Here's why alcohol prices might increase in Ontario in 2026

Hitting up a bar or grabbing beer from a grocery store in 2026 means you might have to shell out a bit more for alcoholic beverages, as new changes to Ontario's marketplace are set to take effect. 

The changes are thanks to the Ford government's move to expand and modernize how alcohol is sold in Ontario. Back in September 2024, all licenced convenience stores in Ontario were permitted to start selling beer, cider, wine, and ready-to-drink beverages.

By the end of October 2024, every eligible convenience, grocery, and big-box grocery store in the province was able to sell beer, cider, wine, and ready-to-drink beverages if they chose to do so.

As part of the expansion, the provincial government gave all retailers a 10 per cent wholesale discount from the LCBO during the interim period before a new pricing structure is revealed in 2026. Earlier in 2025, that discount was temporarily increased to 15 per cent for bars, restaurants, and convenience stores in the face of U.S. tariffs.

In Ontario's 2025 budget, officials said this discount would result in a total estimated savings of approximately $56 million for businesses in the province throughout the year. However, this discount is set to expire on Dec. 31, meaning some businesses in Ontario will be forced to pass on the extra costs to their customers.

Under the new framework, the LCBO will serve as the province's sole wholesaler and apply a pricing formula that layers taxes, markups, and fees onto supplier-set prices, which some say could significantly increase costs for retailers.

Several retailer associations sent a letter to Finance Minister Peter Bethlenfalvy this year requesting that the new model be delayed from its original Jan. 1 implementation date.

"As we analyze the LCBO's proposed pricing model, significant discrepancies have emerged between LCBO's projected impacts and industry estimates of how much prices will increase for retail and hospitality buyers," reads a letter obtained by The Canadian Press. The letter was signed by Restaurants Canada, Beer Canada, The Convenience Industry Council of Canada (CICC), Spirits Canada, and the Ontario Restaurant, Hotel and Motel Association.

According to a survey conducted by CICC this year, the province's expansion of alcohol sales has driven higher foot traffic and been a "real game-changer" for convenience stores, which previously struggled under a massive decrease in cigarette sales.

The survey found that revenue on all products in convenience stores increased by 12 per cent in September compared to last year, and 33 per cent year-over-year on long weekends.

Despite growth for convenience stores, Ontario's expansion of alcohol sales has significantly reduced the Beer Store's footprint, which has seen numerous outlets shutter over the past year, including a handful in Toronto. 

In addition to rising alcohol prices and rampant Beer Store closures, buyers also have far fewer options from independent brewers. Over the past year, local brewers like Beaches Brewing Co., Northern Maverick, Indie Alehouse, and The Aviary Brewpub have all shut down due to a variety of factors, including rising costs, lease issues, and lack of foot traffic. 

Alcohol prices could also increase for consumers next year, thanks to changes in alcohol recycling. Under the alcohol sales expansion announced last year, grocery stores selling alcohol were initially expected to begin accepting empty containers as of Jan. 1.

However, after rising concerns about the logistics, grocers reached an agreement that allows the Beer Store to continue operating the deposit return program. As a result, consumers will continue returning their empties to Beer Store locations, while grocery retailers will help cover the costs associated with the system.

Some retailers have expressed that these additional expenses could be reflected in shelf prices for customers. Grocery stores have also pointed out that they did not receive the temporary increase to a 15 per cent wholesale discount and argue that they had to also face added recycling-related costs, even though convenience stores were not obliged to do the same.