Ontario’s convenience stores push Premier Doug Ford on derailed beer pledge

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Convenience stores are calling for Ontario Premier Doug Ford to fulfill his shelved promise to allow them to sell beer, a pledge derailed three years ago after failed talks with the multinational brewing companies behind the province’s Beer Store chain.

Mr. Ford’s promise to allow beer and wine sales in corner stores, never mentioned in his recent re-election campaign, was a central plank when he was first elected in 2018 and a frequent talking point for much 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 reneging on the 10-year deal the Beer Store signed in 2015 with the previous Liberal government that allowed sales in grocery stores but otherwise maintained the chain’s partial retail monopoly.

Now, with the Progressive Conservative government in place with a larger majority for the next four years, the convenience-store industry is eyeing that deal’s 2025 expiry date, which could see an end to the Beer Store’s dominance. In order to alter the agreement or quash it, the government must give notice by the fall of 2023 – meaning new rules for beer sales are now up for discussion.

Some in the convenience-store business even hope at least beer could be on their shelves within a year, perhaps before the Beer Store deal expires, as has long been the case in neighbouring Quebec and New York State.

Kenny Shim, board chair for the Ontario Convenience Stores Association and president of the Ontario Korean Businessmen’s Association, which represents 900 convenience-store members, said he spoke with Mr. Ford about two weeks before the election and the Premier assured him the right to sell beer was coming.

“Usually they tend to listen to you more a little before the election,” said Mr. Shim, who runs the Busy Bee convenience store on King Street West in Toronto. “He was even more enthusiastic about starting off with craft beer that’s local, at the convenience level.”

Back in 2019, after facing that warning of $1-billion in penalties, Mr. Ford’s government passed – but never enacted – legislation that would have torn up the Beer Store deal and attempted to void any obligation to offer compensation to the retailer’s multinational owners. The U.S. Chamber of Commerce warned the legislation would put a chill over doing business in Ontario.

While talks with the Beer Store fizzled, the government trumpeted 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, resulting in thousands more places to buy beer.

Emily Hogeveen, a spokesperson for current Finance Minister Peter Bethlenfalvy – whose remit includes alcohol rules – said in an e-mail the government “supports meaningful change to alcohol sales in Ontario.” She said this is “one of many priorities for the government and we look forward to continuing to deliver choice to Ontarians and new opportunities for business.”

In a statement, Ted Moroz, president of the 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 Master Framework Agreement (MFA).

“We have nothing new to share at this time regarding MFA negotiations with the government, which have understandably been paused during the pandemic,” he said.

Dave Bryans, chief executive officer of the Ontario Convenience Stores Association, said allowing takeout alcohol during the pandemic has resulted in the proliferation of “bottle shops” that offer token food items in order to act as de facto liquor stores. He also said beer sales are needed to revive his ailing industry, which faces long-term declining tobacco sales.

“I think if I was the Beer Store owners, I would be finding a transition and exit strategy, sooner than later,” Mr. Bryans said, adding that he would support a minimum requirement for sales of local craft beer.

The Convenience Industry Council of Canada (CICC), a countrywide lobby group, commissioned an economic impact report that says allowing alcohol sales in corner stores in Ontario would create more than 7,500 new part-time and full-time jobs and deliver more than $115-million in new tax revenue for Ontario, while increasing the sales of alcoholic beverages by 3 per cent to 5 per cent a year in the province.

Anne Kothawala, president and chief executive officer of the CICC, called the projected increase in sales modest, amounting to a few drinks per person a year.

Her group, she said, stayed quiet during the recent provincial election campaign but now hopes to push the issue.

“We know consumers want it. The government promised it. Ontario convenience stores are ready,” she said. “And as we say, in the words of Premier Ford, let’s get it done.”

The industry has been long been anticipating the change. Ian White, senior vice-president of Parkland Corp., which operates the On the Run chain of gas-station convenience stores, says his retailers have already expanded their fridge space in order to accommodate future beer sales.

He also said the industry has shown it can enforce age restrictions with its track record selling tobacco.

“We’ve got training, we’ve got processes in place,” Mr. White said. “We’ve been doing it for decades.”

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