Why 7-Eleven's plan to serve alcohol in Ontario sparks concern — and curiosity — in business community

7-Eleven's new plan to sell wine and beer at several Ontario stores is raising both eyebrows and concern in the business community.

Already struggling with COVID-19 restrictions, Ontario bars and restaurants may soon be facing new competition from a powerful, multinational chain of convenience stores.

That's right: it will be restaurants and bars competing with 7-Eleven if its applications are successful. 

The company is applying for licences to sell beer and wine for in-store consumption only. Corner store alcohol sales remain prohibited in Ontario.

"To complement our fresh food and hot food programs, we are preparing for in-store service of a small selection of Ontario-made beer and wine products, offered during limited hours, and in designated consumption areas of our stores," a statement from 7-Eleven Canada reads.

It's seeking liquor licences for 61 Ontario locations, including 14 stores in Toronto. The company says all staff handling wine and beer would be trained under Smart Serve — a provincially approved program that teaches employees how to serve alcohol responsibly.

'Play by the rules,' restaurant association urges

With many small businesses trying to recover from pandemic restrictions, Tony Elenis, president & CEO of the Ontario Restaurant Hotel & Motel Association, says this is "not the best climate to start bringing in competition."

But aside from the timing, Elenis says there's nothing wrong with the plan if it's fairly regulated by the government.

"As long as they play by the rules. They have to follow the health, labour and building rules associated with opening a restaurant," he said.

"It can't just be a side gig they're using as an opportunity to sell booze," he added. 

7-Eleven's fresh and hot food offerings include pizza, fried chicken and hot dogs.

Won't lead to corner store sales: government source

While the details on what the "designated consumption areas" will look like are still unclear, physical changes will have to be made to the stores for the applications to succeed.

"For these locations, a space must be created for the sale, service and consumption of alcohol with food inside the store," said Raymond Kahnert, a senior adviser with the Alcohol and Gaming Commission of Ontario. The AGCO is reviewing 7-Eleven's applications.

Government officials are stressing that the applications are for restaurant-style alcohol sales, not retail. 

The stores would not be eligible for beer and wine takeout, a privilege granted to restaurants during the COVID-19 pandemic, and later made permanent. It requires food preparation and sales to be the primary function of an establishment, as it is with restaurants.

"This is not going to open the floodgates to beer in convenience stores," a senior government source said. 

Premier Doug Ford has repeated his commitment to extending wine and beer sales to corner stores. The 7-Eleven statement says its current applications are "in preparation" for that change.

Could other stores follow?

Ryan Mallough, Ontario director of provincial affairs for the Canadian Federation of Independent Business, says many small business owners will be watching the situation closely, as it calls into question what government regulators consider a restaurant and a meal.

"I will say it is a very novel approach," Mallough said in an interview.

Convenience store owners will be watching with particular interest, Mallough says, perhaps with an eye to following 7-Eleven's lead to serving in-store food and alcohol consumption.

"They are big proponents of expanding liquor sales. I think if they see 7-Eleven be successful on this side, you may see other convenience stores look at this as an avenue into that space," Mallough said.

Many 7-Eleven locations have the benefit of relatively larger buildings that can accommodate a bar or seating area. But Mallough says if there's a business case, even smaller stores could adapt. He points to expanded patio programs, such as Toronto's CafeTO, that allowed restaurants to use streets and sidewalks during the pandemic. 

"A lot of convenience stores are in areas where they may have some sidewalk space or a lane that can be converted into a patio," he said.

Concerns about impaired driving

Many 7-Eleven locations also operate gas bars, so road safety advocates have concerns about those same locations also serving alcohol.

All three of the Mississauga locations for which the company is seeking liquor licenses also sell gas.

"Most licensed establishments aren't attached to a gas station," Mothers Against Drunk Driving CEO Andrew Murie said in an interview.

Murie worries about drivers walking into a 7-Eleven to pay for gas and then having a drink while they're at it, although he's comforted by the fact that employees will be trained.

As well, Murie says Ontario police do a good job of tracking where impaired drivers had their drinks, so 7-Eleven should be mindful.

"They're in our communities," Murie said.

"If they're going to do this, they'll have to be good corporate citizens."

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