Ontario Grocers Voice Concerns Over New Rule Mandating Return of Empty Alcohol Containers

When The Village Grocer began selling beer and wine five years ago, it seemed like a perfect addition to its offerings, which already included grocery staples, homemade ice cream, and free-range poultry.

“We thought it was a great match between good food and good wine,” said Brad Fletcher, president of the independently-owned store in Markham, Ont. “Our customers love it.”

However, Fletcher and other Ontario grocers may soon face an end to their alcohol sales. Concerns are rising among retailers over new requirements to take back empty alcoholic beverage containers as part of their sales licenses. These grocers are worried about food safety, labor costs, and space issues and some, like Fletcher, are considering halting alcohol sales altogether.

Starting October 31, grocery stores larger than 4,000 square feet and located more than five kilometers from a Beer Store must accept returns of empty cans and bottles. Stores within that distance, such as The Village Grocer, will have to comply by January 1, 2026. Convenience stores that have recently begun selling alcohol in Ontario are exempt from this rule.

A Walmart in Ancaster, Ont., falling outside the five-kilometer radius, plans to stop selling alcohol next month when the new regulations take effect. Walmart Canada, which holds approximately 60 alcohol sales licenses in the province, declined to comment further.

Fletcher says he will also remove beer and wine from his shelves if the rules do not change by the end of next year. “That is my plan. My hope is that it changes,” he said.

Grocers are particularly concerned that accepting dirty bottles and cans could lead to bad odors, pest infestations, and food safety risks. Processing returns will also increase labor demands, which they argue would be better managed by the Beer Store, which has overseen Ontario’s deposit-return system for decades.

“Some of those bottles have been sitting in garages for years, used as ashtrays or are even broken,” Fletcher said. “… It just doesn’t make sense to us.”

There are around 450 grocery stores in Ontario that sell alcoholic beverages, and in May, the provincial government announced plans to extend alcohol sales to all grocery and convenience stores. To facilitate this, the government agreed to pay $225 million to the Beer Store, controlled by multinational brewers Molson Coors and Anheuser-Busch InBev, to terminate a 10-year contract set to end in December 2025.

The Alcohol and Gaming Commission of Ontario has approved an additional 195 grocery store licenses for alcohol sales, effective October 31. In July, the range of alcoholic products grocery stores could sell expanded to include larger beer pack sizes and ready-to-drink beverages.

Ontario Finance Minister Peter Bethlenfalvy said on Thursday that negotiations with grocers regarding the new system are ongoing, but the government does not plan to alter the recycling requirements. “We’ve made a commitment that these are the requirements,” Bethlenfalvy stated, adding that no retailers have given up their sales licenses yet.

Independently-owned Summerhill Market has opted not to sell alcohol due to the return requirements. Co-owner and vice-president Christy McMullen, who operates six stores in the Greater Toronto Area, cited space concerns as her primary reason for not offering alcohol.

Despite some grocers pulling back, Sobeys parent company Empire Co. Ltd. is applying for more liquor licenses. Spokesperson Karen White-Boswell said the company is still worried about the return requirements but is working with the government to address these concerns. Metro Inc., which sells alcohol at 74 stores in Ontario, declined to comment, while Loblaw Cos. Ltd. did not respond to requests for comment.

Michelle Wasylyshen, spokesperson for the Retail Council of Canada, confirmed that discussions with the government are ongoing. Grocers are hoping for a “more rational” system for collecting empty containers, she said, noting that British Columbia operates a dedicated network of return depots.

In Quebec, where retailers have been required to take back empties for years, the system is transitioning to depot-based returns to ease the burden on stores.

Pierre-Alexandre Blouin, president of the Quebec Food Retailers Association, called the expectation for retailers to handle returns “fundamentally crazy.” Even automated return machines do not solve the issue, as liquids from containers often spill, creating a cleaning and pest control problem for stores.

However, advocacy group Environmental Defence believes that with the expansion of alcohol sales, traffic to the Beer Store may decline, leading to lower return rates. “Unless retailers step up and play their part in the system, you’re going to see a continued erosion of recycling rates,” said Ashley Wallis, associate director at Environmental Defence.

Some retailers, like Giancarlo Trimarchi of Vince’s Market, worry about the financial burden of adapting their stores for returns. With smaller locations and high rent, many independent grocers cannot afford the space or retrofits needed to collect empties without compromising their food operations. Trimarchi is hopeful the government will revise the system by 2026, but if not, he fears the changes will be costly for his business.