Ontario's Regulation of Sale of Wine in Grocery Stores
Moving forward on the government's commitment to increase convenience and choice for consumers, starting in fall 2016, 70 grocery stores will be authorized to sell wine, beer and cider. This is in addition to the 60 grocery stores already selling beer.
To provide consistency for business and build on a strong foundation of social responsibility requirements, the procedures for wine sales are consistent with those established for beer sales in grocery stores. The approach demonstrates the government's commitment to fairness, helping small businesses thrive, and socially responsible retailing.
Request for Bids and Authorization Process
To be eligible to sell wine, beer and cider, grocery stores must meet a number of characteristics including:
- Selling a full line of food products
- Having a minimum of 10,000 square feet of retail space occupied by food products
- Not primarily considered a pharmacy
To help get the best value for Ontarians, this is a competitive process. Grocers interested in being authorized to sell wine, beer and cider will review the request for bids at biddingo.com and submit bids to the LCBO. Grocers will bid their margin rate on sales, between 2.00 and 6.99 per cent.
To promote even competition:
- Authorizations are distributed fairly across geographic regions
- A minimum of 18 authorizations (25 per cent) are reserved for small grocers (under $1 billion worldwide revenue). This is an increase over those reserved for small businesses for beer authorizations
- A single grocer can win only a maximum of 40 per cent of authorizations by type per region
Successful bidders will submit individual store locations for authorization to the Alcohol and Gaming Commission of Ontario (AGCO). Once authorized by AGCO, grocers will enter into a wholesale supply agreement with the LCBO. The LCBO will be the sole supplier of wine, beer and cider to grocery stores.
Helping Small Producers Thrive
Wine sales will be introduced to grocery stores incrementally and with shelf space requirements for small producers, mitigating disruption to the market and ensuring fairness.
The following shelf space requirements will apply to all wine authorizations after three years, and 35 authorizations to start:
- 50 per cent of wine shelf space will be dedicated to single-origin wines from small wineries, small wine-producing countries or small appellation of origin systems
- A minimum of 20 per cent of that shelf space will be reserved for small wineries from anywhere in the world
For three years, half of the 70 authorizations will sell only single-origin wines made by small- to mid-sized producers:
- Wine produced by small wineries from anywhere in the world, or wine from small appellation of origin systems produced by small- to mid-sized wineries.
- A minimum of 20 per cent of total shelf space will be dedicated to small wineries
- Single-origin wine: produced entirely with content from a single country
- Appellation of origin: a legally defined and protected geographical identification of where grapes used to make wine are grown
- Small appellation of origin system: annual production less than 50 million litres in aggregate
- Small wine-producing country: annual production less than 150 million litres in aggregate
- Mid-sized winery: total annual worldwide sales less than 4.5 million litres
- Small winery: total annual worldwide sales less than 200,000 litres
Expanding Access Responsibly
Ontario is making these improvements while maintaining a strong commitment to social responsibility.
Ontario has updated the regulation to allow wine to be sold in grocery stores, including social responsibility requirements:
- The sale of wine, beer and cider adheres to standard hours
- Limitations to alcohol by volume - 7.1 per cent for beer and cider, 18 per cent for wine
- Beer and cider will be sold in a six -pack or less or up to 750 mL per container
- Wine will be sold in maximum four-litre containers
- Staff selling and handling alcohol must be a minimum of 18 years of age
- Staff must be fully trained on Ontario's standards for social responsibility, including making sure customers under the age of 19 and intoxicated adults do not purchase alcohol
The AGCO continues to monitor compliance with these regulations.
Ontario has uniform pricing for alcohol, meaning consumers pay the same retail price for the same product at grocery stores, the LCBO, the Beer Store and winery retail stores. Minimum price requirements also encourage responsible consumption.