Market with the lower prices of big
Market Structure Assignment The beer industry in Canada is a multi billion dollar industry and is seeing growth every year.
With a 46.7% share in the alcohol industry as a whole the industry generates 5.8 billion dollars in tax money which is distributed between the different branches of government. The beer industry is also supports 163,000 jobs across Canada which is very beneficial to the overall economy in Canada. This Industry is a top heavy Oligopoly as there are a couple big companies with a large market share but there are many small independent breweries with a small percentage of the market share. Despite these great advantages the Canadian government is given by the beer industry there are still issues and ways that it can be improved to further the positive impact it is having on our economy..
Out of the billions of dollars in revenue produced by the beer industry a large portion of it is going to non-domestic corporations as they own 90% of the breweries in Canada. American beer companies such as Budweiser and Coors Light have the biggest market share as they own a combined 25% of the total beer sales in Canada. Molson Canadian and Labatt Blue used to have the biggest share of the market until recently. Sleeman breweries was the largest remaining Canadian owned brewer but was bought Sapporo Breweries a Japanese owned company. In recent years the Canadian beer industry has seen a huge increase in small independent breweries which has caused more of the revenue that comes from the industry to stay in Canada instead of going to foreign companies. Small breweries were recently informed that it is technically illegal for them to sell beer outside of LCBO, the Beer store or licensed restaurants.
This makes it very difficult for smaller breweries to compete as they can’t get their product out in the public at festivals and other events and it is difficult for them to compete with the lower prices of big Brand names.The best possible way to allow smaller breweries to remain competitive and keep more of the revenue produced from such a profitable industry in Canada would be to have a larger tax on the Foreign companies brewing beer in Canada. By doing this it would allow smaller brewers to have competitive prices making it a more popular choice at LCBO and Beer store. I personally don’t believe that they should allow these small independent beer companies to sell outside of the licensed areas as alcohol is still a dangerous thing and it still needs to remain highly regulated by the government. By making these changes to the current beer industry the Canadian government would still receive the at least the same amount of tax money that they are getting and by letting domestically owned breweries have a bigger market share it would keep more money in the Canadian economy.