Ontario allows wine in 300 grocery stores

Ontario is taking the next step to modernize the way it sells alcohol, announcing plans to allow the sale of wine in up to 300 grocery stores, starting with about 70 supermarkets by this fall.

Premier Kathleen Wynne made the announcement at a Toronto Longo's on Thursday, building on her government's expansion of beer sales last year.

An initial block of 70 so-called “universal'' licences for grocery stores to sell wine and beer will be allocated this summer, with an eye to having wine in stores this fall. Grocers will not be permitted to sell wines for cheaper than $10.95.

As was the case with beer licences allocated earlier this year, Ontario will accept bids from grocers interested in selling wine. Of the initial 70 licences, 18 will be reserved for independent grocers, with the remaining 52 to both large chain and independent grocers.

READ: Grocery Gateway now delivers wine and spirits to doorsteps

“At the end of the day, the government sets the framework and it’s our role to negotiate the best deal we can for independents,” said Gary Sands, vice-president of public policy with the Canadian Federation of Independent Grocers. “So within that framework, we’re happy to have 25% of the licences reserved towards independents.”

Anthony Longo, president and CEO of Longo Brothers Fruit Markets, told Canadian Grocer that his company will sit down to discuss its wine strategy in the days to come. The Toronto independent was issued beer licences for two of its stores in Oakville, Ont.

Longo’s also has some first-hand experience selling wine. Its in-store restaurant, Corks, serves craft beer and wine, and last April its online delivery service, Grocery Gateway, added wine and spirits to its lineup.

Of the initial 70 licences for grocery stores, half will be restricted to selling only Ontario Vintners Quality Alliance (VQA) wines for the first three years, while the rest can sell Canadian and international wines as well. After three years those stores' restrictions would be lifted, and every three years the province would roll out a new tranche of Ontario-only licences. Such a rolling license system is aimed at supporting Ontario wineries.

READ: At long last, local wine in Quebec grocery stores

That's something Sands says CFIG’s members do anyway. “When it comes to promoting local, our members are always going to do that to differentiate themselves. They don’t need the government to tell them how much local they need to sell.”

Wine in supermarkets won't be entirely new to shoppers. There are currently 292 wine kiosks operating separately in grocery stores, and up to 150 of those could be converted to beer and wine outlets inside the stores with a shared checkout (still operated by the private wine companies that run them now). Grocery stores that already have a retail wine store will not be eligible for a universal wine and beer licence at the location.

The timeline will ultimately be up to government but recommendations from Ed Clark, the premier's adviser on government assets, suggest that by 2025 Ontario could see beer and wine sold in 300 grocery stores, with a further 150 selling beer only.

READ: Grocery stores dip a tentative toe into beer sales

Wynne also announced that cider can be sold in any grocery store that sells beer, and that the program allowing VQA wines to be sold at farmers' markets will expand to include fruit wines and craft cider.

Small producers of spirits will get to sell directly to bars and restaurants, and will be allowed a greater commission. The Liberal government has made a “fundamental decision'' that “hard liquor'' will not be sold in grocery stores, Wynne said.

Ontario now has more than 240 wineries, with VQA sales in the province totalling $288 million in 2014-15, a 66-per-cent increase in five years. Total wine sales in Ontario amount to about $2.2 billion per year.