Changes may soon be coming to how booze is sold in Ontario. Here's what some in the industry are hoping to see

Big changes could soon be on the horizon for Ontario’s alcohol retail landscape, with the premier signaling Friday that he plans to move ahead with his promise to provide more “convenience and selection” across the province.

In the coming weeks, the province must confirm whether it intends to renew its Master Framework Agreement, a 10-year deal signed in 2015 that governs how alcohol can be sold in Ontario.

As part of the MFA, the foreign-owned Beer Store was given the exclusive rights to sell beer in 12 and 24-packs. It also prevented convenience stores in the province from being able to sell alcohol.

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A source confirmed to CP24.com that the province will not be renewing the MFA in its current form and as part of the agreement, the province must notify stakeholders two years in advance. Since the deal is set to expire in 2026, the province has until the end of this year to announce its plan for the future of alcohol sales in Ontario.

On Friday, Premier Doug Ford remained tight lipped about what will become of the Beer Store if the Master Framework Agreement (MFA) is scrapped but said the company will still “play an important role in the whole system” going forward.

The premier also reaffirmed his long-stated commitment to expand alcohol sales in the province, a promise he was unable to fulfill back in 2019 when he first vowed to bring booze to corner stores.

“We are going to keep our promise to make sure that we have convenience and selection across the province like you see across the entire world,” Ford said at an unrelated news conference on Friday morning.

“But we want to be fair and we are going to be continuing to negotiate with the Beer Store.”

Shortly after Ford took office, his government tried to axe the deal with the Beer Store but backed down after it came to light that it would likely cost the province hundreds of millions of dollars to break the contract.

With the expiry of the agreement, the Ford government will now be able to chart a new path for alcohol sales in the province and an announcement is expected in the next few weeks.

Negotiations have been ongoing for months with those impacted by the decision, including the Beer Store. Those who spoke to CP24.com this week confirmed that they have signed non-disclosure agreements and are not permitted to discuss details of the negotiations.

Two of the biggest stakeholders, the LCBO and the Beer Store, did provide a comment to CP24.com for this story.

In a statement, Emily Hogeveen, a spokesperson for Ontario’s minister of finance, said the government “supports meaningful change to alcohol sales” in the province.

“Ontario has made significant progress towards expanding choice and convenience of alcohol – from expanding the sale of beverage alcohol to hundreds of new points of sale across Ontario to permanently allowing more than 18,000 restaurants and bars to include alcohol with food as part of a takeout and delivery order,” the statement read.

“This is one of many priorities for the government and we look forward to continuing to deliver choice to Ontarians and new opportunities for businesses.”

Retail strategist and consultant Lisa Hutcheson said if the province opens up alcohol sales to convenience stores and lifts restrictions on grocery stores and big box retailers, it could mean the end of the Beer Store.

“It is a very dated model,” she told CP24.com in an interview on Friday. “It has only got one product offering.”

She said consumers are increasingly looking for a “one-stop shopping” experience. While the Beer Store operates more than 400 locations across Ontario, the stores are not always in convenient locations, especially for those who live in large, urban centres like Toronto, she said.

“I think it is good to give the customer choice versus making them go to a specific location,” Hutcheson said.

While the end of the MFA raises questions about the future of the Beer Store, it opens up new possibilities for others who operate in Ontario’s alcohol retail landscape.

'A lot of moving parts'

Dave Bryans, the CEO of the Ontario Convenience Stores Association, told CP24.com that after 15 years advocating to “open the market,” the “file is moving forward.”

“It is a very complicated file because if it is a major change, there is a lot moving parts to it. And there will be a lot of moving parts after, from recycling, distribution, who gets it first, what does rollout look like,” Bryans said in an interview with CP24.com on Thursday.

“There is a lot of challenges for the government because everybody and their brother is screaming at them, ‘Me, me, me,’ from wine to liquor to cider to you name it.”

He said permitting beer and ready-to-drink (RTD) beverages in corner stores would be a major win for convenience stores in the province, many of which are family-owned.

“The time has come to bring us into the real world like everybody else in North America,” Bryans said.

He added that he hopes to see some period of transition to allow for stores to prepare.

“You can’t on the last day on the MFA have beer in convenience stores. You have to have some agreement with beer companies to start putting beer in convenience stores at a much earlier time and phase it in because it is going to take a little while to get it into 8,500 stores,” he said.

Bryans noted that he does not want to see the rollout begin with a “national gas chain,” as the majority of convenience stores in the province are independently owned.

“That would be so unfair to those hardworking families throughout Ontario,” he said.

Improvements needed to retail structure, craft brewers say

Craft brewers in Ontario say changes to the alcohol retail system are “long overdue.”

“Craft Brewers support the government’s commitment to expand access to local craft beer,” Scott Simmons, president of Ontario Craft Brewers, said in a written statement sent to CP24.com.

