Deregulating the Sale of Alcohol in Ontario

Following a report by the Premier’s Advisory Council on Government Assets in 2015, the sale of beverage alcohol products in Ontario was deregulated: in 2016, 60 grocery stores were licensed to sell beer and cider to consumers. The intention was for up to 450 grocery stores to eventually sell beer and cider products, and for 300 of these stores to also sell wine. The move to deregulate the industry was contentious; the province generated substantial tax revenues from its provincially owned liquor stores, and many stakeholders had concerns about expanding the availability of alcohol. <br><br><br><br>Retailers, policy-makers, and consumers faced questions about the role of regulation in a market. The provincial government had been trying to achieve specific historic and public-welfare goals by regulating the sale of alcohol and taxing sales of this controlled substance. Policy-makers needed to consider the impact of deregulation on health care and on tax revenues. Independent grocers wondered whether substituting their current products with beverage alcohol products would boost their overall income; they also wondered what future restrictions the government would place on the sale of beverage alcohol products. The impact of this regulation was felt by consumers and by industry players, including retail stores, restaurants, and alcoholic beverage manufacturers.

This case is designed for both undergraduate and graduate courses in marketing (to discuss the impact of government regulation on competition), government (to discuss the application of government regulation), and strategy (to discuss industry analysis). Following discussion of the case, students will have developed their ability to<ul><li>assess the potential of changing regulations by applying course concepts; <br></li><li>identify the difficulties inherent in altering regulations from a policy-maker's perspective; <br></li><li>assess the role of regulation in industry actions; <br></li><li>discuss the balance between regulation and access; <br></li><li>assess the value that changed regulations can unlock; and <br></li><li>consider the views of consumer decision-making that underlie regulation.</li><ul>

• Deregulation, monopoly, government