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Ontario Is Set To End Its Deal With The Beer Store To Make Beer In Corner Stores Happen

The penalties that province could incur from breaking its contract with The Beer Store could near $1 billion.
Ontario Is Set To End Its Deal With The Beer Store To Make Beer In Corner Stores Happen

It looks as if the expansion of beer sales to corner stores will soon be a reality. Surfacing reports indicate that Premier Doug Ford's government have tabled legislation that would cancel the Ontario The Beer Store deal. Scrapping the 10-year agreement will allow the province to sell beer in convenience retail outlets.

It was announced this afternoon that Ontario Finance Minister Vic Fedeli is set to introduce legislation which would end the deal, called the Master Framework Agreement.  By breaking the contract, penalties incurred by Ontario could end up costing the province nearly $1 billion.

Last month, CBCstated that implementing beer sales in corner stores breaches a contract that is currently in place between the province, The Beer Store, and three major brewers.  The contract - which is set to expire at the end of 2025 - limits the number and type of retail stores that can sell beer in Ontario.

According to the report, any breach of the contract's key terms - including the expansion of the beer retail market to Ontario's 11,000 convenience stores - will result in financial penalties.  Initially, beer industry sources informed CBC that these penalties would substantially exceed $100 million. Now, reports estimate the cost of the penalties to be closer to the $1 billion in actuality.

The contract, which was signed by the Liberal government back in 2015, has "ironclad provisions" that prohibit the government from creating new laws to get out of the deal, according to CBC.

Finance Minister Vic Fedeli commented in an interview last month, "We're going to continue to consult right across the industry over the course of the summer.  I think the premier was pretty clear during the election and since that we want to put beer and wine in corner stores, big box stores, and more grocery stores because we want to offer people more choice and convenience." 

In response to reporters questioning whether or not expanding beer retail sales is worth the hundreds of millions of taxpayer dollars in penalties, Fedeli simply explained, "Well, we don't make any presumptions."

Despite the fact that Ford reportedly abstains from alcohol, his government has prioritized expanding the beer retail market. The political implications of breaching this contract are tremendous, especially considering how Ford often refers to "respecting taxpayers" as the cornerstone of his platform.  

Reports from CBCalso suggest that if beer is indeed sold at corner stores, it will be much more expensive than products sold at The Beer Store, where brewers set their own retail prices.

Fedeli is holding a press conference this afternoon to address the legislation.

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