A media report suggests that the decision to stock beer in corner stores could end up costing Ontario taxpayers more than $1 billion in a worse case scenario.
That’s a result of a 10-year deal signed by the previous Liberal government with the major breweries that allowed the sale of six-packs in 450 of the province’s 1,500 supermarkets.
Under that 27-page “master framework agreement” (MFA) inked in 2015, the brewers agreed to invest $100 million in upgrading beer outlets over four years and to freeze prices for two years.
But now the PC government wants to renegotiate the deal so beer can be sold in more than 10,000 convenience stores, big-box outlets and supermarkets.
However, industry officials argue that adding thousands of small retail outlets would dramatically increase distribution costs, lowering profit margins for brewers and leading to higher beer prices for consumers.
It is likely that more than a few Beer Stores will close.
If the 450 strong chain of Beer Stores which employs 7,000 unionized workers were to close as a result of dwindling business, Queen’s Park could be on the hook for hundreds of millions in severance payments, pension liabilities and lease termination costs. That is a sobering thought. -CINEWS