TORONTO – The Progressive Conservative government plans to rip up an agreement with The Beer Store in order to allow the sale of beer and wine in corner stores, but employees with the alcohol retailer are warning the move will come with a steep cost.
The government tabled legislation Monday that would terminate a 10-year contract with The Beer Store that was signed by the previous Liberal government. The deal permitted an expansion of beer and wine sales to hundreds of grocery stores.
Premier Doug Ford has repeatedly indicated he plans to put beer and wine in corner stores, but he has to break that agreement to do so. While tabling Monday’s bill, Finance Minister Vic Fedeli said the current system is a monopoly that is a bad deal for consumers and businesses.
Ontario to end Beer Store deal; would pave the way for beer in corner stores
READ MORE: Beer Store launches ad campaign against Ford government as debate around alcohol sales intensifies
“The province’s current beer distribution system is owned by three global giants who were handed a sweetheart deal by the previous government, and who are more interested in protecting profits than providing convenience or choice for average people,” Fedeli said.
The Beer Store and its union have been embarking on a public relations campaign to push back against having beer in corner stores, with the brewers taking out an ad saying they keep prices down with their distribution system, and the union taking out ads warning that cancelling the Beer Store’s deal could cost taxpayers a lot.
Ontario a step closer to corner store beer
In a statement sent to Global News Monday afternoon, Beer Store President Ted Moroz said the company is reviewing legislative details related to the agreement and is considering legal options.
The government cannot extinguish our right to damages as outlined in the Master Framework Agreement. It is critical to understand that The Beer Store has, in good faith, based on a legally-negotiated 10-year operating agreement with the Province of Ontario, invested more than $100 million to modernize its stores and to continue to upgrade the consumer experience,” Moroz wrote.
[The Beer Store] will fight this legislation vigorously through the courts and we remain committed to protecting the 7,000 Ontarians who work at The Beer Store and rely on these jobs to support their families.
The United Food and Commercial Workers local representing Beer Store employees said Monday that the government’s decision could cost thousands of jobs.
“We will fight this government and this premier to keep our jobs and to save the taxpayers the billions Ford is willing to pay to put beer in corner stores,” president John Nock said in a statement.
On Friday, the province’s special adviser on alcohol delivered a report to Fedeli on ways to improve consumer choice and convenience.
The Tories have also announced a number of loosened alcohol restrictions, including allowing alcohol to be served at 9 a.m., seven days a week, letting people consume booze in parks, and legalizing tailgating parties near sports events.
PCs table legislation to end Beer Stores monopoly
#BREAKING: @globalnewsto has obtained the letter lawyers for multiple breweries just sent Attorney General @C_Mulroney in response to @fordnation move to rip up @TheBeerStoreON contract #ONpoli pic.twitter.com/ZjtjWSXzl3
Ford breaking deal with Beer Store to expand sales to corner stores
The Progressive Conservative government has tabled legislation that would terminate a contract with The Beer Store.
The previous Liberal government signed a 10-year deal with the brewers that permitted an expansion of beer and wine sales to hundreds of grocery stores.
Premier Doug Ford has indicated he plans to put beer and wine in corner stores, but he has to break that agreement to do so and the industry has warned that could trigger steep financial penalties.
While tabling today's bill, Finance Minister Vic Fedeli said the current system is a monopoly that is a bad deal for consumers and businesses.
Ontario moves to end Beer Store contract, paving the way for beer in corner stores
The legislation comes after the province's special adviser on alcohol delivered a report Friday to Fedeli on ways to improve consumer choice and convenience.
The Tories also announced a number of loosened alcohol restrictions in last month's budget, including allowing alcohol to be served at 9 a.m., seven days a week, letting people consume booze in parks, and legalizing tailgating parties near sports events.
Video: Finance minister defends tabling legislation to cancel Beer Store contract
Meanwhile, there's been a swift reaction from Labatt Brewing Company Limited and Molson Canada 2005 to the legislation tabled Monday.
The Nipissing MPP did not say how much it would cost to break the contract with The Beer Store, not give a timeline as to when the new outlets would be available to consumers.
CBC Toronto obtained a copy of a lawyers' letter from Labatt and Molson putting the government on notice of a potential legal challenge to the beer legislation. Blake, Cassels and Graydon LLP represent Labatt, while Molson is represented by Gowling WLG.
In the letter, the lawyers note that the 2015 Master Framework Agreement was negotiated with the province to enhance customer convenience, choice and shopping experience, while ensuring that customers in Ontario can purchase beer at prices below the Canadian average, and to enhance the beer retailing system for all brewers selling beer in Ontario.
"The Bill will destroy those benefits, legislate 7,000 Ontario-based The Beer Store employees out of work and cause billions of dollars in damages … and result in higher costs and prices for consumers," the lawyers wrote.
According to the lawyers, their clients are "significant employers" in Ontario and across Canada and have invested significantly in Ontario.
The lawyers say their clients "reserve the right to commence litigation to challenge the Bill, and seek compensation, including on the basis that the legislative process has been improperly used by third party interests, the Bill is unconstitutional and constitutes misfeasance in public office by certain ministers and officials involved, and such other grounds as may be advised."
To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.