New Beer Laws Could Deter Investors

Have you ever wished there was a more convenient way to buy beer? Maybe you realized you forgot to pick some up on the way home and had to drive several kilometers to the nearest beer store, maybe you were picking up refreshments for a holiday party and had to deal with lineups all the way out the door, maybe you wanted to keep the party going, but you couldn’t find a store that was open beyond 9 p.m. Many of us have been there.

However, the Progressive Conservative government’s decision, a decision which has yet to be passed, to prematurely end their 10-year contract with the Beer Store to allow the sale of beer and wine in convenience store could deter potential investors from opening up their wallets to Ontario according to Rocco Rossi, the CEO of The Ontario Chamber of Commerce.

Potential to Scare Investors

In a recent letter to the Finance Minister, Vic Fideli, Rossi said: “Modernizing the sale of beverage alcohol is an important objective and we support a more competitive marketplace. However, breaking a legitimate contract is a short-sighted approach.”

Leader of the NDP, Andrea Horwath echoes these sentiments, calling the decision to end terminate the contract “shameful.”

“You can’t tear up contracts with the private sector as a government then expect investment to be stable in our province,” she said.

PC’s Not Flinching

In response, Fideli disagreed with Rocco’s and Horwath’s claims, citing the fact Fitch Ratings agency has upgraded Ontario’s rating outlook from negative to stable.

“This came out days after we launched our legislation. The Ontario Chamber of Commerce should join us in supporting consumers, supporting businesses and supporting our craft brewers,” he said.

Fideli has been critical of the agreement currently in place, calling it a “Sweetheart deal,” and claiming it’s bad for consumers.

More Planning

While Rossi has supported the government thus far, he is leery of this decision, and he indicated he would prefer to see a clear indication the Provincial government knows what they’re doing in the form of a business plan regarding the future of alcohol sales in Ontario.

“Our members believe that the government of Ontario must take a strategic—rather than piecemeal—approach to alcohol policy, one which aims to serve both the industry and consumers fairly,” he said.

What’s Next?

The new legislation is expected to pass before the government rises for summer break. If it does, it could be expensive for the province, as it would result in substantial financial penalties.

Despite the fact the legislation includes language that would nullify any costs due to terminating the contract, Beer Store representatives have indicated they will fight the legislation in court.

The previous agreement gave the Beer Store the exclusive ability to sell 24- and 12-packs in the province, while grocery stores could only sell singles and six-packs.

The new deal could also negatively impact small breweries, as the previous agreement required more space for craft brewers.