Commissioner of Competition advocates for increased competition in alcohol beverage sales in Ontario
By Food in Canada staffRegulation Beverages
In an open letter to the Honourable Rod Phillips, Minister of Finance of Ontario, the Commissioner of Competition, Matthew Boswell, said that Ontario’s recent review of the province’s liquor policy provides an opportunity to increase competition in an important sector.
Current liquor policy in Ontario limits the number of retailers, and makes price competition more difficult, while also hampering some producers from breaking into new markets.
The Competition Bureau supports recommendations, made by a special advisor appointed by the government of Ontario, that could provide retailers equal opportunity to sell their products, encourage price competition, and support proper wholesale pricing. The Ontario special advisor outlined his recommendations in the report, “The Case for Change: Increasing Choice and Expanding Opportunity in Ontario’s Alcohol Sector.”
Similar to what the Commissioner recommended on improving liquor policy in B.C., a proper wholesale pricing system for Ontario bars and restaurants could lead to more product choice, lower prices, and new and innovative products for consumers.
While acknowledging the province’s need to balance policy concerns in areas such as public health and safety with competition, the Commissioner advocates for a less restrictive system that offers Ontarians greater choice.
- The number of grocery stores licensed to sell wine, beer, and cider in Ontario is currently limited to 450. Grocers must meet certain eligibility criteria, such as minimum square footage requirements, to qualify for a license.
- All licensed retailers across Ontario must charge the same price for a product, a practice called uniform pricing.
- Bars and restaurants must purchase from the Liquor Control Board of Ontario (LCBO) and the Beer Store at consumer-level retail prices, as opposed to wholesale prices.
- Distribution and warehouse capacity constraints can restrict new and innovative producers’ ability to market their products and limit consumers’ choice.
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