Amid a tough stretch for the industry, local craft brewers say the province’s decision to allow sales of beer, wine, cider and ready-to-drink cocktails in convenience stores and all grocery stores in Ontario by 2026 is worthy of a toast.
“Additional sales channels mean additional ways to get products into the hands of our consumers,” Rob McIsaac, co-owner of Ottawa’s Beyond the Pale Brewing, said Thursday after Premier Doug Ford announced the changes at a news conference in Toronto.
“Every dog has its day. It’s nice to see one come through for the (craft) breweries.”
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Ford first promised the expansion eight years ago. It marks some of the biggest changes in alcohol sales in the history of the province, making Ontario just the second jurisdiction in Canada – after Quebec – to offer beer in corner stores and the first to offer ready-to-drink cocktails in those locations, government officials said.
The expanded marketplace will give people more choice, convenience and time, Ford said.
“We’ve got to start treating people like adults here in the province,” he said at a press conference.
“Folks, we all have busy lives, so just imagine on a Friday night in December, instead of being stuck in a long lineup at the LCBO, you’ll be able to pop into your local convenience store before heading out to the holiday party.”
The move would fulfil a promise Ford made during the 2018 election and marks the second attempt the premier has made to put beer and wine in corner stores, previously passing but not enacting legislation to cancel an agreement with the Beer Store.
That agreement saw sales of beer and wine expanded to a maximum of 450 grocery stores across the province, with the Beer Store retaining exclusive rights to sell 12- and 24-packs of beer, and Ontario is announcing today that deal and those terms will end in 2025.
Under Ford’s plan, eligible retail outlets across the province, including an estimated 6,700 convenience stores and another 1,800 grocery stores, will be able to set their own pricing. Right now, all retail outlets have to adhere to pricing set by the Liquor Control Board of Ontario.
Officials say certain amounts of shelf space will have to be dedicated to small beer and wine producers. Current requirements for grocery stores are that 40 per cent of shelf space for wine must be for small wineries and 20 per cent of beer and cider space must be for small breweries and cideries.
That comes as welcome news to Paul Meek, the owner of Ottawa’s Kichesippi Beer Co.
“That was the big thing that we wanted to hear today,” Meek told OBJ. “It’s one thing to bring more convenience, but we want to make sure that they’re protecting Ontario jobs.”
Meek, whose brewery employs about 20 people, said he’s optimistic the changes will open up new sales channels for smaller players in the industry.
“It can go one of two ways – (it could) spread the existing sales out to more distribution points, which will only increase our costs and not our sales,” he said.
“The more positive and hopeful outlook on the situation is that if our beer is in more locations, then hopefully more people are seeing it and giving us a try for the first time and hopefully becoming repeat customers. That’s what we’re counting on, for sure.”
Still, Meek said finding distributors to deliver bottles and cans to more shelves could be a “significant challenge” for some microbreweries.
“If I’m a distribution company, I’m probably very happy today,” he said. “There are definitely going to be (businesses) like our company looking for distribution support, because the last thing a Walmart wants is me going in through the back door dropping off 10 cases of beer. That’s just not going to happen.”
McIsaac agreed, but noted that craft breweries have a bit of a runway to figure things out.
“It’s definitely going to add a wrinkle, but .. I’d much rather figure out how to get the beer to the people we need to get beer to and have the additional sales channels available to us.”
As part of the alcohol sales modernization, the government announced Thursday that it will introduce legislation to eliminate a 6.1 per cent basic tax on all on-site retail sales of 100 per cent Ontario wines, a move the industry has long urged.
Josh McJannett, co-founder of east-end beer-maker Dominion City Brewing, said he’s heartened that the government has also pledged to look at easing the tax burden on craft brewers.
“This is something our industry has been asking for for a long time,” McJannett said. “We pay the highest beer tax rates out of any jurisdiction in the country. It’s having a really negative effect on the viability of some of these businesses.”
He said taxation is just one issue for an industry that has taken a beating over the past few years amid soaring inflation and changing consumer attitudes toward alcohol.
Revenues at Dominion City, which brews about a half a million litres of beer annually, are “slightly above flat” compared with 2022, McJannett said, while province-wide sales of craft beer are down seven per cent from last year.
“It’s been super hard,” he said. “There have been so many changes to where people are going and what they’re looking for, any business would find their head spinning right now just to make a go of it. We’ve had to rebuild the plane in flight a couple of times over the last few years.”
Ontario’s new agreement with the Beer Store will see it retain a “primary” role in beer distribution and run its recycling program for five years.
No commitments have been made beyond the five-year term of the new deal, officials said.
The Beer Store said the company looks forward to the next stage in its evolution.
“The agreement acknowledges the important role The Beer Store plays in the responsible sale of beer and ensures it will be able to continue its environmental stewardship for years to come through its recycling program and the Ontario Deposit Return Program,” the Beer Store wrote in a statement.
The new system is set to be up and running “no later than” Jan. 1, 2026, the same year Ontario voters will next head to the polls for a provincial election.
By then, Ontario would have the third-highest density of alcohol retail stores in Canada, up from its current lowest position.
The government will boost “social responsibility and public health efforts” by $10 million over the five years, it said.
Ontario’s auditor general said in a report this month that government officials have not consulted Public Health Ontario on the implications of the expansion of alcohol sales in recent years. Finance Minister Peter Bethlenfalvy said he was “pretty sure” Public Health Ontario was consulted on this move.
Brian Patterson, president and CEO of the Ontario Safety League, took issue with the premier’s assertion that it is time to start treating Ontarians like adults.
“We treat people like adults right now and we still have impaired drivers every night,” he said.
“I’ve been to hundreds of crash scenes where young people have taken a vehicle and killed unsuspecting partners. It’s not a question of ‘is everybody completely responsible?’ We have to protect against those that are likely to put us at risk.”
The Canadian Mental Health Association’s Ontario division urged caution in the rollout.
“Increasing availability to alcohol is in direct contradiction to a public health approach to substance use,” CEO Camille Quenneville wrote in a statement.
“Without clearly outlined goals, strategies and sufficient funding to reduce alcohol-related harms, this retail expansion will put additional strain on an already overloaded community mental health and addictions system.”
The Canadian Centre on Substance Use and Addiction, funded by Health Canada, said in a report this year that consuming more than two drinks per week constitutes a moderate health risk due to evidence linking alcohol to cancer.
Staff training and the current standard hours of sale – from 7 a.m. to 11 p.m. – will be required in the new retail outlets, officials said. The Convenience Industry Council of Canada noted its stores already sell age-restricted products such as tobacco and lottery tickets.
The NDP suggested the timing of Ford’s announcement was to buy his government some goodwill to cap off an otherwise difficult year.
“(It) comes at the end of a chaotic year in which Ontario’s corrupt Conservatives reversed many of their major policy announcements; saw the loss of four cabinet ministers; received blistering reports from the Auditor General, Integrity Commissioner and Ombudsman; and find themselves under criminal investigation by the RCMP,” the party said in a statement.
– With additional reporting from the Canadian Press
