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“Given the cost and operational complexities of managing alcohol returns, some retailers are reassessing whether it remains viable to continue selling alcohol at all under current or proposed deposit-return conditions,” said Michael Zabaneh, the council’s vice-president of sustainability.

That doesn’t sit well with Ford’s officials and comes as the privately operated The Beer Store is closing outlets across the province. Since 1927, The Beer Store has paid back deposits on empty beer containers and later, on alcohol containers of a certain size.

When retailers applied to the Alcohol and Gaming Commission for a licence to sell beer or wine, they knew that a deposit-return system would be part of the deal, said a source who spoke confidentially in order to share internal discussions. The deposit-return requirement takes effect for all grocery stores on Jan. 1, 2026.

“When you get a licence, as of that date the expectation is you’ll recycle,” the government source said. 

Now that The Beer Store locations are disappearing, without a fully functioning deposit-return system in place, recycling innovators such as Reloop CEO Clarissa Morawski say Ontario is taking consumers’ money by charging deposits on alcohol containers — such as a 20 cent fee on bottles of wine — but offering fewer options to get their money back. 

“To me, that is a government rip-off,” said Morawski, founder of Reloop, which helped the European Union shape legislation for its deposit-return system.

Colin Blachar, a spokesperson for Finance Minister Peter Bethlenfalvy, said last September that the government delivered the” largest expansion of consumer choice and convenience in provincial alcohol sales in nearly century” when it allowed licensed convenience stores to sell alcohol.

In addition to the remaining locations of The Beer Store, Blachar said more than 400 locations including grocery and convenience stores currently participate in the Ontario Deposit Return Program, “with numbers expected to continue to grow over the coming months. This will provide more options to consumers looking to utilize the return system.”

Currently, 1,029 Ontario grocery stores are licensed by the Alcohol and Gaming Commission to sell wine, beer and spirits, the retail council said, which is roughly 38 per cent of the province’s grocery stores. A smaller number of grocery stores are required to offer a return on deposits if they are within a certain distance from a closed Beer Store but the retail council said most are not doing so. 

It is the in-store collection of empty bottles that the big chains don’t want, said the retail council’s Zabaneh.

“Retail settings are not designed to accommodate bulk returns of alcohol containers, posing health and safety risks, space constraints, staffing discomfort and product contamination issues,” he said. 

“The focus of the program must remain on achieving optimal environmental outcomes in a way that is financially and operationally sustainable for Ontarians,â€� he said, adding that he existing $0.02 per container compensation is “insufficient to support the capital upgrades, staffing, and logistics required to manage returns in a safe, hygienic and efficient manner.”

Zabaneh said the stores support increased collection and recycling, but that it “must be done in partnership with alcohol producers” and use models such as centralized drop-off depots and reverse-vending machines. He said the blue box program could also be used “for easily recyclable material like aluminum cans.” However, the retail council said the grocery stores “do not believe placing reusable glass containers in the blue box is an option.”

Karen Wirsig, of Environmental Defence, said recyclers have told her that glass does not do well in the blue box system because it breaks and contaminates other materials. 

Wirsig said the Ontario government needs to sit down with the retailers and producers to work out an arrangement that keeps the deposit return system alive. If grocery stores continue to sell alcohol in defiance of the rules starting in January, Ontario has to take action against them, she said. 

While Ford promised liberalization of alcohol sales during the 2018 election campaign, he was unable to keep that pledge until last September when his government paid The Beer Store $225 million to break a 10-year “master framework agreement� with the major brewers. That was the deal that former Liberal premier Kathleen Wynne had signed in 2015 allowing wine and six-packs of beer in 450 supermarkets.

Ford wanted to expand sales further in time for the snap election his Progressive Conservatives won on Feb. 27 instead of waiting for Wynne’s accord to expire at the end of this year.

But the Financial Accountability Office of Ontario estimated it will end up costing taxpayers an additional $612 million to break that contract with the beer giants and allow the sale of suds, including cases of 24 that had been the exclusive purview of The Beer Store, cider, wine and premixed cocktails at any supermarket licensed to sell them.

Leaders in the deposit return realm, such as Morawski, say that Ontario’s once grand plan for such a system could have inspired soaring recycling rates but now, with The Beer Store’s expertise seemingly lost and the pushback from retailers unhappy with their options, it appears to be in decline.

“It is the death of a highly successful deposit-return system in Canada,” she said.

With files from Robert Benzie