The Ontario government recently announced that participating convenience, grocery, and big box stores across the province can sell certain types of alcohol by January 1, 2026. This change will create a more open marketplace for liquor sales and—for some businesses—the opportunity to expand their businesses.
This blog post’ll explore the current regulations surrounding alcohol sales in Ontario and the proposed changes. If you have questions about how these proposed laws will impact your business, consult one of our experienced business law lawyers for guidance.
Who Regulates Alcohol Sales in Ontario?
Alcohol sales in Ontario are currently regulated by the Alcohol and Gaming Commission of Ontario (AGCO). Under the new changes, the AGCO will continue to regulate alcohol sales in Ontario.
An Overview of the Proposed Changes to Alcohol Sales in Ontario
The Ontario government will not renew its Master Framework Agreement with The Beer Store when it expires on December 31, 2025. This agreement previously limited the stores authorized to sell alcohol in the province.
While The Beer Store and LCBO will continue to sell alcohol, the changes mean that other provincial businesses can sell alcohol to consumers.
Specifically, participating convenience, grocery, and big box stores in Ontario will be able to sell beer, wine, and other low-alcohol beverages (spirits will continue to be sold by LCBO).
Other Initiatives Relating to the Changes to Alcohol Sales in Ontario
In addition to the changes noted above, the Ontario government includes a number of other proposed initiatives, including:
- The option for private retailers to offer competitive pricing and promotional prices (consistent with relevant regulations).
- Removing restrictions on pack sizes in convenience stores, grocery stores, and big box stores.
- Consulting with relevant stakeholders on the future of recycling in the province beyond 2031.
- Providing support for local beverage alcohol producers.
- Funding to the Ministry of Health to support public health efforts to ensure alcohol is sold and consumed responsibly.
Review the Ontario government’s recent news release for more information on the initiatives relating to these changes.
The Current State of Alcohol Sales in Ontario
While the government’s proposed initiative may be exciting for many business owners, you might wonder what the current regulations say about alcohol sales in Ontario.
Currently, approximately 450 grocery stores in Ontario sell beer and liquor. An additional 225 also sell wine.
The sale of alcohol in retail stores in Ontario is governed by the Liquor Licence and Control Act, 2019, S.O. 2019, c. 15, Sched. 22. This legislation prohibits businesses from selling liquor unless they obtain a license or permit (s. 2).
Obtaining a License to Sell Alcohol
Under s. 3, businesses may apply for a license to sell alcohol in a retail store. Part IV (Licenses to Operate a Retail Store) under O. Reg. 746/21: Licensing of the Liquor Licence and Control Act, 2019, S.O. 2019, c. 15, Sched. 22 outlines the circumstances under which a business can apply to obtain a license to sell alcohol. Part IV also outlines various “classes” of retail stores, including “beer and cider grocery store” and “beer and wine grocery store” licenses.
Limitations on Obtaining a License to Sell Alcohol
Section 78 of O. Reg. 746/21: Licensing limits beer and cider grocery store and beer and wine grocery store licenses in the province. The following limitations are currently in place:
- There cannot be more than 450 beer and cider grocery store licenses and beer and wine grocery store licenses in effect at one time.
- Applicants must be party to a supply agreement with the LCBO for beer and wine or beer and cider for the grocery store seeking the license.
- Businesses cannot obtain a license if they are located within five kilometres of an agency store (a store operated by LCBO).
The Effect of Obtaining a License to Sell Alcohol
If a business successfully obtains a beer and cider grocery store or beer and wine grocery store license in Ontario, they are entitled to sell beer or cider (or beer or wine, depending on the license) in their store. License holders may also serve or offer samples of eligible beer or cider (or beer or wine) within the store.
Conditions on Licenses to Sell Alcohol
Part IV of O. Reg. 746/21: Licensing sets out numerous restrictions for license holders, including, but not limited to, the following:
- Sale hours: license holders may only make liquor available to customers between 7 a.m. and 11 p.m.
- Operations: license holders must continue to operate as an eligible grocery store (as defined in O. Reg. 746/21: Licensing).
- Supply agreement: license holders must enter a supply agreement with LCBO and comply with the terms of that agreement.
- Eligible products: license holders must not sell beer or cider with alcohol content higher than 7.1% by volume or wine with alcohol content higher than 18% by volume, among other items.
- In-person sales: license holders must sell alcohol on the premises. However, they may sell alcohol online if they meet certain conditions.
- Financial interests: license holders are prohibited from selling a brand of beer or wine if they (or their affiliates) have a direct or indirect financial interest in the beer or wine in question.
- Financial benefits: license holders cannot directly or indirectly request financial or non-monetary benefits from beer or wine manufacturers.
To reiterate, the list above is non-exhaustive. To learn more about the conditions of alcohol licenses in Ontario, consult Part IV of O. Reg. 746/21: Licensing and speak with an experienced business law lawyer if you require further guidance.
Conclusion on Alcohol Sales in Ontario
The Ontario government’s recent announcement regarding alcohol sales in Ontario may present great opportunities for grocery stores and other small businesses to provide new services to consumers.
And, for businesses currently seeking a license to sell alcohol (or simply thinking about the impact of these changes), there’s no better time to begin familiarizing yourself with the requirements for alcohol sales in Ontario. As the above information demonstrates, there are significant restrictions on alcohol sales in Ontario, and it’s critical for businesses to consider their eligibility for a license and the requirements they must follow if and when they obtain one.
Trusted Ottawa Business and Administrative Law Lawyers Advising Business Owners
Business owners must contend with various issues daily, from day-to-day operations to more complex legal and regulatory issues. At Tierney Stauffer LLP, we help business owners with comprehensive, forward-thinking, and practical advice. From assistance navigating the regulatory landscape to business disputes, we have extensive experience in all business law matters. To speak with a team member, call us at 1-888-799-8057 or on