A look at what this might mean for the brewing industry, consumers, and retailers.
Rumours started last month, but it was just today that the Ontario government officially confirmed beer will be sold in as many as 450 grocery stores across the province and significant changes will be made to The Beer Store and the LCBO. The plan is the most significant booze reform since the province repealed prohibition in 1924.
In a press conference this morning, Premier Kathleen Wynne announced plans to change the The Beer Store’s monopoly, the LCBO’s way of doing business, and much more. These alterations will see a more level playing field between the big and small breweries, increase competition, increase jobs, and increase consumer choice. They result from a report by the Premier’s Advisory Council on Government Assets.
Among the many planned changes will be allowing the sale of beer in 450 grocery stores (roughly, according to Wynne, the same number of Beer Store locations in the province). These changes will begin late this year. Stipulations will include: hours of alcohol sale being the same as other retail outlets in the province, a limitation to sales of six-packs or smaller, staff certification for selling alcohol, and designated display areas in the store.
The Beer Store’s relationship with the government will also be drastically altered. An annual $100 million dollar annual franchise fee will be phased in over the next four years. To ensure that a change of price is not passed on to consumers, there will be a price cap on The Beer Store’s popular brands. Also, The Beer Store will open up sales to small brewers and create a “Craft Beer” category that will take up 20% shelf space for each store.
As for the LCBO, a new e-commerce site will be put in place to allow online orders for pick-up or delivery. Also, stores will be experimenting with the sales of growlers (large glass jugs) and 12-packs. Specialty stores similar to the LCBO’s Vintages sections will also be opened with a focus on beer and whisky.
To ensure a level playing field, the prices for beer brands will be the same across all outlets and a special Ombudsman will be appointed to address complaints regarding the retail sector.
“This is a monumental day for craft brewers and for all consumers in Ontario,” said Cam Heaps, co-founder of Steam Whistle Brewing and chair of Ontario Craft Brewers in a statement released shortly after the press conference. “These changes will take us closer to our vision of making Ontario a North American centre of excellence for craft brewing.”
There is still an air of uncertainty in the industry, but a more detailed list of what changes will be implemented is due on April 23rd. For now, the province has made a first step in a direction that could see Ontario fully catching up with the rest of North America and becoming a world-class beer destination we know it to be.