Chris Selley: Ontario liquor retail steps into the present

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Premier Doug Ford promised Ontarians beer in corner stores, supermarkets and big-box stores, and by God he has delivered. As of Sept. 5, all Ontario convenience stores meeting eligibility criteria will be allowed to sell beer, wine, cider and pre-mixed drinks. As of Oct. 31, the privilege will be extended to all grocery and big-box stores. The province says it expects as many as 8,500 new booze-procurement sites to come online under the new regime. By Ontario standards, it’s absolutely revolutionary.

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The new regime is also, of course, hilariously complicated. And absurdly, offensively expensive.

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It is fair to describe the new regime as somewhat more competitive, and certainly more convenient. In addition to offering potentially thousands of new locations, supermarkets (including the roughly 450 already licensed) will be able to offer volume discounts on beer — i.e., a 24-pack will cost less per bottle than a six-pack. This was a privilege hitherto reserved for The Beer Store, the American-, Belgian- and Japanese-owned conglomerate that dominated beer sales in Ontario from the end of Prohibition until fairly recently.

Private retailers will even be able to set their own prices, which until now has been considered blasphemy.

It is not fair to describe the new regime, as the government does, as an “open” market.

Near as I can tell, Ontario will by 2026 have the following retail environments in place:

• The Beer Store. Smelly, surly, and the best-available value. Only beer — no cider or mixed drinks. It’s in the name.
• LCBO locations. Government-run liquor stores retain their near-absolute monopoly on hard liquor sales, in addition to selling beer (especially craft beer, in which The Beer Store’s owners aren’t so interested), wine and everything else.
• LCBO- and/or The Beer Store-branded “agency stores” in rural areas, which sell everything the LCBO does, but operate inside of convenience stores, small supermarkets and other local businesses, and are staffed by non-government employees.
• The existing supermarkets licensed to sell beer, cider and wine (and in rare cases all three!), plus scores of new outlets — the new 8,500 new locations.

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The Beer Store maintains a monopoly (in urban areas) on wholesale for bars and restaurants and on refunding cans and bottles, although its new “master framework agreement” (MFA) doesn’t even oblige it to maintain its current number of locations — which in urban areas have been dwindling rapidly. I’m a 17-minute walk from my nearest Beer Store. The house I grew up in, in the heart of midtown Toronto, is a 45-minute walk. I’m not schlepping a leaky garbage bag full of empty cans either distance.

(Thankfully, as of 2026, larger booze retailers will have to accept empties for return — but there’s really no good reason to wait. Those LCBO-branded agency stores take empties back, no matter how small they are, as do dépanneurs and supermarkets in Quebec.)

The most contentious part of this plan, and rightly so, is that the government is gifting The Beer Store $225 million — ostensibly to speed things up. The province’s MFA with the foreign-owned beer-hemoth, which grants the company all manner of unearned privileges — and would otherwise rule out the reforms Ford’s government desires ― doesn’t expire until Dec. 31, 2025.

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So this is a sort of consolation prize to The Beer Store’s owners, Anheuser-Busch Inbev SA (market capitalization US$159 billion), Molson Coors (US$14.6 billion) and Sapporo Holdings Ltd. (US$3.6 billion).

Some have quite rightly asked: Is it really worth $225 million not to have to wait another 18 months?

The answer is absolutely not. It’s grotesque.

What the government should have done was simply cancel the existing MFA with The Beer Store via legislation, on the grounds it was a product of rank political corruption. (In fact it said it would do this, but legislation to that effect was never enacted.)

The beer lobby haunts the dreams of Queen’s Park staffers the way the dairy lobby haunts the dreams of Parliament Hill staffers. In 2014, the Toronto Star’s Martin Regg Cohn reported that “the Speaker of the Legislature (had been) unceremoniously summoned to the Premier’s Office several years ago by a top staffer, where a Labatt operative was waiting to lecture him about the serving of rival craft beer on the premises.”

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Alternatively, the government could just have framed the $225-million bonus as a fair-and-square penalty for early termination of the MFA.

Instead, from a free-marketer’s standpoint, it twisted the knife: The payout is ostensibly to help the mega-brewers “make the necessary investments over the next 19 months to support a stable transition to a more open and convenient marketplace, including funding to protect jobs across the province and to keep The Beer Store locations open for the continued availability of recycling and bottle return.”

It’s the world we live in, I suppose. We have infinity bazillion dollars for electric-vehicle battery plants, even when it works out to $500,000 or $1 million per job. Why shouldn’t The Beer Store benefit as well? It’s just that I seem to recall a guy campaigning for the Ontario Progressive Conservative party leadership on a promise of no more corporate welfare. Ford was his name.

Ontario’s beer market needs to be set free, not constrained under a whole new byzantine set of rules. But it is, undeniably, progress of a sort.

National Post
cselley@postmedia.com

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