The Circle K store on Parliament St. in Toronto’s Cabbagetown neighborhood on May 21, 2020. Fred Lum/The Globe and Mail
Convenience stores are calling on Ontario Premier Doug Ford to follow through on a delayed promise to allow them to sell beer, a promise that fell through three years ago after failed negotiations with the multinational brewing companies behind the province’s Beer Store chain.
Mr. Ford’s promise to allow the sale of beer and wine in corner stores, which was never mentioned in his recent re-election campaign, was a centerpiece when he was first elected in 2018 and a frequently discussed topic in most of his first year in office.
But it was soon abandoned after the government was warned the move could cost it $1 billion in penalties for failing to comply with the 10-year agreement the Beer Store signed in 2015 with the previous Liberal government to allow sales in grocery stores. but otherwise maintains the chain a partial retail monopoly.
Now that the Progressive Conservative government is in place with a larger majority for the next four years, the convenience store industry is eyeing the deal’s 2025 expiration date, which could end the Beer Store’s dominance. To change the agreement or cancel it, the government has until autumn 2023 to give notice – meaning new rules for the sale of beer are now up for discussion.
Some in the convenience store business even hope to at least have the beer on their shelves within a year, perhaps before the Beer Store deal expires, as has long been the case in neighboring Quebec and New York state.
Kenny Shim, chairman of the board of the Ontario Stores Association and president of the Korean Businessmen’s Association of Ontario, which represents 900 store members, said he spoke with Mr. Ford about two weeks before the election and the premier assured him of the right to sell beer came.
“Typically they tend to listen to you more shortly before the election,” said Mr. Shim, who runs the Busy Bee convenience store on King Street West in Toronto. “He was even more excited to start with a craft beer that was local, at a convenience level.”
Back in 2019, after facing that warning of $1 billion in fines, Mr. Ford’s government passed — but never enacted — legislation that would have scrapped the Beer Store deal and tried void any obligation to offer compensation to the retailer’s multinational owners. The U.S. Chamber of Commerce warned the legislation would hinder doing business in Ontario.
While the Beer Store talks broke down, the government publicized its move to allow more grocery stores to sell beer under the terms of the existing deal. But later, during the pandemic, the province gave ailing restaurants and bars the right to sell takeout alcohol, leading to thousands more places to buy beer.
Emily Hogeveen, a spokeswoman for current Finance Minister Peter Bethlenfalvey — whose purview includes alcohol regulations — said in an email that the government “supports significant change in alcohol sales in Ontario.” She said it’s “one of many priorities for the government, and we look forward to continuing to provide Ontarians with choice and new business opportunities.”
In a statement, Ted Moroz, president of Beer Store – which is primarily owned by foreign-controlled brewers Molson Coors, Labatt and Sleeman – had little to say about the future of the deal with Queen’s Park, known as the Basic Framework Agreement (MBA).
“We have nothing new to share at this time regarding the MFA talks with the government, which have understandably been suspended during the pandemic,” he said.
Dave Bryans, CEO of the Convenience Stores Association of Ontario, said allowing alcohol takeout during the pandemic has led to the proliferation of “bottle stores” that offer token grocery items to act as de facto convenience stores for alcohol. He also said beer sales were needed to revive his ailing industry, which faces a long-term decline in tobacco sales.
“I think if I were a Beer Store owner, I would find a transition and exit strategy, sooner rather than later,” Mr. Bryans said, adding that he would support a minimum sales requirement for local craft beer.
The Convenience Industry Council of Canada (CICC), a country-wide lobbying group, has commissioned an economic impact report that says allowing the sale of alcohol in corner stores in Ontario would create more than 7,500 new part-time and full-time jobs and would provide more than $115-million in new tax revenue to Ontario, while increasing liquor sales by 3% to 5% annually in the province.
Anne Kothawala, president and CEO of CICC, called the projected increase in sales modest, amounting to a few drinks per person per year.
Her group, she said, remained silent during the recent provincial election campaign, but now hopes to push the issue.
“We know consumers want it. The government promised it. Convenience stores in Ontario are ready,” she said. “And as we say, in the words of Premier Ford, let’s do it.”
The industry has long awaited the change. Ian White, senior vice president of Parkland Corp., which operates the On the Run chain of gas station stores, says his retailers have already expanded their refrigerated space to accommodate future beer sales.
He also said the industry had shown it could enforce age restrictions with its track record of selling tobacco.
“We have training, we have processes in place,” Mr White said. “We’ve been doing it for decades.”
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