Brad Fletcher, president of the Village Grocer, in the wine and beer section of the grocery store, in Markham, Ont., on Sept. 13.Christopher Katsarov/The Globe and Mail
When The Village Grocer started selling beer and wine five years ago, alongside its grocery staples, homemade ice cream and free-range poultry, it was a natural fit.
“We thought it was a nice synergy between good food and good wine,” said Brad Fletcher, president of the independently-owned store in Markham, Ont. “Our customers love it.”
But for Mr. Fletcher, and some other grocers in Ontario, the days of selling tipples to pair with the food in customers’ carts may be coming to an end. Retailers are raising concerns about new requirements to take back empty alcoholic beverage containers as a condition of their sales licences – citing concerns about food safety and costs. And some say they may stop selling alcohol altogether as a result.
As of Oct. 31, stores larger than 4,000 square feet located more than five kilometres from a Beer Store will be required to accept empty cans and bottles; those within that radius, such as The Village Grocer, will face the same requirement on Jan. 1, 2026. Convenience stores, which recently began selling alcohol in the province, are exempt from taking returns.
A Walmart WMT-N store in Ancaster, Ont., that is out of that five-kilometre range will stop selling alcohol next month when the new rules come into effect, according to the company. Walmart Canada has roughly 60 licences to sell alcohol in the province. The company declined to comment further for this story.
Mr. Fletcher, too, says that he will take beer and wine off his shelves, if nothing changes by the end of next year.
“That is my plan. My hope is that it changes,” he said.
People sit in a cafe area next to alcoholic products in the wine and beer section of the Village Grocer store in Markham, Ont.Christopher Katsarov/The Globe and Mail
Grocery retailers are raising the alarm that dirty bottles and cans will create unpleasant odors in their stores, attract pests or even rodents and lead to food safety concerns. It also creates labour pressures, since staff will need to process the returns. They argue these are better directed to the Beer Store – which has operated Ontario’s deposit-return system for decades – where food is not handled and sold.
“Some of those bottles have been sitting in a garage for three years. Some of those bottles have been used as receptacles for tobacco products. Some of those bottles might be broken,” Mr. Fletcher said. “… It just doesn’t make sense to us.”
There are currently about 450 grocery stores selling beverage alcohol in the province. In May, the government announced it would open up alcohol sales to all grocery stores as well as convenience stores. To make that happen, the government agreed to pay $225-million to the Beer Store, which is controlled by multinational brewers Molson Coors TPX-B-T and Anheuser-Busch InBev, to end a 10-year agreement that was set to expire on Dec. 21, 2025.
According to the Alcohol and Gaming Commission of Ontario, 195 additional grocery store licences have been approved to start selling alcohol on Oct. 31. The products grocery stores can sell were expanded in July, to include larger beer pack sizes and ready-to-drink alcoholic beverages.
Ontario Finance Minister Peter Bethlenfalvy told reporters on Thursday that negotiations with grocers on the rollout of the new booze regime were continuing. But when asked if the government would change the recycling requirements, he said it would not.
“We’ve made a commitment that these are the requirements,” Mr. Bethlenfavly said at an unrelated announcement in Toronto. He added that no retailers have turned in their sales licences.
For now, independently-owned grocer Summerhill Market is not stocking alcoholic beverages at all. “We were looking at it for some of our newer stores, just trying to increase our customer count,” said co-owner and vice-president Christy McMullen, who has six locations in and around the Greater Toronto Area. Taking back empties is the primary reason she has chosen not to do so. With small stores that average around 5,000 to 6,000 square feet, she would have no space to store dirty empties awaiting pickup in a dedicated area away from her food products. “At this point, there would be zero chance that we would want to do that if that was on the table.”
Not everyone is pulling back. Sobeys parent Empire Co. Ltd. EMP-A-T has been applying for more liquor licences to expand the number of stores where it sells alcoholic beverages, spokesperson Karen White-Boswell wrote in an e-mailed statement. However, she added the company remains concerned about aspects of the province’s model, including returning empties to retail stores.
Empire is working with the provincial government “to refine those aspects to reflect the reality of the market and focus on how to best serve our communities,” Ms. White-Boswell said.
Metro Inc. MRU-T, which sells alcohol in 74 Metro and Food Basics stores in Ontario, declined to comment on the matter. Loblaw Cos. Ltd. did not respond to requests for comment.
Retail Council of Canada spokesperson Michelle Wasylyshen confirmed that discussions with the government about the system are continuing.
“At a high level, I would tell you that grocers are watching to see if the economics around selling alcohol become more viable,” Ms. Wasylyshen wrote in a statement to The Globe, and are hoping for “a much more rational” system for collecting empty containers.
She pointed to other jurisdictions in Canada, such as British Columbia, which operates a dedicated network of depots for container returns.
In Quebec, where retailers have been required to take empties for years – and where the system has expanded to include returns of other containers such as water bottles and milk containers – a transition is under way to shift returns to depots as well.
Asking stores to handle returns is “fundamentally crazy,” said Pierre-Alexandre Blouin, president of the Quebec Food Retailers Association. Automated return machines, located in the entrance vestibules of many stores, do not solve the problem, he said, because liquids leak from customers’ bags on the floor while they are feeding containers into the machines, requiring more cleaning to avoid attracting vermin. Staff also have to empty the machines regularly, and still have to find space to store the dirty containers until they are picked up.
“There is too much impact on food safety, and physical proximity with food storage and food preparation is always a headache for operators,” Mr. Blouin said.
But advocacy group Environmental Defence, which has been pushing for an expanded deposit-return program in Ontario – including for non-alcoholic beverage containers – argues that with the expansion of alcohol sales, traffic to the Beer Store is likely to drop, leading to lower return rates.
“The challenge that we’re facing right now, specifically with alcohol, is that the containers are not necessarily making it back to the Beer Store,” said Environmental Defence associate director Ashley Wallis. “And I think, unless you have retailers step up and play their part in the system, you’re going to see a continued erosion of those recycling rates.”
Containers that are dropped in municipal recycling boxes are not refilled – in the case of reusable beer bottles – or recycled at the same rate, Ms. Wallis said. She also pointed out that retailers receive a small fee to offset collections.
But some say the nominal fee is not enough to cover the changes they would have to make to their stores to collect empties in a way that does not compromise their food operations.
“We just were never built for that kind of a system,” said Giancarlo Trimarchi, who owns four Vince’s Market locations in Ontario, three of which sell alcohol. Independent retailers like him tend to have smaller locations, and pay higher rent-per-square-foot, he said, meaning that space is at a premium – and making room for empties could mean retrofits they cannot afford.
“Once that hits your books, where does it go? We don’t have a magic bag of cash that we just go and dip into,” he said. Mr. Trimarchi is hoping the government may make changes to the system before the end of next year, when his stores will otherwise have to start taking returns.
He would like to see the square-footage exemption expanded, so that more smaller independent stores can opt out. In the absence of that, Mr. Trimarchi says he would be reluctant to stop selling alcohol, because customers appreciate it. But he is worried that participating could be costly to his business.
“We are very, very fearful of January, 2026,” he said.
With a report from Jeff Gray in Toronto