Alcohol deregulation is good for consumers and the economy: RCC

Spring 2019 Retail Perspectives report crunches the numbers and finds new alcohol laws could boost sales

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A report from The Retail Council of Canada maintains that Ontario’s new alcohol laws allowing people to buy booze at more locations will stimulate the economy, create new jobs and bring down the price of alcohol.

The Spring 2019 Retail Perspectives report delves into deregulation of the alcohol market in British Columbia and notes that liquor licensing a grocery store increases store sales by an estimated $880,000.

The report states: “That number is significant, in part because of just how under served the Ontario market is. Based on Statistics Canada data, the Province of Ontario only has 2,702 locations that can retail alcohol in one form or another. As pointed out earlier this month in Ontario’s 2019 budget, that represents 2.4 outlets per 10,000 persons ranking us last in the country–and well below the national average of 5.91. To move to the national average, Ontario would need to increase the number of locations by 4,028. Based on this RCC report, if 4,028 new grocery locations could sell alcohol, that would mean an increase to Ontario’s GDP of $3.5 billion a year.”

The report also challenges the notion that deregulation in Ontario will result in job losses and an increase in the price of alcohol.

The Beer Store maintains that opening the market will result in job losses for 7,000 of its full- and part-time staff. While acknowledging the Beer Store will experience cuts, the report maintains this will be countered by an increase of 2.3 staffers at each licensed grocery store. “That means that a move to Canada’s average per capita store count would see a net increase of 9,100 jobs. That means, any job loss that occurs as a result of increased competition by grocers with The Beer Store is more than offset. Even when using The Beer Store’s 7,000 number, the result is still a net increase of 2,100 jobs overall.”

As for pricing, RCC surveyed its membership and found the net-of-tax price of popular beers were an average of 8.3% more expensive in Ontario compared to Quebec: “This suggests that increased choice and convenience can also mean savings for consumers, as large grocers negotiate with suppliers to compete for business.”

According to RCC, Ontario is “dead last” in Canada when it comes to alcohol choice and convenience. Prior polling has shown that 73% of Ontarians support the sale of 12- and 24-packs in grocery stores, and that 68% of Ontarians support the sale of alcohol at all grocery store locations in Ontario.

Ontario Premier Doug Ford is moving ahead with his government’s plan to extend beer and wine sales to corner and big box stores in the province.

In a statement to Global News, Ford spokesperson Simon Jefferies said: “By expanding choice and convenience for Ontario consumers, we are also expanding opportunities for small businesses across the province. Local store owners, brewers and consumers all stand to benefit from an expanded market.”

Earlier this week, The Beer Store launched an ad campaign against the Ford government’s efforts. The ads feature Canadian curler and Beer Store manager Glenn Howard, who maintains the Ford government’s changes would drive up alcohol prices, allow for easier access to alcohol for minors and cause job losses.

The United Food and Commercial Workers Union Canada Local 12R24, the union representing Beer Store employees, also launched an ad campaign criticizing the government’s plans.

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