Sale of Quebec spirits at the SAQ | The end of the “open bar”

The days of the “open bar” for Quebec spirits at the Société des alcools du Québec (SAQ) are now over. With a saturated supply and declining sales, the state-owned company wants to “clean up” by tightening its rules and removing more than a hundred products currently offered in branches from the shelves.

“Having a tenth lemon-flavored gin is perhaps no longer necessary,” explained Sandrine Bourlet, vice-president, marketing, of the SAQ, during an interview with The Press.

This decision, which could lead to the death of certain companies, was nevertheless taken in concert with the Union québécoise des microdistilleries (UQMD). The association considers it necessary for the rules of the game to change.

Of the 630 Quebec spirits currently offered at the SAQ, between 150 and 200 will disappear from the shelves over the next year. “(Which will) free up space, around 15% of the space on our shelves, to put the good players in the category”, maintains M^me Bourlet.

In five years, microdistilleries have mushroomed across Quebec, going from 10 to around 70. “For the past five, six years, we have experienced great sales growth and great growth in the category,” she assures.

At the time, the Crown corporation was determined to offer a chance to all local distillers to see their gin or maple brandy get its place in the sun.

However, in the face of an increased supply and diminishing enthusiasm, sales in this category have seen a drop of 5% this year compared to last year.

Currently, a third of Quebec spirits offered in tablets generate barely 5% of sales in the category, which is very little in the eyes of the vice-president, marketing. “Within a year, we want to eliminate these products which only make 5% of sales. »

“We can clearly see that there is a lack of interest, the momentum of local purchasing has diminished. There is an expression we use in supply management which says that too much choice kills choice. We must act to tighten supply, adds M^me Bourlet. (We must) ensure that now there will be rules for the entry and exit of products. We no longer accept everyone. »

Although the guidelines have not yet been determined, she emphasizes that the spirits which will enter the branches will be the most “efficient”. “Perhaps we will say that a gin, to remain on the SAQ shelves, must bring variety to the repertoire, must have sales velocity. We will base ourselves on customer data with the Inspire program. »

Discussions will take place in the summer with UQMD, which represents more than fifty microdistilleries. While she recognizes that this decision risks causing discontent among certain producers, Ms.^me Bourlet nevertheless mentions that “it is not the SAQ which should bear the weight of this market”.

“Products that did not sell could take the place of a product that was sought after by customers,” she insisted.

For the survival of the industry

At UQMD, President Joël Pelletier assures that the changes announced by the SAQ were necessary to ensure the viability of the industry. “It was an open bar,” he says bluntly. There are suppliers who took advantage of the situation to submit products in phenomenal quantities. Some had up to 30, even 40 SKUs, and they didn’t necessarily perform well on tablets. It was getting difficult for everyone. It had become chaotic. The worst scenario was to do nothing,” says the man who is also co-owner of the Distillerie du St. Laurent, in Rimouski.

He also admits that this dusting of shelves could make some distillers cringe, but this is a “minority”, according to him.

In recent months, the Champ Gauche distillery, in Saint-Arsène, in Bas-Saint-Laurent, and La Chaufferie, in Granby, announced their closure. Mr. Pelletier also points out that others have ceased production for the moment and some, like the Distillerie du St. Laurent, are negotiating with their creditors “to try to get out of it”.

In this context, a system where all products obtained a place at the SAQ “by default” was no longer viable, he repeats.

Mr. Pelletier, who distributes his gin and whiskey in the branches of the state company, is aware that the tightening of the rules could cause some of his bottles currently on sale at the SAQ to disappear. “Some of our products may be withdrawn because they are not performing well enough. This is exactly what I expect from my distributor.

“The problem is that the products which are in demand, therefore the products which are the most efficient, are no longer able to find their way to consumers. There is too big an offer. Space is not infinite. »

In Portneuf, the co-owner of the Ubald distillery, Pascale Vaillancourt, says she “understands” the SAQ’s decision. Of the 11 products she sells there, some risk falling by the wayside since they have more difficulty finding buyers.

According to M^me Vaillancourt, the problem currently lies in the fact that distillers can only sell to the SAQ. She would like producers to be able to diversify their distribution network by doing business, for example, with grocery stores or directly with restaurateurs.

The results of a survey published Tuesday by the Canadian Federation of Independent Business (CFIB) tend to support his statements. According to the survey, “72% of SME owners believe that private retailers should be able to sell the same alcoholic products as the SAQ.”

“Each distillery that dies,” continues Pascale Vaillancourt, “is a wealth that is lost in our regions. »