There were 60-can cases of beer, some big bottles (and boxes) of wine, and what at first appeared to be some great deals.
But at an Etobicoke Costco Thursday, there was also some confusion, and a bit of disappointment as the U.S. retail giant launched alcohol sales in Ontario for the first time.
“Wow, that’s cheaper than the LCBO,” one eager customer exclaimed, seeing a 1.5-litre bottle of Bread and Butter Cabernet Sauvignon from California, listed at $29.95, five bucks cheaper than the LCBO’s shelf price of $34.95. Their shoulders sagged when another customer gently corrected them.
“That doesn’t include taxes,” the passerby noted. “The LCBO’s does.”
A bottle of Louis Latour Chardonnay listed at $21.99 and a bottle of Kozelmann Estate Cabernet Sauvignon listed at $15.99 resulted in a bill of $43.32, including 20 cents a bottle in deposits, and a total of $4.94 in tax.
Fewer than 15 per cent of grocery stores eligible for a new alcohol sales licence have applied for one, thanks largely to a dispute over recycling requirements. Costco, however, has leapt in with both feet, with all 31 of their Ontario stores getting licences, along with a 32nd store opening in late November.
Alongside some imports like Bread and Butter or Italy’s Masi Campofiorin, at the Etobicoke store visited by Ontario Premier Doug Ford Thursday morning, there was also a selection of wines from some Ontario wineries, including several from Wayne Gretzky Estates, and others from Henry of Pelham and Flat Rock Cellars, among others.
Only one standard-sized 750 ml bottle of table wine was priced higher than $20 — a Chardonnay from Burgundy for $21.95. Veuve Cliquot Champagne was $69.99.
Costco didn’t respond to repeated requests for comment.
The beer section was dominated by big brands in big cases, including 60 cans of Molson Canadian, which could be yours for $84.99 (plus tax), or cases from two of Ontario’s larger craft brewers, Steam Whistle and Muskoka Brewery. (A two-four of Steam Whistle? $46.99 plus tax).
One big omission? Costco’s own Kirkland brand, which is a big chunk of the company’s sales in other product categories.
“Wait, there’s no Kirkland? That’s too bad,” one customer told a Costco staffer. “I had some in Florida and it was awesome.”
The Ontario government has said it’s considering allowing the sale of private label alcohol, but says it won’t come before 2026.
“The government will continue to prohibit the sale of private label alcohol in stores until 2026 to provide a level playing field for small and medium-size producers and provide ample choice for Ontario consumers,” said Colin Blachar, a spokesperson for Ontario Finance Minister Peter Bethlenfalvy.
Blachar said the government will also be speaking with other industry stakeholders, including wineries, breweries and their trade associations, about the prospect of private label alcohol.
“We will also continue to consult with other market participants on the issue,” Blachar said, “including considering the appropriate guardrails so that private label products may be introduced on shelves as early as 2026.”
The head of the Ontario Craft Wineries trade association praised the expansion into more grocery stores and big box retailers as “a great step in the right direction,” but also sounded a note of caution about protecting Ontario wineries, especially smaller brands.
“Retail expansion should never come at the expense of small, local producers,” said OCW CEO Michelle Wasylyshen. “If retailers are able to one day sell their own private SKUs — with no investment, no vineyards and no wine production in Ontario — we would expect to see numerous guardrails put in place to protect our domestic brands.”
There’s no doubt that Costco has its eye on bringing Kirkland beer and wine to its Ontario stores, retail analysts say.
“There are much better margins for private label products, so I’m sure they’d be looking at it when they can,” said Lisa Hutcheson, managing director at retail consultancy J.C. Williams Group.
Retail analyst Bruce Winder agreed, adding that Costco will likely use the next year or so to figure out exactly what their shoppers are looking for.
“This way, they get a year and a half of market research, so when they’re allowed to bring in Kirkland, they’ll have a much better idea of consumer behaviour,” said Winder.
As far as the seemingly amazing bargains because the price tags didn’t include taxes, Hutcheson said it could cause a few disagreements at the cash register, but likely won’t be a long-term issue.
“It might cause some confusion at first,” said Hutcheson, “but I think customers will probably get used to it.”
