Restaurants want in on selling alcohol for off-premise consumption: report

Toronto – Restaurants Canada’s latest Raise the Bar report, which examines liquor policies impacting foodservice and hospitality businesses across Canada, indicates an interest among restaurants in selling alcohol through takeout or delivery.

Seven out of 10 licensed foodservice businesses told the organization they would benefit from being able to sell alcohol to their patrons to enjoy off site, the association said in a news release.

“On-premise sales growth has been flattening out for restaurants in recent years while growth in off-premise sales has been skyrocketing,” said Shanna Munro, president and CEO of Restaurants Canada, in the release. “So it makes sense that licensed operators see the case for expanding their liquor sales off-site as well. In some jurisdictions, third-party services are already allowed to deliver alcohol, but not restaurants. Liquor laws and regulations need to adapt so that foodservice can keep up with modern market realities.”

Progress has been mixed since the last report card from Restaurants Canada in 2017, Restaurants Canada said. Operational realities for licensed establishments seem to be improving in some regions, while getting worse in others.

The full rankings for 2019 are:
B                Alberta
B-               Nova Scotia
B-               Prince Edward Island
B-               Quebec
C                British Columbia
C                Manitoba
C-              Ontario
C-              Saskatchewan
D-              New Brunswick
D-              Newfoundland and Labrador

While most rules impacting how restaurateurs buy and sell liquor come from the provinces, federal policies can still go a long way to help or hinder the operations of licensed foodservice businesses, the association said. For instance, the national tourism strategy established this year was a welcome announcement, as it emphasized the integral role of culinary tourism for promoting the Canadian brand at home and abroad.

Restaurants Canada recommends all jurisdictions either implement or keep in place the following five measures:

1.   Make wholesale pricing available to all liquor licensees, for all types of beverage alcohol products. Currently only restaurateurs in Alberta and on Prince Edward Island have access to discounted wholesale pricing on wine, spirits and beer. Bar and restaurant operators across the rest of the country pay the same as retail customers, and in some cases even more, for at least some types of alcohol.

2.   Modernize liquor legislation to cut red tape and reflect changing market conditions. Outdated laws and regulations that are out of step with modern business practices are still on the books in every province. Liquor rules have not kept pace with evolving market conditions, leaving licensees poorly positioned to survive and thrive in today’s landscape, let alone prepare for the future.

3.   Allow all licensees to sell alcohol for off-site consumption. Why should restaurateurs who are trained and trusted to serve alcoholic beverages within their establishments be restricted from selling those same products to their customers to enjoy off site?

4.   Introduce or preserve a liquor server wage. A wage differential for tipped workers allows restaurateurs to allocate more towards higher wages for non-gratuity earning kitchen staff, who are typically harder to attract and retain.

5.   Reduce excessive markups on beverage alcohol products. The amount of tax collected on liquor in Canada is among the highest in the world. Federal and provincial taxes and fees currently make up nearly 50 per cent of the cost of beer; between 65 and 70 per cent of the final price of wine; and up to 80 per cent of the cost of spirits. In 2017, the federal budget not only increased the excise duties on beverage alcohol products by two per cent, but it also introduced an automatic annual escalator on those duties. As a result, the amount of money that the federal government collects from beer, wine and spirits bought and sold within Canada has been going up every year since without having to face a vote in Parliament.

The full report may be downloaded here.