all can agree that the cheaper alcoholic beverages are, the more people consume. Not all [people], granted, but some. I’m not an advocate of putting in [minimum] pricing, but there are lots of minimums put in place already that don’t make much sense either, so maybe that’s the way to go,” he said.
Taplin doesn’t expect the new plastic bottles to affect sales of Two Rivers lager.
Saville said that perhaps consumers will prefer the new packaging to cans, though he pointed out that plastic bottles shorten the storage life of beer.
Two Rivers lager will be available only as single-serving bottles. According to Saville, this is because it is necessary to compete in the single-serving market as well as to avoid the cost of packaging the bottles into cases.
