Government estimates show Beer Store market share plunging while LCBO’s share to soar

The LCBO is chugging The Beer Store’s market share.
The Beer Store’s percentage of Ontario’s alcohol market is expected to plunge to 15 by 2026-27 from 41.1 per cent this year as a result of expanded alcohol retailing, according to provincial government estimates released Thursday.
The LCBO’s share, meanwhile, is forecast to grow to 77.1 per cent from 51.2 per cent, largely as a result of its growing role as a wholesaler to new retail outlets. The estimates,  released as part of the government’s fall economic statement, were prepared by the ministry of finance, based on information provided by the LCBO.
It’s a dramatic fall from grace for the brewery-owned retailer which at its peak controlled 90 per cent of Ontario’s beer market.
In an emailed statement, The Beer Store CEO Roy Benin expressed confidence in the company’s future.
“The Beer Store remains the best place to buy beer and return your empties,” Benin said. “This is a new chapter for The Beer Store, and we’re excited to compete. All of our channels — from distribution to retail to deposit return will continue to deliver for Ontario.”
There was no immediate reaction to the news from the union representing nearly 7,000 full- and part-time Beer Store employees.
Beer and retail industry experts say it’s just another bit of evidence the former juggernaut is on its way out of the retail business.
“I don’t really see any scenario where they have any kind of retail operations beyond 2031,” said author Jordan St. John, who teaches a beer education program at George Brown College.
That year, St. John noted, is when The Beer Store’s contract to operate the Ontario deposit return program ends.
“Right now, the ODRP is a significant part of their revenue,” St. John added. 
The Beer Store’s fate has been up in the air since the government announced it would be expanding alcohol sales to corner stores, grocery stores and big-box retailers such as Costco and Walmart.
Corner store sales began Sept. 5, a week after the government announced it had reached an agreement with The Beer Store to get an early jump on wide-open alcohol retailing that would otherwise have had to wait until the beginning of 2026 when the Master Framework Agreement ends. The province had announced in December that it wouldn’t be renewing the MFA.
Just 405 stores have been granted one of the new grocery store licenses and will be selling alcohol beginning Thursday, according to figures from the Alcohol and Gaming Commission of Ontario.
Another 450 grocery stores across the province were already selling beer and wine under the MFA.
The Beer Store began life as The Brewers Warehousing Company in 1927, the same year Prohibition ended in Ontario.
The Beer Store’s market share has dwindled more quickly since the introduction of the MFA in 2015 allowed grocery stores to bid for beer-selling licences.
In the 2020-21 fiscal year, The Beer Store had just under 63 per cent of the market, according to the LCBO. It’s also seen its number of stores shrink in recent years to 440 from 450. At its peak in the late 1970s and early ’80s, it controlled well over 90 per cent of the beer market in the province, with the LCBO controlling the rest.
As part of the “early implementation agreement” announced in late August, The Beer Store has to keep at least 386 stores open until July 1, 2025. From July 1, 2025, through the end of that year, they have to keep at least 300 stores  open. The following year? There’s no minimum store count mandated.
Retail analyst Lisa Hutcheson said there’s likely to be a quick paring of the store roster after next year, unless The Beer Store radically changes its offerings — something they’ve thus far shown no sign of doing.
“It’s not sustainable in its current form,” said Hutcheson, managing director at retail consultancy J.C. Williams Group. “It’s not a particularly compelling offering at the moment.”
The main selling point in Beer Store ads lately, Hutcheson noted, has been that drinkers can return their empties and get beer in the same place.
“That’s really not enough to get people in,” said Hutcheson.
And when grocery and big box stores start selling beer, wine, cider, and ready to drink cocktails Thursday, they’ll also have to accept empties (although there’s an exemption until Jan. 1 2026 for grocery stores within five kilometres of an existing Beer Store location.) And those grocery stores will have a much wider selection of products, Hutcheson said.
“I think convenience and one-stop shopping is going to rule the day.”