Ontario to Increase Beer Fee, Impacting Retailers, Bars, and Consumers

Ontario’s Liquor Control Board (LCBO) will implement a 4.4% increase in its “cost of service” fee on beer starting April 1, 2025. The decision affects beer prices across the province, including sales at retail outlets, bars, and restaurants.

The fee increase comes just days before Ontario’s provincial election and shortly after Premier Doug Ford announced plans to eliminate the province’s minimum-price laws for alcohol if re-elected. The LCBO posted details of the increase hours after Ford’s campaign promise, raising questions about the timing of the announcement.

Details of the Fee Increase

The “cost of service” fee applies to all beer sold through various channels, including:

The Beer Store
Supermarkets and convenience stores
Brewery retail outlets
Bars and restaurants

Currently, the fee is 74.11 cents per litre. The upcoming increase will raise it to 77.37 cents per litre. For consumers, this means a 24-pack of 473 ml cans will carry an additional 37-cent cost, totaling $8.78 in service fees.

The LCBO has not provided a public explanation for the increase.

Retailers and Bars Brace for Price Hikes

While retailers are not required to pass the increase onto customers, absorbing the cost could significantly reduce profit margins. Industry experts predict most retailers will raise beer prices to offset the fee. Bars and restaurants, which already pay a lower service fee, will also see the 4.4% increase applied to their orders.

Craft Brewers Criticize the Decision

Ontario’s craft beer industry has expressed strong opposition to the fee hike.

“At a time when supporting local has never been more important, these fee increases are the wrong move at the wrong time,” said Scott Simmons, president of Ontario Craft Brewers.

Simmons emphasized that beer drinkers will ultimately pay more and urged political leaders to reverse the decision. He also called for broader reforms to alcohol taxation, particularly for small Ontario-based breweries.

Political Reactions and Election Context

Premier Doug Ford, campaigning for re-election, has focused on liberalizing alcohol sales and reducing costs for consumers. Ford’s pledge to scrap Ontario’s minimum alcohol pricing is positioned as a cost-saving measure.

“Scrapping the minimum price would put more money back into people’s pockets. It’s like a tax break,” Ford said during a recent press conference.

However, Ford’s government has faced scrutiny over the financial implications of expanding alcohol sales. The Financial Accountability Office of Ontario estimates that changes to alcohol distribution will cost taxpayers approximately $600 million.

Following the LCBO’s announcement, a spokesperson for Ford’s campaign stated that a re-elected Progressive Conservative government would not proceed with the fee increase.

What Does This Mean for Consumers?

If the increase goes ahead, beer prices are expected to rise province-wide. Retailers and hospitality businesses may pass the added cost to customers, making beer more expensive at stores, bars, and restaurants.

Consumers could see price changes starting April 1, 2025 unless the incoming provincial government reverses the decision.

Looking Ahead

With the provincial election approaching, the beer fee increase has become a politically charged issue. Ontario residents can expect further announcements in the coming weeks as candidates address cost-of-living concerns and the affordability of alcohol.

For the latest information, visit the LCBO website or check local news outlets.

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