Convenience stores are snapping up Ontario’s new alcohol-retailing licences in droves. Grocery stores? Not so much.
According to official data, fewer than four per cent of the province’s 2,000 grocery stores have applied for new licences allowing them to sell beer, wine, cider and ready-to-drink cocktails beginning Oct. 31.
Grocery industry insiders say the biggest reason is a requirement that any stores selling alcohol under the new licences also have to accept bottle and can returns for recycling.
“Food safety is the number one concern. They don’t want empty beer bottles with cigarette butts being dragged into their stores,” said Gary Sands, vice president of the Canadian Federation of Independent Grocers.
Just 53 grocery stores across the province had been issued new alcohol-retailing licences as of July 14 (out of 75 applications), according to the Alcohol and Gaming Commission of Ontario. More than 3,000 convenience stores — or roughly 40 per cent of the total — had been given licences (out of 3,587 which applied). Convenience stores won’t be required to accept empties when their licences come into force Sept. 5.
The Retail Council of Canada, which represents large grocery chains including Loblaws, Sobeys and Metro, and big box chains like Costco and Walmart, says the cost of installing recycling infrastructure makes the alcohol licences unappealing.
“The primary concern is the plan to force consumers to return their empty alcohol containers to grocery stores. Operating return-to-retail systems are expensive, take up valuable floor and backroom space, and create health and safety concerns,” said RCC spokesperson Michelle Wasylyshen. “Grocery stores were not built for this purpose and adaptation of stores will cost hundreds of millions of dollars — costs which Ontario consumers would ultimately bear.”
A spokesperson for Ontario finance minister Peter Bethlenfalvy said the government has already tried to be flexible with recycling requirements, including exemptions for smaller grocery stores and convenience stores.
“The (size) requirement was determined to exempt smaller retailers from accepting empties … while continuing to require returns for large grocery stores, who have more square footage for storage and sorting,” said Bethlenfalvy spokesperson Colin Blanchar.
Under the new rules for grocery stores — and big-box stores like Walmart — starting Oct. 31, any store 4,000 square feet or larger needs to have its own recycling set up to handle empties. Until Jan. 1, 2026, there’s an exemption for stores that are within five kilometres of a Beer Store outlet.
Monday, the Ontario government announced that roughly 450 grocery stores which already have licences to sell beer and wine under the old rules will be allowed to sell ready-to-drink cocktails and cases of beer starting Thursday, as opposed to Aug. 1 — a shot across the bow of striking LCBO workers.
The Ontario Public Service Employees Union has argued that allowing RTDs — the fastest-growing alcohol segment — to be sold at other retailers would hurt the LCBO’s revenue. Premier Doug Ford, says the union’s insistence on allowing the LCBO to keep a monopoly on RTD sales is a futile effort, arguing “that ship has sailed.”
Those 450 licences were issued under the Master Framework Agreement (MFA), which expires at the end of 2025.
As part of an agreement with The Beer Store and its owners, the provincial government is paying $225 million to get an early jump on wide-open alcohol retailing that would otherwise have had to wait until the beginning of 2026, after the official end of the MFA.
While convenience stores have been more inclined to apply for the alcohol licences, it’s not a no-brainer for them, either, said Anne Kothawala, CEO of the Convenience Industry Council of Canada.
“I’m not surprised a lot of our members have applied, because this is something we’ve been asking for for a while. But there are still a lot of details they’re concerned about, including how they’ll get it delivered, and how much that will cost.”
