High stakes and last-minute twists: Convenience retailers brace for U.S. booze ban, then get a reprieve
It’s been a tumultuous day for convenience and grocery stores in Ontario with the threat they would no longer be able to order U.S. beverage alcohol products beginning tomorrow, as part of Ontario’s response to U.S. President Donald Trump slapping a 25% tariff on virtually all goods being imported into the U.S. from Canada.
However, U.S. tariffs were paused for 30 days at the 11th hour, saving convenience stores from being forbidden from ordering U.S. beer and wine.
READ: Ontario, Quebec and B.C. among provinces pulling U.S. booze from provincial retailers
Retailers, suppliers and the liquor control boards were working all day to prepare for the new regime when, around 4 pm, Prime Minister Justin Trudeau announced via X that "proposed tariffs" between Canada and the United States will be paused for at least 30 days while the countries work together on the border.
It was an action-packed day with a great deal of uncertainty. CSNC reached out to several stakeholders to find out how they were preparing for the tariffs and what it would mean for the channel.
The Manitoba Liquor and Lotteries (MBLL) initially said it would stop the sale of U.S. products in the province. It later responded to the pause, saying the government was putting plans on hold to remove U.S. alcohol products from liquor stores and cut off American companies from provincial government contracts.
Manitoba Premier Wab Kinew says it shows that Canadians are effective when they stand up for themselves.
In Quebec, the SAQ confirmed it would not be able to supply grocers/convenience stores with American products as of tomorrow, but reversed its decision. Quebec Premier François Legault welcomed the "good news" but lamented that "uncertainty remains."
Legault says "what's annoying" about dealing with Trump "is that there's always this sword hanging over our heads."
Legault adds the events of the past few days show the importance of diversifying markets and limiting Canadian dependence on American exports, but confirmed American products will be coming back to Quebec liquor stores shelves.
Ontario Premier Doug Ford had instructed the LCBO to pull all U.S. booze from its shelves by Feb. 4. That also included the province’s roughly 400 LCBO Convenience Outlet operators in rural areas of the provinces. The importer of record for all U.S. alcohol products into Ontario, the LCBO sells up to $965 million in U.S. alcohol annually. It currently lists more than 3,600 products from 35 U.S. states. Up until the final hour, the LCBO was preparing to release video and photography of U.S. products to be removed from shelves tomorrow.
“The government of Ontario has directed LCBO to indefinitely stop all sales of U.S. alcohol products in store and online and to stop wholesale sales of U.S. products to restaurants, bars, grocery and other retailers, no later than February 4, 2025,” read a statement shared by the LCBO earlier in the day.
However, following Trudeau's announcement, Ontario Premier Doug Ford says that American alcohol products will not be removed from LCBO shelves, now that the tariff threat has been paused for 30 days.
The premier says that if the tariffs are imposed, he will not hesitate to launch retaliatory action, including prohibiting American companies from provincial procurement contracts and taking the booze back off the shelves.
The provincial government initially paused plans to cancel a $100 million contract with Elon Musk's Starlink to improve rural broadband. Ford said he wouldn't work with people who "destroy" Canadian families, incomes and businesses, but has since backtracked.
The Convenience Industry Council of Canada confirmed it is working closely with its retail and vendor members to prepare a response should the tariffs go ahead.
“Ontario’s convenience stores offer a broad enough assortment, including local products, that we are confident that we can continue to meet our customers' needs and provide them with the choice and convenience they rely on us for," the CICC told CSNC in a statement. "Since convenience stores do not sell spirits, which account for a bigger percentage of U.S. alcohol, the impact on our stores will not be as significant. The convenience industry supports the Ontario government's efforts to defend against potential negative economic impacts on retailers, producers, and consumers."
C-stores were going to be able to keep on shelves what has been delivered to date, Kenny Shim, president of the Ontario Convenience Stores Association, told CSNC earlier today. “As far as existing U.S. stock, we’re supposed to sell through what we already have, we just won’t be able to order anymore,” he says. “It will be removed from the [ordering] site.”
Shim says he doesn’t expect the ban on U.S. beverage alcohol products to have a significantly negative impact on c-stores. Anheuser-Busch, for example, is headquartered in the U.S., but its brands including Budweiser, Corona and Stella Artois are made in Canada by Labatt. “That will still be available for us to purchase,” says Shim. “A lot of well-known beer brands popular with Canadians won’t be affected.”
However, a growing online "buy Canada" movement could have consumers voicing their displeasure by boycotting what they perceive to be U.S.-owned brands.
Many companies were working hard to get ahead of the movement, posting to social media about their brands' ties to Canada. At the same time, Canadian-owned brands were taking a moment to fly their flag and tap into the consumer movement.
With the 30-day reprieve, all sides have more time to make plans and strategize should the tariffs go ahead.
-with files from The Canadian Press and Michelle Warren