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Wine, beer, ready-to-drink booze coming sooner to more Ontario stores

Grocery stores and convenience stores will be able to heavily discount — or inflate — the price of alcoholic drinks under new rules coming sooner than expected
Ontario Premier Doug Ford, centre, Vic Fedeli, left, and Todd Smith announce the buck-a-beer plan at Barley Days brewery in Picton, Ont. on Tuesday, Aug. 7, 2018.

EDITOR’S NOTE: This article originally appeared on The Trillium, a Village Media website devoted exclusively to covering provincial politics at Queen’s Park

The Ford government is speeding up its plans to get wine, beer, and ready-to-drink alcoholic beverages into grocery and corner stores.

As of Aug. 1, grocery stores currently licensed to sell beer, cider, or wine will also be able to sell ready-to-drink beverages and offer larger pack sizes. After Sept. 5, eligible convenience stores will be able to sell beer, cider, wine and ready-to-drink alcoholic beverages, and after Oct. 31, all eligible grocery and big-box stores will be able to sell beer, cider, wine and ready-to-drink beverages, including in large pack sizes.

The LCBO will remain the exclusive retailer of spirits.

“When it comes to buying beer, cider, wine, and other alcoholic beverages in Ontario, the response from the public, from stakeholders, from small businesses has been absolutely overwhelmingly positive,” said Premier Doug Ford at a press conference at a gas station in Etobicoke. 

“People are excited that they're going to enjoy the same choice and convenience as other Canadians — and other people right across the world — to buy a case of beer or a bottle of wine on the way up to the cottage.”

When Ford's Progressive Conservatives were first elected in 2018, they’d campaigned on a promise to bring beer and wine to corner stores, grocery stores, and big box stores — but eventually decided to delay that promise until Jan. 1, 2026, when the province's master framework agreement with The Beer Store, which limits where beer can be sold in the province, was to expire. Breaking it early would come with a hefty penalty — reportedly as much as $1 billion — paid to the international consortium of beer companies behind The Beer Store.

But the government announced Friday it's come to a new agreement that will see it pay up to $225 million to The Beer Store, "to protect jobs across the province and to keep The Beer Store locations open for the continued availability of recycling and bottle return." 

A copy of the new agreement shows that cash is meant to compensate the big brewers — Labatt, Molson and Sleeman — for costs related to moving forward before the master framework agreement expires, including covering employee compensation and real estate costs.

The agreement requires The Beer Store to keep 386 retail locations until July 1, 2025, when it can close up to 86 more stores, and close any stores after the agreement expires at the end of 2025. Its role in the container deposits and returns program is expected to continue to at least 2031.

In a statement, The Beer Store said it is planning to “adapt and thrive,” focusing on beer distribution — and building a new “state-of-the-art distribution centre in Bolton” — and on online sales and delivery.

“The Beer Store will be transformed, where our role as primary distributor and recycling steward takes centre stage while maintaining a competitive retail footprint,” said CEO Roy Benin.

Beyond the up to $225 million for The Beer Store, the new deal is expected to cost the provincial government in lost revenue from the LCBO every year — but the civil servants who briefed the media could not give an estimate of the impact. According to the LCBO’s 2022-23 annual report, it paid the government $2.58 billion in dividends that year.

The plan announced Friday will allow retailers — including the giant grocery and big-box chains such as Loblaw and Walmart — to set their own prices for wine, beer, and ready-to-drink alcoholic beverages, either above, or below, the prices at the LCBO, which will remain consistent, as long as they don't go below the regulated minimum prices for different types of alcoholic beverages.

According to draft regulations shared with reporters, customers will be able to buy alcohol with retail stores’ loyalty points.

At least until 2026, retail stores will buy alcoholic drinks from the LCBO at 10-per cent discount from the LCBO's retail prices. Civil servants confirmed the retailers will be able to sell alcohol as a loss leader to get customers into their stores or boost the prices as they choose.

Grocery stores that currently sell beer and wine submitted bids for their licences, including on how low a profit margin they would take, which was limited by the previous Liberal government to between two and 6.9 per cent.

Mike von Massow, a food economist with the University of Guelph, said that grocery stores will be interested in selling alcohol not only for the profits they make from it but also for its ability to get people into their stores and buy more when they’re there.

They gauge their profits based on how much they can make per foot of shelf space and he expects they’ll be happy with the margins they will get selling alcohol at the wholesale price offered by the LCBO.

“If alcohol is moving quickly, then 10 per cent may be great,” he said, adding that there’s no risk of spoilage for alcohol — which helps the bottom line — but on the other hand, alcohol is an attractive product for theft.

Jim Stanford, an economist and director of the Centre for Future Work and vocal critic of Canada’s big grocery chains, was far more blunt.

“It's a giant gift to the grocery chains that are already rolling in money,” he said, adding that they’ve made record profits through the period of inflation. “Allowing these mega businesses the right to sell more liquor in more stores will only increase those profits.”

Stanford said he expects some consumers will end up paying higher prices at convenient locations or when retailers boost prices on long weekends.

“It isn't hard to get beer in Ontario,” Stanford added. “And there's no reason why the government has to sacrifice its own revenues, this $225 million payout, and jeopardize (Ontarians’) health just so that Doug can look more like a friendly guy having a beer down the street. This is the cheapest form of retail politics you can imagine.”

A coalition of health advocacy organizations — including the Canadian Mental Health Association, the Canadian Cancer Society, the Centre for Addiction and Mental Health, Children's Mental Health Ontario, Families for Addiction Recovery, the Registered Nurses' Association of Ontario and Ontario Public Health Association — warned the province that further expansion of alcohol sales will “add strain on an already overstretched health-care system.”

According to the group's statistics, alcohol caused 6,202 deaths, 319,580 hospital admissions and 38,043 years of productive life lost in 2020 alone.

Opposition politicians also slammed the changes.

“ERs are closing, millions of Ontarians are without a family doctor, our shelters are at capacity, yet the Ford government is choosing to spend a quarter of a billion dollars to expedite beer sales,” said NDP leader Marit Stiles. “There’s so much good this money could do for the people in this province.”

Liberal leader Bonnie Crombie accused Ford of “selling off” the LCBO.

“Grocery store billionaires and multinational corporations are the only winners in this latest backroom deal. When will Doug stop spending taxpayer dollars on his corporate friends, and start making life more affordable for Ontarians?” she said.

Green leader Mike Schreiner criticized the government’s priorities.

“The premier is out of touch with the real struggles people are facing. People need the government to fast-track funding for housing affordability and health care instead of giving hundreds of millions of taxpayer dollars to The Beer Store to speed up a timeline they announced just five months ago,” he said.

“While Greens support measures that will increase consumer choice and benefit local alcohol producers, this move should not take precedence over funding to build more homes, increase access to health care or prepare for the climate risks we’re facing this summer.”

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Jessica Smith Cross

About the Author: Jessica Smith Cross

Reporting for Metro newspapers in five Canadian cities, as well as for CTV, the Guelph Mercury and the Turtle Island News. She made the leap to political journalism in 2016...
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