Allow licensed independent craft producers to sell beverage alcohol online in Ontario

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As Ontario’s small businesses fight for survival during the current COVID-19 emergency, the Independent Craft Producers of Ontario (ICPO) is calling on the Ford government to allow Ontario’s newest and some of the smallest alcohol producers to conduct direct online sales and deliver their products directly to homes.

These 100 producers commonly known as “contract producers” are all fully licensed by the Alcohol and Gaming Commission of Ontario (AGCO) yet do not yet have physical breweries or stores. Pre-pandemic, there were no clear regulations on online alcohol sales, but in September the AGCO mandated that a producer must have a pre-existing physical brewery and store to enact e-commerce. That requirement prevents these newer companies from participating in any e-commerce which is devastating during the pandemic.

The result is that these newer producers are being shut out of distributing their product to their customers while thousands of Ontario bars, restaurants and more established, bigger breweries are free to conduct direct online sales. Consequently, Ontario consumers have no online or home delivery access to almost 1,000 made-in-Ontario products from some of the province’s most innovative beer, cider and distilled spirits producers.  Current government policies clearly favour bigger, more established companies. This is a huge lost opportunity for these small producers as online alcohol sales grew by 80% in 2020  (U.S. data) and 44% of consumers bought alcohol online or the very first time last year.

Fueled by a passion for well-made, hand-crafted products, ICPO’s producers are duplicating the path of virtually every established brewery in first contracting with host breweries to make their distinctive recipes. They follow the same AGCO regulations & policies, brewing practices, taxation, and reporting requirements as physical brewers, and they hold the same manufacturing licenses for sales. But they have been excluded from the government’s relaxed restrictions which enable their brick-and-mortar colleagues  - plus thousands of bars and restaurants -  to sell and deliver their product to customers during the pandemic.

The lack of direct sales channels has been devastating for these small businesses who largely rely on sales to retailers, licensed bars & restaurants and events as their primary revenue stream. Much like the licensees they supply, contract producers have been hard hit by reduced on-site alcohol sales due to lockdowns and limited seating capacity, as well as the cancellation of special events, festivals and corporate gatherings. Unlike the licensees they supply, who are now able to sell ICPO member products online, ICPO member pleas  to sell online have been ignored. The Ontario government has made no effort to temporarily ease the restrictions to help save these small companies and serve their customers who now have no choice but to enter retail stores to buy these 1,000 products.