Ontario to start expansion of alcohol sales in convenience and grocery stores this summer

Alcohol sales in Ontario will be enhanced in grocery stores and expanded to convenience stores this summer, a year-and-a-half sooner than expected, following a deal that will see the Ontario government provide The Beer Store up to $225 million for the early rollout.

"We are delivering on our commitment to give consumers in Ontario the choice and convenience every other Canadian enjoys and we’re doing so even sooner than we had originally promised," Premier Doug Ford said in a statement Friday.

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The expansion in grocery stores could begin as soon as Aug. 1, when grocery stores which are already licensed will be allowed to start selling ready-to-drink beverages as well as large-pack sizes of beer.

Convenience stores will then be allowed to start selling beer, cider, wine and ready-to-drink beverages as early as Sept. 5.

As of Oct. 31, all eligible grocery and big box stores will be able to sell beer, cider, wine and ready-to-drink beverages, including large-pack sizes.

"In the coming weeks and months, people in Ontario, like many Canadians across the country, will have the option to responsibly and conveniently purchase a case of beer or a bottle of wine on their way up to the cottage or to a summer barbecue, all while having even more opportunity to support local Ontario breweries and wineries," Ford said.

Province will give The Beer Store up to $225M for early rollout

A master framework agreement signed in 2015 under the previous Liberal government limited the expansion of beer and wine sales in the province and was set to expire in 2025.

The provincial government said Friday that as part of an agreement reached with The Beer Store to expand alcohol sales early, it will reimburse the conglomerate up to $225 million "to make the necessary investments over the next 19 months to support a stable transition to a more open and conventional marketplace."

That will include a one-time initial payment of $22.5 million to make sure The Beer Store has enough funds to cover early implementation costs. It will also cover costs such as purchasing more trucks to deliver to more outlets.

As per a previous agreement, The Beer Store will continue to be the distribution of beer to retailers, bars and restaurants until at least 2031.

As part of the plan, the LCBO will become the exclusive wholesaler of alcohol to all grocery and convenience stores.  A wholesale discount of 10 per cent from the LCBO basic retail price will apply for retailers until 2026.

The government said that the deal will protect jobs across the province and keep The Beer Store locations open for recycling and bottle return.

A number of groups slammed the deal with The Beer Store Friday. The Retail Council of Canada, which represents a number of large grocery chains, said it would be an "understatement" to say they are disappointed.

"What was announced today instead is a sweetheart deal for the big multinational beer companies ABInBev (Labatt) and Molson Coors, which together own 98% of The Beer Store," the group said.

"Opening the tap for the big international brewers starts with a $225 million gift from the taxpayers of Ontario, compounded by pushing the brewing giants’ recycling costs off onto grocers and hence onto Ontario consumers."

Speaking with reporters, Ford denied that the millions of dollars being sent to The Beer Store would go to line its coffers.

"It's not going directly to The Beer Store; where it's going is to make sure that we protect The Beer Store employees to make sure they know they're going to be taken care of," Ford said. "We're going to audit every single penny to make sure it's going in the right place. So it's not going into the big breweries' pockets or anything like that. It's going to the frontline people."

Government says expansion will be responsible

The province says that a more open and competitive marketplace will improve choice and convenience for consumers, as well as support economic growth for local businesses.

Groups like the Ontario Public Health Association have expressed concern in the past about expanding alcohol sales. The group warned last year of "inevitable consequences of illnesses, deaths and social harms to our citizens" which it said would be associated with increased sales and consumption of alcohol in Ontario.

The Centre for Addiction and Mental Health issued a statement Friday calling the province's move "disappointing" and listing off a number of health and social harms associated with the increased availability of alcohol, including addiction, domestic violence and drunk driving.

Ont. Finance Minister Peter Bethlenfalvy said Friday that Ontario‘s approach is "responsible and balanced" and that it "treats Ontario consumers like adults by giving them more choice and convenience."

Retailers will be allowed to sell alcohol below their wholesale costs, but there will still be provincially-set price minimums.

The Alcohol and Gaming Commission (AGCO) of Ontario will continue to be responsible for regulating and licensing retailers to sell alcohol and will be able to take action against infractions in the marketplace.

The province has said that it will also be providing an additional $10 million over five years to support social responsibility and public health efforts around alcohol sales and consumption.

In a release, the government touted the coming changes as the "largest expansion of consumer choice and convenience since the end of prohibition almost 100 years ago" and said they will eventually result in up to 8,500 new stores where consumers can buy alcohol.

It said consumers can also expect to benefit from "competitive retail pricing across all new points of sale and The Beer Store" as part of the new arrangement.

Licence applications from retailers will begin on June 17.

With files from Siobhan Morris