The retail marketplace for liquor products in Ontario is getting ready for a huge transformation. In the largest expansion of consumer choice and convenience since the end of prohibition almost 100 years ago, all participating convenience, grocery and big box stores across the province will be able to sell beer, wine, cider, coolers, seltzers, and other low-alcohol ready-to-drink beverages by Oct. 31, 2024. This new, more open marketplace will introduce up to 8,500 new stores where these products can be purchased. Currently, there are approximately 2,200 retail outlets selling a variety of liquor products. Expansion will be phased in as follows:
- On Aug. 1, 2024, up to 450 grocery stores that are currently licensed to sell beer, cider or wine will also be able to sell ready-to-drink beverages. These grocery stores will also be able to start offering consumers large-pack sizes such as a 30-pack.
- After Sept. 5, 2024, all eligible convenience stores will be able to sell beer, cider, wine and ready-to-drink alcoholic beverages.
- After Oct. 31, 2024, all eligible grocery and big-box stores will be able to sell beer, cider, wine and ready-to-drink beverages, including large pack sizes.
The Alcohol and Gaming Commission of Ontario is now accepting applications from convenience, grocery and big box stores interested in becoming licensed to sell liquor products. In addition to the large-scale expansion of retail outlets, Ontario will allow competitive pricing for liquor (removing the current uniform price requirements and allowing more flexibility) and allow all licensed retailers to sell large package formats (i.e. 12 or 24 packs). LCBO will be the wholesaler for all products.
Revised regulations set out licensing requirements for new eligible retail outlets (such as size and product offerings) and the rules for selling alcohol, including social responsibility standards. Of note, licensed retail outlets will be permitted to offer online sales and delivery to customers in accordance with the regulation. Shelf space requirements for products from small breweries, wineries and cideries will also apply.
Manufacturers should be aware that restrictions on private label products and financial inducements will apply for new licensed retailers, but services such as demand planning, forecasting and category management may be provided without remuneration.
Foreign and domestic manufacturers seeking to enter the expanded retail market or supplement their current product offerings should be reviewing their product portfolios as soon as possible to consider steps to take advantage of this exceptional growth opportunity.
The importation of liquor products into Canada is heavily regulated and each province has its own regime for distribution and sales and unique liquor legislation governing those activities. Manufacturers seeking to enter a province will need to assess each province separately, including its available sales channels, distribution regime and procurement practices.
Manufacturers should be aware that they are responsible for ensuring compliance with labelling requirements set out in federal and provincial legislation, which includes French language requirements in Quebec. Advertising of liquor is also regulated with broadcast advertising subject to additional specified restrictions. Provincial liquor regulations set out rules for marketing and promotions within each province including contests, endorsements, sampling and tastings.
Manufacturers should also consider brand protection before entering Canada or introducing new products to market. Rights in trademarks and geographical indications should be safeguarded where possible.
The regulatory environment for liquor products in Canada is complex.
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