Beer sale roll out begins at Ontario grocery stores

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Premier Kathleen Wynne became the first Ontarian in a century to buy beer at a grocery store Tuesday, as the province unveiled the first 58 supermarkets to sell suds.

Most of the outlets, which had to bid for special licences from the government, are major chains – Loblaw, Sobeys, Metro and Walmart – with a handful of independents.

"Today, the wait is over. Beer is here in grocery stores, just in time for the holidays," Ms. Wynne said at a Loblaws on Lake Shore Boulevard East in Toronto. "We have embarked on the biggest shakeup to alcohol sales since the end of Prohibition."

Ms. Wynne selected a pack of Rhyme & Reason, from Hamilton brewery Collective Arts, in front of a phalanx of television cameras, dozens of representatives from the province's craft beer industry and a gaggle of Liberal politicians squeezing into the shot. The clerk asked her for ID at the checkout. "It's nice to be carded," the 62-year-old Premier replied.

"I'm double-fisting!" Finance Minister Charles Sousa exclaimed as he picked up a six-pack of Flying Monkeys Hoptical Illusion in one hand and a bottle of Kissmeyer Nordic Pale Ale in the other. "Did you get the snacks, Premier?"

Despite the hoopla at Ms. Wynne's photo-op, the reforms are fairly modest. Grocery stores will be allowed to sell only six-packs and singles. The Beer Store, run by a private cartel of multinational corporations, will retain the exclusive right to sell 24-packs and most 12-packs. There are also rules prohibiting supermarkets from offering lower prices or longer hours than The Beer Store or the government-owned LCBO.

The beer-in-grocery-stores program, formulated earlier this year by Ms. Wynne's business adviser, Ed Clark, is meant to deliver more money to government coffers. The province aims to eventually auction off 450 licences.

The province introduced Prohibition in 1916. When alcohol became legal again in 1927, it was tightly controlled, with all spirits sold through the LCBO and most beer retailed through a co-operative of brewers that eventually morphed into The Beer Store.

Currently, Quebec and Newfoundland and Labrador allow beer sales in grocery stores; they also allow convenience stores to sell beer, which Ms. Wynne has ruled out. British Columbia and Alberta allow private standalone liquor stores.

Ms. Wynne said she decided not to take alcohol reforms further – such as allowing grocery stores and the LCBO to sell cases of 24 – because The Beer Store's economies of scale help keep beer cheap for consumers.

"They have established a distribution network that people rely on, that works, that keeps the price of beer low," she said. "We wanted to work with them in partnership, as opposed to blow up that network, and this was the agreement that we came to."

Loblaw, the country's biggest grocer, received the largest single number of licences at 19, spread between Loblaws, Real Canadian Superstores and Fortino's. Loblaw was also first out of the gate. Spokesman Kevin Groh said the company received its licences and permits last week, which allowed it to start stocking beer on Tuesday. "At the same time, we were working very enthusiastically to make sure our stores were trained and open for business the minute we were allowed to sell beer," he said.

Other grocers, meanwhile, said the government did not give them their licences until this week.

Metro spokesman Mark Bernhardt said the company only received permission to place an order for beer on Tuesday and it would take one or two weeks for the product to arrive. He said beer would first be available at four of the company's Food Basics locations, in London, Niagara Falls, Hamilton and Orillia.

Sobeys, the country's second-largest grocer, also isn't starting to sell beer immediately, although it eventually will, spokeswoman Vicki Leung said. "We are currently in the process of finalizing our plans, details and timing," she said.

Walmart Canada just got its licence to order beer for three locations – in Sudbury and London – on Monday, spokesman Alex Roberton said. The retailer doesn't expect to be stocking beer until the new year.

As part of the package of changes, the province is also requiring The Beer Store to allow any Ontario brewery to become part owner, reserve 20 per cent of shelf space for craft brews and hire a "beer ombudsman" to field complaints from customers and craft brewers.

"In the new year, we look forward to the appointment of the beer ombudsman, and I'm encouraged by how much interest there seems to be in this position," Mr. Sousa said.

Craft brewers have been divided by the government's move. Some have called for a freer market, including the right for independent stores to compete with The Beer Store, while others said Tuesday they were satisfied with Ms. Wynne's changes.

"It's truly a historic day for the craft brewing industry and for craft consumers in Ontario. This has been 88 years in the making," said John Hay, president of Ontario Craft Brewers.

Loblaw chief operating officer Grant Froese said his company would exceed the province's target of 20 per cent of beer in grocery stores being craft.

"We're aiming to provide equal shelf space for the biggest names in beer in Ontario, plus our local craft brewers," he said, adding the company planned to stock more than 200 varieties.