Province puts hold on plan to install LCBO kiosks in grocery stores

TORONTO – Premier Kathleen Wynne is putting on hold a plan to set up liquor store outlets in select grocery stores, saying it doesn’t make sense to continue with the “isolated plan” as the government considers other changes to Ontario’s alcohol distribution system.

The Liberal government tapped TD Bank CEO Ed Clark to examine the relationship between the Liquor Control Board of Ontario and the Beer Store as part of a review of all government assets, and his recommendations are expected to come in the spring budget.

Wynne wouldn’t commit to bringing the LCBO Express Stores initiative back, saying she won’t “jump ahead” of Clark’s recommendations.

“I think it makes sense that we wouldn’t take an isolated plan that we had previously and continue with it when there’s a much bigger discussion happening now,” she said.

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The LCBO says it was in the process of finalizing lease agreements with host retailers for the express stores in London, Mississauga and Toronto, but the government asked the agency to put the plan on hold.

The government previously said the outlets would keep the same hours as regular government-run liquor stores and would carry a range of the LCBO’s bestselling beer, wine and spirits, including Ontario craft beer and VQA wine.

Clark’s panel has talked about an interim recommendation that the province charge the Beer Store a fee for their virtual monopoly, saying there was a clear value that could be auctioned off if it won’t pay up.

In the meantime, the Beer Store offered Ontario brewers the chance to become owners – paying either $1,000 or $100 depending on the size of the brewery – and get one Class E or Class F share. They were also offered a total of three seats on the 15-member board of directors of the Beer Store, while owners Molson, Labatt and Sleeman would still have a dozen seats.

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But the Ontario Craft Brewers industry association is recommending its members don’t take the foreign-owned Beer Store up on its offer to become shareholders. The group said on its website it doesn’t know of any craft brewers that have purchased shares and they recommend it stay that way.

“Being a minority shareholder of any type in an organization where your competitors are the major shareholders would have no guarantees of improving retail access to the level consumers and craft brewers need to sustain growth,” the group said.

Beer Store spokesman Jeff Newton said “several” Ontario brewers have approached the Beer Store requesting to enter into the due diligence stage of becoming a shareholder.

The craft brewers say the ownership changes do not address the key issue of improving access for consumers. They are calling for beer to come out from behind the walls in Beer Stores and allowing craft brewers to each open an off-site store and cross sell each other’s products.