In The Line Scott Stinson discusses the precipitous fall in the fortunes of Ontario’s former beer retail behemoth now that beer is available in — shock! horror! — grocery stores and even (gasp!) convenience stores:
“The Beer Store” by Like_the_Grand_Canyon is licensed under CC BY-NC 2.0
A major Ontario retailer announced last month that it would permanently close 20 locations in August. This follows the closure of 10 of its stores just over a week before that, and precedes the planned shuttering of 10 more locations in September.
What business could possibly be swooning this much? A general retailer pummelled by Amazon? An exporter battered by Trump’s tariffs?
Nope: Beer. Seriously. The Beer Store seems to be going down faster than, well, a nice, cold beer.
Welcome to the uniquely weird world of alcohol sales in the province of Ontario, where somehow selling beer has become a struggling business.
Some background is probably required, for those who, understandably, must think by this point that I am full of shit.
For ages the vast majority of Ontario’s beer sales ran through The Beer Store, a chain of 450-ish outlets that was co-owned by Canada’s largest brewers. You could also get beer at the provincially owned LCBO, but the largest size available there was a six-pack. That was it. This system was exceedingly unfriendly to consumers, but owing to our puritan roots and the fact that the brewers had excellent lobbyists at Queen’s Park, it remained that way through decades — and governments of all three major parties.
About a decade ago, the Toronto Star got its hands on one of the agreements between The Beer Store and the province, which revealed what a sweetheart deal it was getting. Among other things, the deal greatly restricted the degree to which the LCBO could compete in beer retail, which caused much frothing over the fact that The Beer Store, long since owned by multinational conglomerates, was getting preferential treatment over the province’s own booze outlet.
The Liberal government of the day responded by loosening The Beer Store’s stranglehold on beer retail, but just a little: allowing it to be sold at a limited number of grocery stores, a hilariously small step but one that in Ontario was nevertheless a great leap forward.
Doug Ford’s Conservative government had long wanted to expand alcohol sales much further, but always stumbled over the fact that The Beer Store had a deal that prohibited such expansion until 2026. But then Ford wanted to hold an election last spring and he convinced The Beer Store to let him break that deal a year early for $225 million, which always seemed like an awfully steep price to move up that expansion by what amounted to a number of months.
It’s only in recently, though, that it has become clear how spectacularly dumb that giant payment was in the first place.
