EXPERT ADVISORY: December 14 2023 – R0117
With a significant shift on the horizon for alcohol sales in Ontario, all eyes will be on the provincial government’s approach to bring the changes into effect by 2026 — and on the response of stakeholders who have the potential to influence the system’s structure, says Brock University researcher Dan Malleck.
The Professor of Health Sciences and expert on the history of liquor laws in Canada says there are many factors that will need to be addressed before beer, wine and premixed canned cocktails can be sold in corner stores, gas stations and grocery stores across the province, as announced by the Ontario government Thursday, Dec. 14.
Rules around the volumes of alcohol that can be sold in different stores will need to be created, as well as guidelines for how staff selling alcohol will be trained. Consultation with communities will also be required to gauge the local desire or tolerance for licensed retailers, says Malleck, Director of Brock’s Centre for Canadian Studies.
“Some municipal councils will probably balk and, as we saw with cannabis retailing, decide to ban certain types of stores,” he says. “We will also likely see a concerted marketing campaign by several groups of stakeholders — from The Beer Store, to retail organizations, to groups with more concern about the potential dangers of expanded sales — in an attempt to affect the final structure of the system that emerges.”
Malleck says the reform is a “tsunami in Ontario’s alcohol market,” but cautions that a lot can change between now and its implementation two years down the road.
“This government may not be in power in 2026, so a new government might have different ideas of liberalization,” he says. “This is what we saw in 1934 when the liquor law was changed to allow drinking in licensed public spaces. Before it could be enacted, a new government came into power and implemented policies that were less liberal than many had expected.”
Malleck says the potential for competition through price adjustment may also be a major concern.
“The government says the LCBO will charge the same prices across their stores, but private retailers may be able to set their own prices depending upon regulations,” he says. “If this means retailers will be able to offer deep discounts to draw people into their establishments, this could be an even more significant implication.”
However, if the regulations only allow retailers to sell at prices the same or higher than the LCBO and The Beer Store, it may affect the profitability and there may be less interest in the market for smaller players to get involved,” he says.
“They won’t have the economies of scale on their side, and in the face of bigger vendors, they may simply not be worth it to open.”
New rules may need to be constructed to intentionally dull the power of the monopoly held by The Beer Store, which will continue to have cost advantages on its side, he says.
“The Beer Store has the locations, the staff and the skill set to deal with larger volumes, to continue to be the main distributor and to manage things like returns,” he says. “After all, if you still have to go to The Beer Store to return your empties, and it’s right there in front of you, buying from that location may continue to be an attractive option.”
The role and structure of the LCBO will remain the same through the reform, though Malleck says Ontario may see the closure of some storefronts, especially smaller locations near abundant other options.
With high-alcohol spirits, such as vodka and gin, excluded from the 2026 expansion, the changes may be a chance for the LCBO to broaden its offerings of spirits and position itself as a specialty shop, he says, adding Ontario is also likely to see the development of other privately-owned speciality shops focused on wine and beer as the new plan comes into effect.
The reform will mean expansion for some, but not all eligible retail stores, Malleck says.
New requirements for the sale of alcohol may see some supermarkets reduce their offerings, as some have seen the sale of alcohol as more of a problem than a benefit given the restrictions on times of sale, the need for more training of staff and concerns over shoplifting, he says.
Dan Malleck, Professor and Chair of Brock’s Department of Health Sciences and Director of the Centre for Canadian Studies, is available for media interviews on the topic.
For more information or for assistance arranging interviews:
* Doug Hunt, Communications and Media Relations Specialist, Brock University dhunt2@brocku.ca or 905-941-6209
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