“Improving the retail structure is only one side of the discussion and it is critically important the government lower the beer tax rates Ontario craft brewers pay, which are currently the highest in all of Canada.”

He said they are calling for the province to immediately eliminate the 9 cent beer can tax and lower beer tax rates to bring them in line with other provinces, including Alberta and British Columbia.

“(That) would be a game changer for breweries and ensure that craft beer made locally by Ontario producers can thrive in the existing and expanded retail channels,” the statement concluded.

Additionally, craft breweries in Ontario can only have two retail outlets and they must be connected to a production facility. Small wineries also face restrictive policies under the current rules. Each winery is only permitted to have one retail outlet and that too must be located where the wine is made.

Expansion could put local wine industry 'at risk,' report says

A Deloitte report jointly commissioned by Ontario Craft Wineries, which represents small Ontario wineries, and Wine Growers Ontario, which represents large wineries, said the future of the local wine industry “could potentially be at risk due to expansion plans from the Government.”

The report, which was published this past summer, noted that the Winery Retail Stores (WRS) system is a “critical component” of the local wine industry, “providing Ontario-based wineries with the right to sell their products in tightly regulated, private retail locations.”

“The WRS network has 292 total distribution points and is protected by the MFA and international trade agreements,” the report read.

“Grocery and convenience store industries are seeking to end protections for WRS stores when the MFA expires on January 1st, 2026.”

It said that the loss of the WRS distribution channel “would have a significant negative economic impact on the local wine industry.”

Like Ontario craft brewers, high taxes have also been a sticking point for wineries in the province.

Earlier this fall, a private member's bill by NDP MPP Wayne Gates called for the elimination of the 6.1-per-cent basic tax on all on-site retail sales of 100 per cent Ontario wines.

The Deliotte report noted that the province's wineries are taxed at a rate "not seen in any other wine-producing nation."

MFA was 'never about choice,' Retail Council of Canada say

Michelle Wasylyshen, a spokesperson for the Retail Council of Canada (RCC), whose board of directors includes executives from major retail chains such as Sobeys, Metro, Loblaw, Costco, and Walmart, said they are looking for the province to “broadly open up the system.”

“The MFA has never been about choice, convenience or prices for customers; it has always been about serving the interests of the big brewing conglomerates and that’s what needs to be addressed with the end of the MFA,” she said in a statement.

“Grocers in Ontario have a strong record of success in bringing craft beers and VQA wines to market.”

Speaking to CP24.com on Thursday, Wasylyshen said there are number of changes the RCC would like to see.

“We are looking for the Ontario government to broadly open up the system. That means having no cap on the number of locations and no restrictions based on the retail type of store,” she said.

She added that stores want the ability to sell beer in larger formats, as current rules limit them to selling single servings or six-packs.

“Convenience stores, they are going to compete on location and obviously convenience, where a mass merchant, or a retailer, they compete on price and volume so we want the ability to sell larger formats,” Wasylyshen said, adding that retailers also want to be able to sell RTDs.

RTDs are currently only available for purchase at the LCBO.

In her statement, Wasylyshen said a more open system would mean lower prices for consumers,

“This is the case in Quebec where direct negotiation between grocers and brewers is already allowed,” she said.

Model for recycling remains unclear

Another major issue the province must sort out as it negotiates changes to the alcohol retail landscape is recycling.

The Beer Store is currently responsible for accepting all empty containers under the Ontario Deposit Return Program.

Hutcheson said if larger retailers were to adopt a recycling program, it could present a “good opportunity” to get customers in the door.

“They have the footprint,” Hutcheson said.

“I think more people would use the recycling program if it was more accessible and I think it would be a good opportunity for other retailers to look at it as a way… to attract customers.”

Health experts concerned about alcohol in corner stores

Earlier this year, The Ontario Public Health Association (OPHA) spoke out about the possible harms associated with expanding access points to alcohol.

In a letter released in May, the group outlined the “inevitable consequences of illnesses, deaths and social harms to our citizens that will follow with increased sales and consumption of alcohol in Ontario.”

“There's lots and lots of research that tells us that as consumption of alcohol goes up, there are so many related harms that could happen,” John Atkinson, the OHPA’s executive director, said in an interview with CTV News Toronto in July.

“These kinds of harms include everything from increases in chronic disease like cancer, because alcohol is a known carcinogen, [and] increases in streets and domestic violence, road crashes, thefts.”

The Centre for Addiction and Mental Health has expressed similar concerns.

When asked Friday if the issues flagged by these organizations gives him pause, Ford replied, “Not at all.”

“I respect the work that they do and they do really good work but listen we are the only jurisdiction in the entire world where you can’t go into the retail store and buy a case of beer or a bottle a wine when you are buying a steak for dinner or whatever you are buying,” the premier continued.

“It just doesn’t make sense so we are moving forward with this.”