Chain convenience stores say Ontario’s grocery store beer retailing plan unfairly tips the competitive balance toward the largest grocery companies
April 15, 2015 – Oakville, Ontario – The Ontario Convenience Store Association (OCSA) expressed its disappointment today in the alcohol retailing recommendations from the Premier’s Advisory Council on Government Assets. The chain convenience store members of OCSA noted that enabling only large grocery stores to retail beer would radically tip the balance in a very competitive retail marketplace toward the large grocery retailers.
“Large convenience stores are in fierce competition with grocery stores – especially in urban centres,” explained Dave Bryans, CEO, Ontario Convenience Store Association. “One needs to look no further than grocery stores opening small convenience-oriented stores and purchasing smaller competitors to see this happening. I am disappointed that the Clark panel did not adequately consider the tough competition that exists between convenience stores and grocery stores as it developed its proposal for modernizing alcohol retailing in the province. We have concerns that this plan would give a few dominant corporations an unfair advantage over their competitors.”
By allowing only large grocery stores to sell beer, the Clark panel has proposed creating an unfair competitive advantage for grocery conglomerates. Opening the alcohol retailing system to other industry players, including chain convenience stores, is required to sustain a fair and competitive marketplace.
OCSA also renewed its call for the creation of LCBO Beer Agency Stores to bring real choice and convenience to Ontario consumers, rather than a limited expansion to a few select grocery stores. Building on a model that works and Ontarians support, LCBO Beer Agency Stores would be a new type of private retail partner of the LCBO. Within this plan, food and beverage retailers who meet certain high standards could apply for authorization to sell beer under the oversight and scrutiny of the LCBO – just as 219 stores in Ontario currently do with beer, wine and spirits.
“Convenience stores have more experience than any other retailer in North America selling alcohol, including in Ontario through the LCBO Agency Store program, and are committed to responsible retailing practices,” added Bryans. “We believe that the government could avoid disrupting the competitive marketplace by expanding the LCBO Agency Store system, and expand alcohol retailing to consumers in a socially responsible way – just as convenience stores do today.”
This proposal, if adopted by government, would also help boost important sectors like Ontario’s craft beer industry, while returning higher profits to the LCBO. The LCBO Beer Agency Store framework also includes a mandate that retailers set aside a minimum of 30% beer retail space for craft beer. This is a commitment OCSA made to craft brewers that would significantly improve consumer exposure to Ontario craft beer, while creating a broad new set of retailing opportunities for craft brewers.