Bottle shops offer unique alcohol options, but how they're allowed to operate raises questions

Two bottle shops in Waterloo region are offering a wide selection of craft beer, wine and spirits to people with the order of some food — a concept that's raised questions about how shops not attached to a brewery, cidery or winery are allowed to operate in Ontario.

Old Galt Bottle Shop in Cambridge opened last month and is already attracting a lot of attention, says co-owner Rob Quilty. 

"It's been a whirlwind," he said in an interview. "This is going to be our fourth week of being open, and so far so good. I think we've had a really positive response and everybody's really enjoyed what we've been offering so far."

The other bottle shop in this Ontario region has been around for a full year. The Sidewalk Beer Shop is in conjunction with the Princess Café in uptown Waterloo, and owner-operator Marc Lecompte says they've expanded from one fridge to three over the past year.

"We are still doing our regular café offerings, sandwiches and coffees and everything. But we really leaned into the bottle shop," he said.

"We started with one little fridge and our opening shop lineup was 15 different beers. And then when we opened up for our anniversary weekend this past weekend, we had probably about 75 or 80 different types of beer in the fridge."

Lecompte notes they also sell their beer at "bottle shop" prices without a big markup, like restaurants and bars might add.

"The more beer we sell, the lower our prices get. I consider our competition to be the LCBO, not other bars or restaurants," he said, adding they've even brewed their own beers for the shop.

Food must be ordered

The idea of bottle shops is not unique to Waterloo region. They've become popular in Toronto, with establishments like The Bodega, or Thirsty and Miserable in Kensington Market, and several restaurants and bars focusing on the beer and wine sales. There's also the Wheeled Brew Bottle Shop in Barrie that offers pickup service or subscription boxes.

Quilty explained people can't just walk up and buy beer, or wine or spirits — they also have to order some sort of food. Sidewalk Bottle Shop is attached to the café which offers a takeout menu. While Old Galt Bottle Shop has plans for a kitchen in the coming months, for now, they sell inexpensive snacks, including cheese curds and chips.

"We're not trying to do anything against the rules or break any rules. But right now, if somebody comes in to buy alcohol and there is a food component that needs to be included, we have 25 cent Welch's fruit snacks that they can purchase," he said.

Why not convenience stores?

Early on in the pandemic, the province allowed licensed restaurants and bars to sell alcohol with takeout meals as a temporary measure to help businesses during lockdowns. That became permanent as of Jan. 1.

The bottle shops are licensed as restaurants and bars — an important distinction because it's why they can sell chips and beer to people while convenience stores can't do the same.

The province's attorney general says "the primary purpose of the premises" must be "for the sale and service of food or alcohol for consumption on the premises" or else they can't sell alcohol to go. So because people don't eat the chips they buy in a convenience store, they can't buy beer there.

That's frustrating for independently owned convenience store owners, says Dave Bryans, chief executive officer of the Ontario Convenience Stores Association.

"All of a sudden the bars have become — or have twisted the rules — to accommodate themselves. Now, can I blame them? No, not during COVID. It's been very difficult times," he said.

"It started off as a short-term policy by the government [and] has now been extended forever. But someone still has to define: what is the word food, hot food, takeout food, and have that definition."

It's very hard on the small business operators and they're all hanging on for the day that the government stands up and makes some announcements saying, you know what, we're finally going to do what we promised.- Dave Bryans, Ontario Convenience Stores Association

While 7-Eleven has applied to the province to be allowed to serve beer and wine with hot food items, Bryans would like to see that opened up to all convenience stores. He said he's been in talks with the province for nearly a decade to get beer into convenience stores, and the Progressive Conservatives promised it would happen if they won the 2018 election, which they did.

But another issue is a deal signed by the previous Liberal government with The Beer Store, Bryans said, because that agreement allowed beer sales in some grocery stores, but not convenience stores.

"It is frustrating and it's very hard on the small business operators, and they're all hanging on for the day that the government stands up and makes some announcements saying, 'You know what, we're finally going to do what we promised,'" said Bryans.

"It's discouraging and it really is unfair."

Open it up

Quilty said he would have no issue with convenience stores selling beer because he thinks they'd offer something very different to what he's offering people.

"From my experience, you're going to 7-Eleven, they're not selling artisanal bread and cheese from a local cheesemaker. They're selling the staples, the Wonder Bread of the world, the Pepsi, and Coke and the big manufacturers. And I would imagine that would probably be the same when it comes to their beer selections."

Lecompte agrees, saying he spends hours each week curating the beer fridges and driving to various breweries. When he was doing this interview, he was sitting in his car at Badlands Brewery just north of Brampton, where he headed to pick up an order.

He said they also stock beers that aren't available through the LCBO or The Beer Store.

"That's the selling feature of the bottle shop is that you can go to one spot and you can get beers from all over Ontario that you wouldn't be able to get otherwise."

Patios and more to come

Both Old Galt Bottle Shop and Sidewalk Beer Shop plan to open patios this summer. Quilty said they'll grow their wine and spirit selection along with kitchen offerings over the coming weeks, and he hopes they become a destination for people.

"I think our idea and from speaking with local breweries around here is if we can create a destination for craft beer in the Cambridge area, then it helps everybody. You know, we all rise to the top when there's that demand."

Lecompte said the bottle shop will be a big part of the business, even post-pandemic.

"I think that the bottle shop method for us, it will be a large part of how our business moves into the future," he said.

"The patio is great and once we're able to open up inside, we'll have a bit more of a retail portion of the restaurant so that you could come in and shop for beers and go through the fridges yourself and stuff like that, but also still get a sandwich or any of our coffee drinks that we have to be sort of like a hybrid of the two sides of the business."