Ontario vastly expanding where booze can be sold in move to modernize alcohol retail market

Starting in 2026, Ontarians will be able to buy beer, wine, cider and seltzers at convenience stores, big box outlets, some gas stations and more supermarkets, marking a major overhaul in how alcohol is sold in the province.

A suite of changes announced Thursday are intended to modernize the booze market, the provincial government said, by ushering in "the largest expansion of consumer choice and convenience since the end of prohibition almost 100 years ago." 

The Ministry of Finance estimates there will be some 8,500 new locations where consumers can purchase low-alcohol products, giving Ontario the third-highest density of alcohol retail stores among the provinces, behind only Newfoundland and Labrador and Quebec.

The LCBO will continue to be the only retailer that sells high-alcohol spirits like gin and whisky.

As part of the overhaul, the province is ending its Master Framework Agreement (MFA) with the multinational conglomerates that own The Beer Store, which currently has a quasi-monopoly on the distribution and sale of beer in Ontario. 

The MFA, which the previous Liberal government extended in 2015, will be allowed to expire at the end of 2025, the province said. 

At a technical briefing for the media Thursday morning, an official called the agreement a strong impediment to retail expansion because it limits the number of grocery stores that can sell beer to 450.

The Beer Store will still be the primary distributor of beer to retailer outlets, bars and restaurants until at least 2031 while the market adjusts to the new regulations, the province said, but smaller Ontario craft brewers will be able to distribute their products through other channels if they wish. 

The Beer Store will also continue to run the province's recycling program for alcoholic beverage containers over the same period.

There will be no caps on the pack sizes of beer, cider and ready-to-drink seltzers sold in the new retail outlets, the government said. Grocery stores in Ontario that currently offer beer are limited to singles and six packs.

While LCBO locations will maintain consistent pricing, private retailers will be able to set their own prices "consistent with relevant regulations," according to the province. There will still be a minimum price for alcoholic products to "preserve standards for responsible consumption," a news release accompanying the announcement said.

The changes also include measures the province said are meant to support sales and growth for local Ontario producers. Existing shelf space requirements for grocery stores that sell alcohol — 20 per cent for craft beer and 40 per cent for Ontario wines and ciders — will be extended to all new retail locations. 

Meanwhile, legislation to be tabled in the coming months would eliminate a 6.1 per cent tax at on-site winery retail shops.

More to come.