STEVE RUSSELL - TORONTO STAR
When the Ontario government made the law allowing bottle-shop sales permanent, Benjamin Somers and Dan Grant saw an opportunity. They opened Bossanova at 103 Roncesvalles Avenue.
When the Ontario government created a new law for alcohol sales to help restaurants and bars through COVID-19 lockdowns, it inadvertently led to a whole new type of business: bottle shops.
Restaurants and bars were able to pivot to selling take-out alcohol alongside food and snacks to stay afloat. And when indoor dining reopened, many continued the bottle-shop service. Now, new stand-alone bottle shops offering their own curated selection of alcoholic beverages are beginning to emerge.
Ontario consumers now have a wider variety of products to choose from, but industry experts say the regulations for this new frontier still need work, as many new bottle shops are operating in a grey area.
When the Ontario government made the law allowing bottle-shop sales permanent, Benjamin Somers and Dan Grant saw an opportunity.
The owners of Bossanova, a new bottle shop in Roncesvalles, took advantage of the new rules and became one of the latest additions to Toronto’s bottle shop community. They saw a chance to offer a wider selection of wine and beer to consumers in a new way.
“I started to realize … there’s an opportunity here for something a little bit different,” said Somers.
They aren’t alone.
Nicole Raufeisen, who leads operations for natural wine bottle shop Grape Witches, agrees.
Grape Witches was one of the first dedicated bottle shops to open in Toronto — Somers called them “trailblazers” of Toronto bottle shops — just a few months before the legislation became permanent in December 2020. Raufeisen also heads Grape Witch Imports, the bottle shop’s sister wine agency.
Raufeisen said the bottle shop was initially meant to be a temporary pandemic pivot for Grape Witches. The space was intended for events and wine pop-ups. But when the new rules became permanent, “we were obviously pretty thrilled” to be able to sell wine directly to Torontonians while also offering a patio and a wine club, she said.
But though places such as Grape Witches and Bossanova may look like retailers, legally, they’re not.
There is no business licence designated for bottle shops. Ontario’s law regarding to-go alcohol sales is for restaurants and bars, not retailers. The bottle shop’s primary purpose still has to be as a restaurant or a bar, which is why Bossanova has a bar space for when indoor dining is allowed, Somers said.
Until recently, these bottle shops also had to be able to serve food on the premises. That requirement was waived in November 2021. However, every purchase still must include a food item.
Somers anticipates further regulatory changes.
“They’re definitely incrementally getting there. It will be interesting to see where it lands.”
But the appearance of these bottle shops doesn’t mean the province is out of the equation.
While restaurants and bars often buy standard items from the LCBO or The Beer Store, they usually source harder-to-find products from smaller producers through agencies (like Grape Witch Imports), which facilitate the sale on behalf of the LCBO.
Though sales at the LCBO and Beer Store may be impacted by the increasing number of bottle shops, the province still takes a cut of every bottle sold, regardless of who is selling it, said Sylvain Charlebois, a Dalhousie University professor in food distribution and policy.
The LCBO is in charge of the logistics of importing, shipping, and pricing of alcohol brought in from outside of the province, explained Industry group Drinks Ontario’s executive director Jim Lisser. So the LCBO makes money on all the alcohol sold at a bottle shop, even if the same bottles aren’t on LCBO shelves.
Bossanova makes a point of stocking items not found in LCBO stores — such as wines or beers by smaller producers, said Somers.
And the new discount for wholesale purchases from the LCBO is a “game-changer” for businesses like Bossanova.
Even if bottle shop prices are still often higher than those at the LCBO, they are probably lower than bottles sold on many restaurant menus, Somers said.
Raufeisen thinks further changes in the bottle shop regulatory landscape that move it closer to actual retail are “inevitable.”
“There’s clearly momentum behind it, and there’s consumer support in a major way.”
Essentially, said Charlebois, Ontario has greenlit a pilot project for private alcohol sales in a province that has long been underserved for choice when it comes to alcohol retail.
He also thinks further moves in this direction are certain, noting that even pre-pandemic, that was the case, with alcohol appearing on grocery store shelves in 2015.
James Rilett, vice-president for Central Canada for industry group Restaurants Canada, anticipated this trend as a potential outcome of the new law, which was originally intended to benefit restaurants and bars.
“But it seems to have come up — especially in Toronto — a lot quicker than I thought it would,” he said.
Rilett thinks that as restaurants and bars emerge from the pandemic, many will keep the bottle shops.
“You’ll see more restaurants have a bottle shop as part of their business than you’ll see stand-alone bottle shops.”
Lisser said Ontario has a sophisticated alcohol market, and so the rapid change and acceptance of bottle shops does not surprise him.
The LCBO remains the hub for all businesses selling alcohol, he said, adding he doesn’t think that will change, though the rules may evolve.
“The government, the LCBO and business worked very well together and continue to … look at opportunities to provide choice and convenience,” Lisser said.
Correction — Jan. 18, 2022: This file was updated to correct the spelling of Nicole Raufeisen’s surname.