Ontario grocery stores can now apply for licences to sell beer, wine, cider, and ready-to-drink alcoholic beverages through the Alcohol and Gaming Commission of Ontario (AGCO). Grocery store licences are distinct from convenience store licences and apply to larger retail operations with more than 4,000 square feet of retail floor space.
At Substance Law, we assist grocery store owners, supermarkets, and retail chains with obtaining and maintaining AGCO grocery store alcohol licences throughout Ontario.
Understanding Grocery Store Alcohol Licences in Ontario
Ontario’s alcohol retail framework now permits eligible grocery stores to sell:
- Beer
- Wine
- Cider
- Ready-to-drink alcoholic beverages (RTDs)
The AGCO regulates all grocery store alcohol licences and enforces the rules governing sales, product displays, signage, training, and compliance.
A Grocery Store Licence is specifically intended for retail stores with:
- More than 4,000 square feet of retail floor space
- A primary business focus on groceries and food sales: canned foods, frozen foods, dry goods, fresh fruit, fresh vegetables, meat or meat alternatives, dairy or dairy alternatives, non-alcoholic beverages, baked goods and snack foods.
- A significant inventory of food products available to customers: At least 10,000 square feet OR half of your retail floor space is dedicated to food products (excluding prepared food products that may be consumed on site).
Stores under 4,000 square feet generally require a Convenience Store Licence instead.
Grocery Store Eligibility Requirements
To qualify for a Grocery Store Licence in Ontario, applicants generally must:
- Operate a grocery store with over 4,000 square feet of retail floor space
- Primarily sell food products
- Maintain a substantial inventory of groceries and household food items
- Meet AGCO operational and compliance standards
- Ensure staff involved in alcohol sales are properly trained
- Comply with provincial age verification and responsible sale requirements
The AGCO may inspect the premises before approving the licence application.
Deposit Return Program Requirements
Unlike many convenience stores, grocery stores selling alcohol may also be required to participate in Ontario’s deposit return system for eligible alcohol containers.
Licensed grocery stores need to:
- Accept empty alcohol containers covered by Ontario’s deposit return program
- Refund deposits to consumers
- Store returned containers appropriately
- Follow operational standards established by the LCBO and provincial recycling programs
These obligations can create additional operational, staffing, and storage considerations for grocery retailers planning to sell alcohol. Alternative arrangements may be available by agreement with The Beer Store if approved by the LCBO.
Product Display and Shelf Space Rules
Ontario grocery stores selling alcohol must comply with strict merchandising and display rules.
These rules can include requirements relating to:
- Minimum shelf space allocations for Ontario craft producers
- Separation of alcohol from certain products
- Responsible signage and advertising
- Restrictions on inducements and promotions
- Proper pricing and product labelling
Ontario has also implemented rules requiring a portion of displayed alcohol products to come from eligible craft producers.
Staff Training and Compliance Obligations
Employees involved in alcohol sales must:
- Be at least 18 years old
- Complete approved responsible alcohol sales training such as Smart Serve
- Verify customer identification where required
- Refuse service to intoxicated or underage individuals
Failure to comply with Ontario alcohol laws can result in:
- Monetary penalties
- Licence suspensions
- Licence revocations
- Enforcement proceedings before the AGCO
Maintaining ongoing compliance is critical for grocery store operators.
Applying for a Grocery Store Alcohol Licence
Applications are submitted through the AGCO’s iAGCO online portal. The process typically involves:
- Preparing corporate and store documentation
- Confirming eligibility requirements
- Completing the online application
- Paying applicable AGCO fees
- Undergoing AGCO review and possible inspection
- Completing LCBO onboarding requirements
Applicants should ensure that floor space calculations and operational details are accurate before submission.
How Substance Law Can Help
Substance Law assists grocery store operators across Ontario with:
- Grocery Store Licence applications
- AGCO compliance reviews
- Alcohol retail policy guidance
- Smart Serve and operational compliance advice
- Responding to AGCO investigations or enforcement
- Licence transfers and business acquisitions
- LCBO-related compliance matters
Our firm regularly works with businesses in Ontario’s regulated liquor industry and understands the evolving legal framework governing grocery store alcohol sales.
Contact Substance Law
If you are planning to sell alcohol in your Ontario grocery store, our team can assist you through the licensing and compliance process.
Contact Substance Law to discuss your Grocery Store Licence application and compliance obligations under Ontario liquor laws.
Frequently Asked Questions
Can grocery stores sell alcohol in Ontario?
Yes. Eligible grocery stores in Ontario may apply for a Grocery Store Licence from the AGCO to sell beer, wine, cider, and ready-to-drink beverages. Grocery stores generally need at least 4,000 square feet of retail floor space.
What is the difference between a grocery store licence and a convenience store licence?
A Grocery Store Licence applies to larger retail stores with 4,000 square feet or more of retail floor space. Smaller retail stores generally apply for a Convenience Store Licence instead.
Can grocery stores sell spirits?
No. Grocery stores cannot sell spirits under Ontario’s grocery store alcohol licensing framework. They may sell eligible beer, wine, cider, and ready-to-drink beverages.
Do grocery stores have to accept alcohol container returns?
Yes. Grocery store licensees are required to participate in the Ontario Deposit Return Program and accept eligible empty liquor containers. The AGCO has stated that all grocery store licensees must comply with the deposit return program as of January 1, 2026.
Do convenience stores have the same deposit return obligations?
No. Convenience store licensees are not required to accept empty containers or provide deposit refunds under the Ontario Deposit Return Program.
How much is the AGCO fee for a Grocery Store Licence?
The AGCO requires applicants to pay a licence fee when applying for or renewing a Grocery Store Licence. The AGCO application guide lists the applicable fee and payment requirements.
Do grocery store staff need alcohol sales training?
Yes. Staff involved in handling or selling alcohol must meet Ontario’s training and responsible sale requirements, including age verification and refusing sales where required.
Can grocery stores sell alcohol online?
Yes, licensed grocery stores may sell alcohol online for in-store pickup, curbside pickup, or delivery, subject to Ontario’s alcohol sale rules, permissible hours of sale, inventory rules, and ID checks.
Can a grocery store buy alcohol directly from wineries, breweries, or other retailers?
No. Licensed grocery stores must purchase alcohol through the LCBO’s approved wholesale ordering system and may only sell eligible products available through that system.
Can Substance Law help with a Grocery Store Licence application?
Yes. Substance Law assists grocery store operators with AGCO Grocery Store Licence applications, compliance planning, deposit return obligations, licence renewals, and regulatory issues involving alcohol retail in Ontario.
