Ford to break Beer Store contract today despite potential $1B penalties

May 27 2019, 6:26 pm

The Ford Government introduced legislation today that, if passed, will break the Master Framework Agreement with The Beer Store.

The agreement, intended to last for 10 years, states that the province would ensure that beer is not authorized for sale or distribution in Ontario except for by The Beer Store, the LCBO, stores operated by either, breweries, or duty-free stores.

If the agreement is breached, the document states that a remedy would be required, an option of which is payment of a monetary award by the breaching Party.

“Such an award shall be calculated on the basis of the normal principles of damages for breach of contract,” the document reads. And the damages of beer being sold in the countless convenience stores across the province would, imaginably, be quite costly.

Of the outlets listed in the document’s allowed new private retail outlets, convenience stores are not mentioned. Which means that the sale of beer in corner stores would fall under a “critical breach” of the agreement, potentially requiring financial compensation.

Despite the potential massive financial penalties that could come from such a breach, the aforementioned legislation was introduced on Monday afternoon.

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“The unfair agreement with the Beer Store puts the interests of three large global brewers ahead of Ontario consumers, taxpayers and small businesses,” said Vic Fedeli, Minister of Finance, in the statement.

He goes on to say that the agreement is a bad deal for people in Ontario who want more choice and convenience, and that it’s “deeply unfair” to businesses looking to compete in the sector.

Also on Monday, the government released a report conducted by Ken Hughes, Special Advisor for the Beverage Alcohol Review.

According to the release, the report “details the inconvenience and unfairness of the current system” for Ontarians, and named the agreement with the Beer Store and its private owners to be “the primary obstacle” to achieving a more fair, more convenient alcohol retail system in the province.

The Beer Store has responded to the introduction of this new legislation, stating that it is pursuing its legal options.

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