Province Takes Next Steps to Modernize Beer Retailing
Grocery Stores Can Now Submit Bids to Sell Beer
In a move that offers consumers more convenience and choice while maintaining a strong commitment to social responsibility, the Ontario government is now accepting bids from grocery retailers interested in carrying beer.
Premier Kathleen Wynne made the announcement today with Ed Clark, Chair of the Premier's Advisory Council on Government Assets. This is a key step forward in the biggest change to alcohol retailing in Ontario since Prohibition was repealed nearly 90 years ago.
The government has established specific eligibility criteria to provide the best value for consumers while ensuring that small and large grocers, and all regions of Ontario, are fairly represented. Beer sales will be expanded to grocery stores starting with 60 locations, to be announced in December 2015.
As part of Ontario's commitment to social responsibility, grocery stores interested in selling beer must commit to meeting strict requirements for the safe retailing of alcohol, including standard hours of sale and rigorous training for staff.
As announced in April, the new beer framework retains the best parts of Ontario's existing retailing system, enabling Ontario to maintain its consumer prices for beer below the national average. The government has finalized a new series of agreements with The Beer Store, which levels the playing field for Ontario-based brewers and creates new opportunities for economic growth in communities across the province. Key benefits include:
- 20 per cent minimum shelf space for small brewers in The Beer Store network;
- A fairer system of governance that returns The Beer Store to its original co-operative roots by opening up ownership to the Ontario beer industry; and
- Savings for brewers that are not current owners in The Beer Store network.
The arrangement also includes a commitment from the industry's largest brewers to cap price increases to inflation for some of their most popular beer products until May 2017, unless there are material changes to the industry.
Providing convenience and choice for consumers and more opportunity for small brewers is part of the government's plan to build Ontario up. The four-part plan includes investing in people's talents and skills, making the largest investment in public infrastructure in Ontario's history, creating a dynamic, innovative environment where business thrives and building a secure retirement savings plan.
- Under this initiative, up to 450 grocery stores across the province will be allowed to sell beer — including up to 150 by May 2017.
- Interested grocery retailers can register at www.biddingo.com under LCBO RFB #2015-010. The deadline for submissions is November 6, 2015. A third-party Fairness Commissioner will oversee the bidding process.
- The Premier’s Advisory Council on Government Assets conducted extensive industry consultations to define a fair and socially responsible model for beer sales in grocery stores.
- The new beer agreements and grocery store allocation process meet key principles laid out in the Council’s final report, released in April. Grocery store retailers will not be subject to a strict cap on sales. When fully phased in, should sales across the grocery network exceed $450 million, grocers whose sales exceed their share of that global cap will pay a small fee.
- The Alcohol and Gaming Commission of Ontario will be responsible for appropriately regulating the new private retail channels.
- Since April, Ontario has made significant progress to modernize beer retailing, including a pilot program to sell 12-packs at 10 LCBO stores, free listings for Ontario brewers at The Beer Store, new on-site sales outlets for small brewers, and new Craft Beer Zones at 25 LCBO locations across the province.
- The LCBO has a strong history of supporting the Ontario craft beer industry. Since April 1, LCBO has listed 52 new craft beers. And in 2014–15, the sales of Ontario craft beer grew at LCBO to more than $68 million — up nearly 36 per cent annually — driven by growth from established and new breweries.
“Consumers told us they want more convenience and choice when it comes to buying beer. We are modernizing our province’s beer retailing system to give people better access to the products they enjoy — and doing it in a prudent and socially responsible way. These changes will also level the playing field for Ontario brewers, helping to create jobs and grow our economy.”
“Modernizing Ontario's beer retailing system will open up new business opportunities for small brewers by expanding access to retail outlets and increasing small and craft brewers' overall exposure. In turn, these changes will enable economic growth throughout Ontario, in particular in these small brewers' local communities.”
“We are excited to take this important next step in implementing our beer recommendations. These initiatives are a game-changer for local craft brewers and improve consumer choice and experience in a socially responsible way, all while maintaining beer prices in Ontario that are below the Canadian average.”