Hacked almost three weeks ago, The Beer Store still can’t track inventory and many outlets will only accept cash

Almost three weeks after a virus unleashed by hackers tore through its computer systems, The Beer Store is still struggling to get back to normal.

More than half of its stores can only accept cash, an online inventory system is still down, and breweries are calling stores one by one to see if they need deliveries. Online ordering for customers is still unavailable and for more than 10 days, breweries weren't even getting paid for the beer they delivered to TBS.

It's left breweries frustrated, customers and staff worried about handling cash, and retail experts puzzled that it would take so long to fix a systems problem.

"After we got the initial email telling us about the virus, I don't think anyone thought we'd still be dealing with this three weeks later," said Todd Lewin, president of Muskoka Brewery.

TBS spokesperson Bill Walker said the company is still repairing the damage.

"We have the best experts working on it and we have kept all of our stakeholders up to date on what's happening," said Walker in an email to the Star.

Three different industry sources told the Star that part of what's taking so long is that hard drives from computers at every single TBS store have to be removed to make sure the virus doesn't reproduce the second the system is brought back online.

Muskoka Brewery, like other breweries who deal with TBS and its warehouse, usually gets an inventory email a few times a week regarding how much of each product is needed. Now, the breweries have to call each of TBS's 450 locations and ask what they need.

"We're flying blind, because we don't really know what our inventory levels are like at their warehouse," said Lewin.

The systems problems, caused by what industry insiders say was a ransomware attack, also hit TBS's system which allows it to pay brewers daily for the inventory.

"We finally got a cheque last week, but there was about 10 days where we got nothing. And that was at a time when most restaurants and bars were closed except for takeout, so we weren't selling draft. It was not ideal timing," said Lewin, adding he feels some sympathy for The Beer Store, too.

"I know they've been trying hard to get things up and running. But this is a time when people are buying bigger amounts. A couple of 2-4s instead of a six-pack. So The Beer Store was finally starting to see a bit of an upswing, and then this hits," said Lewin.

If there's been a silver lining, it's that home delivery for some breweries has been getting a boost, whether because of TBS's woes or people just not wanting to go out, it's hard to tell.

"Home delivery's really taken off. We're doing 400 or 500 orders a day. And people are getting two cases, where ordinarily they might only get one if they come into our retail store," said Troy Burtch, marketing and communications manager for Etobicoke's Great Lakes Brewery.

But paying cash has proven frustrating for customers who not only have to think about the risk of getting COVID-19 from possibly contaminated money, customer Charles Robinson also had the extra cost of using a bank machine to access cash.

"This is totally unacceptable. I had to find a bank machine and pay an extra $5 fee to get cash to buy a case of beer," said Robinson.

One worker at a downtown TBS location said the increased risk of catching COVID-19 from handling cash is one more bit of stress he doesn't need.

"I'm dealing with a couple hundred people a day. Being anywhere in retail is dangerous enough right now, and now we have to deal with cash? Come on," said the worker, shaking his head in disgust.

Veteran retail analyst Lisa Hutcheson said that while there are attempted hacks on retailers' computer systems fairly regularly, it's surprising to see TBS struggling to deal with this one for so long.

"Three weeks is a really surprising amount of time for systems to be down," said Hutcheson, managing partner at retail consultancy J.C. Williams Group.

"In retail, knowing what product to have where and in what quantities is the secret sauce. Not having exact visibility over your inventory is really tough," Hutcheson said.

And the idea of handling cash is possibly scaring some customers off in the time of COVID-19.

"This is not a time when people want to be buying things with cash," Hutcheson said.

The hack is only the latest trouble for TBS, which once accounted for 90 per cent of all beer sold in Ontario but has seen its share slip to 63 per cent, as governments opened up sales to grocery stores and soon, corner stores.

Earlier this year, TBS told its owners there was an "unexpected" $13.1 million cash flow shortfall in 2019.

Molson Coors and Labatt each own roughly half of TBS, with Sleeman Breweries owning a small percentage. In 2016 under pressure from the provincial government, TBS offered independent craft breweries "ownership" stakes without financial obligations, as well as a place on the board.