Ontario to increase beer fee, hitting Beer Store, private retail, bars, restaurants
Ontario’s liquor agency is increasing a fee it charges brewers, a move that would boost the cost of beer for all retailers, restaurants and bars in the province.
The move by the LCBO comes just days before the provincial election on Thursday.
The LCBO posted information about the fee increase on its website Monday within hours of Ontario PC Leader Doug Ford unveiling a new campaign promise to scrap the province’s mandatory minimum prices for alcohol.
The increase is set to take effect on April 1.
It amounts to a 4.4 per cent jump in what the LCBO calls “cost of service,” a levy that applies to all beer products — whether imported or domestic — sold at retail outlets such as The Beer Store, supermarkets, convenience stores and brewery retail outlets, as well as on beer distributed to bars and restaurants.
For beer sold at a retailer, the fee is currently set at 74.11 cents per litre and would rise to 77.37 cents per litre in April. That translates to a total of $8.78 on a case of 24 “Tall Boy” (473 ml) cans, a 37-cent increase from the current rate.
Retailers are not obligated to pass on the fee increase to consumers, but if they don’t, the hike will eat into their profits.
The cost of service fee levied on beer distributed to bars and restaurants is lower than the fee applied to the retail outlets, but is also set to rise by 4.4 per cent.
CBC News asked the LCBO on Tuesday morning to explain the rationale behind the increase, but the agency has yet to reply.
‘Beer will be more expensive’
Ontario’s craft beer industry is blasting the fee hike, saying it will increase prices for beer drinkers.
“At a time when supporting local has never been more important in the face of U.S. tariffs, these LCBO fee increases are the wrong move at the wrong time,” said Scott Simmons, president of Ontario Craft Brewers, in a statement provided to CBC News.
The fee increases “only mean one thing — beer will be more expensive for consumers,” said Simmons.
He is calling on all parties in the election campaign to commit to reversing the fee increase and to lower other taxes on Ontario-owned craft brewers.
Ontario PC Leader Doug Ford released his party’s election platform on Monday. As CBC’s Lorenda Reddekopp reports, it includes tariff-related proposals and billions of dollars in new spending. However, it’s unclear how a re-elected PC government would pay for it all.
Liberalizing alcohol sales and keeping booze prices down has been a dominant theme of Ford’s time in government.
His move to open alcohol sales to convenience stores last summer will cost taxpayers at least $600 million, according to an analysis by the province’s Financial Accountability Office, released one day before Ford triggered the snap election.
The PC platform released on Monday contained a new promise to scrap Ontario’s long-established minimum retail price for liquor.
In a news conference, Ford described the rationale for Ontario’s minimum-price law — that it prevents over-consumption of alcohol — as “the biggest joke I’ve ever heard.”
Ford said scrapping the minimum price would “put more money back into people’s pockets again, and that’s like a tax break.”
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