For most of us, what happens to our empties at the Beer Store after the conveyor belt transports them to the back of the store is a mystery.
But a recent tour of the Bolton Beer Store shows that there’s really no mystery to sorting and recycling, although some major grocery chains claim the cost and complexity of managing returns is causing them to reconsider selling alcohol in advance of a Jan. 1 deadline, set by the province, that requires all grocers selling booze to take empties.
The chains include Costco, Loblaw, Sobeys, Metro and Walmart, according to the Retail Council of Canada.
The agreement with the province also stipulated that grocery stores more than five kilometres from the nearest Beer Store had to have a return program in place last fall, but only four of 73 stores have complied with the requirement, according to the Beer Store.
The retail council said the 10-per-cent margin on sales given to grocery stores, combined with a 2-cent handling fee per container, is not enough to make running a return program economically sound.
And that, along with the space needed to sort empties, which the retail council estimates will take eight pallets per store, as well as the unsanitary conditions of handling returns, makes taking returns too complex.
“If grocers walk away from selling alcohol, it will be a financial business decision directly stemming from the policy structure built out by government,” said Sebastian Prins, director of government relations in Ontario for the Retail Council of Canada, “not because consumers dislike buying alcohol in grocery, or because my members dislike selling it.”
Deposit return programs may be new to grocers, but they are “old hat” for the Beer Store, which has been running them for nearly 100 years.
“People think it’s a lot more complex than it is,” said Ozzie Ahmed, vice-president of retail for the Beer Store.
“It’s low-tech. It’s not high-tech back there,” he said, referring to the room, just off the Bolton store’s entrance, where empties are handled.
In the 600-sq.-ft. room, boxes are set up at the edge of the conveyor belt so an employee can sort out the private moulded bottles that go back to brewers, including brands such as Moosehead, Sleeman and Corona. Industry standard brown bottles, which can be washed and recycled up to 18 times, sit in boxes on a couple of pallets in the room.
Set against the walls are collapsible corrugated boxes, one each for beer cans, plastic bottles and cardboard, as well as a bin for clear glass bottles, which can be crushed and made into new bottles. Coloured wine and alcohol bottles are put into a crusher so the material can be sent out and used in construction in place of sand and gravel in concrete or in asphalt.
Throughout the network, the Beer Store processes about 1.6 billion alcohol containers a year, said Ahmed. The company wouldn’t divulge how much it gets paid per container from the government to handle returns.
“The stewardship of alcohol containers is an important part of retailer responsibility,” said Ahmed. “This diverts waste from landfills, recycling facilities and ensures consumers have an easy and convenient way to get their deposit back.”
The Beer Store continues to take back more in empties than it sells, but it has closed dozens of stores in the wake of Premier Doug Ford’s modernization of alcohol sales.
The province promised the Beer Store up to $225 million last year to help stabilize the company during the modernization, allowing for a faster expansion of beer, wine, cider and ready-to-drink beverages in convenience stores, grocers and big box stores. This came a year in advance of an agreement the company had with the previous Liberal government to limit expansion of sales until the end of 2025.
But the company will remain the province’s official recycler of alcohol empties until at least 2031.
For consumers, the expansion of sales has resulted in a dramatic increase in the number of locations selling alcohol.
For the Beer Store, the expansion of deliveries to more grocers and convenience stores, on top of retail beer stores, the LCBO, and restaurants and the like, has caused a paradigm shift in logistics.
“The proliferation of all these locations has really changed how we do things,” said John Aitken, the senior manager for the Beer Store’s distribution centre in Bolton.
At the 400,000-sq.-ft. building, the largest distribution centre in Ontario, employees called “pickers” ride around on small electric pallet jacks, like small forklifts, filling orders from huge shelves of beer. Other employees sort beer bottles and empties that have come in from restaurants overnight, something restaurant staff often don’t do anymore due to understaffing, said Aitken. Workers at the back of the centre load bottles into a massive and very noisy crusher.
Aitken said the volume of beer that used to be delivered to one LCBO is now being spread out among 15 to 20 convenience store locations.
“For me, that’s turned a one-shop stop into 20 more shops,” said Aitken, noting that filling orders in the warehouse for multiple locations has become similarly complex.
The modernization has also meant a change in the number of Beer Store trucks that are coming back empty because convenience stores aren’t required to take empties and most grocers have yet to start.
Aitken added that the distribution centre could “absolutely” handle the increased volume if grocery stores started taking returns.
“Truthfully, I would like that, because the thing I dislike most is empty trucks,” said Aitken. “Our reverse logistics is world class.”
Whether those delivery trucks will start coming back full of empties from grocers in January is anyone’s guess.
Added to all the moving parts is an idea being floated by Circular Materials, the company which manages the privatization of the Blue Box in Ontario, that it is open to taking glass and aluminum alcohol beverage containers in the residential recycling program — if the companies that make or sell the alcohol contribute to residential recycling costs.
Those companies aren’t currently obligated to contribute to Blue Box costs when it comes to alcohol containers because empties are managed by the Ontario Deposit Return Program, which is run by the Beer Store.
Circular Materials was founded by 17 brands, some of them the same grocer chains that are considering whether to keep their licences to sell alcohol.
Allen Langdon, CEO of Circular Materials, said if producers became obligated to contribute, “alcohol containers could be collected and recycled through the blue box like all other materials/products in the system.”
