Kenny Shim, owner of convenience store Busy Bee Mart and the longtime head of the Korean Businessmen’s Association, has been lobbying governments to sell booze for a quarter-century.Galit Rodan/The Globe and Mail
Ontarians will be able to buy beer, wine, cider and premixed alcoholic drinks at thousands of convenience stores Thursday, in what the government says is the most revolutionary change to the province’s alcohol rules since the lifting of Prohibition 97 years ago.
The liberalization, first announced in May, fulfills a six-year-old promise made by Premier Doug Ford, which was shelved after his government retreated from unilaterally scrapping a 10-year contract with the big brewers behind the quasi-monopoly Beer Store chain.
This week’s changes will render Ontario the third province in Canada, behind Newfoundland and Quebec, to allow alcohol to be sold in corner stores alongside chewing gum, potato chips and cigarettes, a common arrangement in many U.S. states and in Britain.
But the transition has so far not gone down smoothly. It involves paying up to $225-million to compensate the Beer Store chain and its multinational owners to get out of their agreement just 16 months before it would have expired anyway. Critics say the Progressive Conservative government is doling out this cash needlessly, only to rush beer onto shelves in time for a potential ahead-of-schedule spring election.
The new deal also saw workers at the government’s own Liquor Control Board of Ontario stores, whose monopoly on hard liquor will remain, walk off the job for just over two weeks in July. Plus, public-health advocates, including those at the Centre for Addiction and Mental Health, have warned that the changes will mean more drinking, more drunk driving, more ER visits and more alcohol-related deaths.
Finance Minister Peter Bethlenfalvy, whose portfolio includes Ontario’s alcohol regime, says despite the criticisms, the long-promised changes are a no-brainer.
“I think people are very happy, broadly speaking, that we are actually delivering on something that we campaigned on and they’re seeing action,” he said in an interview.
You won’t find any argument from Kenny Shim, who has owned Busy Bee King Mart at King Street West and Bathurst Street in Toronto for 33 years. The head of the Ontario Korean Businessmen’s Association (OKBA), which represents independent Korean store owners, and the president of the 7,000-member Ontario Convenience Store Association, Mr. Shim has been lobbying governments to sell booze for a quarter-century.
Last week, he was still deciding where his new beer fridge would go and plotting to move his peanuts and beef jerky shelves right next to it. All his staff, he said, have completed the mandatory alcohol-sales training.
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While showing off cases of microbrew he had ready in his backroom, he tells a reporter he has spent the past few weeks visiting Ontario wineries and has even surveyed his customers – most drawn from the area’s mushrooming condos – about which bottles were their favourites.
Even he acknowledges that the $225-million payoff for the Beer Store might rub other taxpayers the wrong way and that the move to open up the beer market has been rushed and will need some fine-tuning.
But he said many in his industry, long hurting with the decline of tobacco use – the OKBA used to have 4,000 members, he says, but is now below 1,000 – needed a lifeline, and Mr. Ford delivered.
“I have to say, despite what people say about the Premier paying so much money to start, it’s a reality. It’s a happy event for us,” Mr. Shim said, adding that he thanked Mr. Ford personally at a recent summer fundraiser and donated again to the PC Party.
Not every corner store in the province is jumping into the new market. According to figures the government provided last week, 4,043 convenience stores – including gas stations – had been granted licences. About 3,000 had ordered stock via the LCBO, which is the exclusive wholesaler under the new regime, in time for delivery by Sept. 5, Mr. Bethlenfalvy said.
The chain 7-Eleven, whose Japanese parent is currently subject to a takeover bid from Canadian corner-store giant Alimentation Couche-Tard, has gone a step further and sought full licences to actually serve liquor for customers to drink inside its more than 50 Ontario locations.
Mr. Shim says some corner stores are waiting to see how the market will shake out, while others may not have the space or the money to expand.
Customers could be in for a bit of sticker shock: Under the new rules announced in May, convenience stores and grocery stores (some of whom already stock beer, wine, cider and ready-to-mixed drinks) will be allowed to set their own prices for alcohol, offering sales – but not below legislated minimum prices – or charging a premium.
Previously, uniform prices across the province were set by the LCBO, which will retain this practice for its own shelves. Convenience stores and grocery stores will also benefit from a 10-per-cent wholesale discount from the LCBO, meant to foster competition.
But the grocery business is bristling at the new arrangements, largely because it will eventually be forced to collect empties while convenience stores under 4,000 square feet will be exempt.
About 450 large supermarkets were already allowed, as part of the previous 10-year deal with the Beer Store signed in 2015 by the previous Liberal government, to stock beer and wine.
As of Oct. 31, all grocery stores and “big box” stores in the province will be allowed to sell beer, wine, cider and premixed drinks. But only 154 additional stores had bothered to get licences as of last week.
The Retail Council of Canada, which counts, Loblaw, Sobeys, Walmart and other grocery giants among its membership, has said some members were mulling getting out of the booze business altogether. Smaller, independent stores say retrofitting their operations to handle shopping-cart loads of empties would be a logistical nightmare.
David La Mantia, owner of La Mantia’s Country Fresh Market in Lindsay, Ont., 130-kilometres northeast of Toronto, says when he is eventually forced to take empties, he’ll turn in his alcohol-sales licence.
“I have an obligation to my customers to ensure food safety here,” Mr. La Mantia said in an interview. “And I am not going to risk that by having a bunch of dirty empties coming through the front door of my store.”