Billions at stake as Doug Ford government prepares to change booze retailing in Ontario

Premier Doug Ford's government is preparing to change the rules on how beer, wine, cider and spirits are sold in Ontario, and there's plenty at stake — well beyond whether you'll be able to pick up a case at the corner store.

Industry officials expect the government's moves will affect how all types of alcohol are retailed.

The looming reforms also pit a range of interests against each other, as big supermarket companies, convenience store chains, the giant beer and wine producers, craft brewers and small wineries all vie for the best deal possible when Ontario's almost $10-billion-a-year retail landscape shifts. 

As the negotiations proceed, the Ford government faces its own internal dilemma between its competing desires of giving the free market more control of booze sales vs. keeping LCBO revenues flowing into the provincial treasury.

The government has for months been engaged in closed-door consultations with industry players on what it calls "modernizing" the alcohol sales regime in Ontario. 

For Ford's Progressive Conservatives, the chief goal is meeting a yet-to-be-fulfilled 2018 campaign promise to allow convenience stores to sell beer and wine. But multiple sources in various parts of the alcohol and retail industry say much more than that is on the table. 

CBC News did lengthy interviews with eight people from across the beer, wine, spirits and retail sectors. All of them agreed to speak only on condition of anonymity, because the government required everyone involved in the consultations to sign non-disclosure agreements. 

Here's what they say are the issues at stake: 

At its most fundamental level, much of the negotiations boils down to who gets the opportunity to make money off the various points of the alcohol supply chain, and how much. 

"It's a lot of money at stake," said a source in the wine industry. "We're talking billions." 

From $7.4 billion in sales in the 2022-23 fiscal year, the LCBO turned a profit of nearly $2.5 billion. Retailers, wineries and breweries are all hoping for a piece of that.

On a typical bottle of Ontario wine for instance, the producer currently gets roughly 30 to 45 per cent of the sticker price, according to industry officials. 

The LCBO's own price calculators show it puts a 114 per cent retail markup on Ontario wine. One example shows wine supplied by a producer at $8.33 per bottle retailing for $22.30, once the markup, government levies and HST are added in.

Wine producers say the LCBO could afford to give a little on that markup, or the government could allow winemakers more opportunities to sell from their own retail outlets, so they get to keep the markup.