EXCLUSIVE – Are Beer Stores Allowed In Quebec? DepQuébec & The Régie At War On The Word “Assortment”

An epic confrontation currently rages on between DepQuébec, a web portal dedicated to Québec dépanneurs, and the legal authorities of the Régie des alcools, des courses et des jeux (RACJ) — Quebec’s regulatory body granting liquor licenses to c-stores — regarding the meaning of the word “assortment” (“variété” in French).

Yes, you read correctly.

The stakes are not trivial though: it is nothing less than figuring out if yes or no, one can legally open and operate a genuine “beer store” in Quebec.

Indeed, last week DepQuébec published a rather shocking article on the existing regulation and conditions required to obtain a liquor license for convenience and grocery stores.

The portal explained, based on rigorous research, that the famous “51% food product” provision – which is very poorly understood in general – actually allows retailers to sell beer and wine without having (almost) any in-store food offering.

Since the minimum of food offering required is $3,000, one only needs to keep a can of caviar at $2,500 and two bags of expensive coffee at $ 300 apiece (these products do actually exist and are on sale on Amazon.ca – see here) and there you go. One can sell all the beer and wine in the world without worrying for a second about ordering bananas, cheeses, bread or anything to eat.

As expected, the RACJ did not share our interpretation at all.

In the wake of the article, the Régie received “lots of inquiries” from industry people asking to confirm our well founded claims (a reaction that, you may note, reflects the undeniable impact of this portal).

Last Monday, one of Régie‘s executives (whose name we won’t reveal) contacted DepQuébec asking us to reestablish the facts.

After having assured him that this would be the case if such thing was justified, an intense discussion then ensued which we will briefly summarize here.

The Régie: There is not a chance in a thousand that we approve a liquor license for a convenience store that would only sell a can of caviar and two bags of coffee!

DepQuébec: And why not? The total exceeds $3,000 in retail value. It’s the only thing that matters, retail value.

The Régie: No: it takes “an assortment of foods having a value of at least $3,000”.

DepQuébec: Really? An assortment? And how many different kinds of products does “an assortment” means? Do you have a number?

The Régie: Uh … an expert will get back to you on that.

End of conversation. This was three days ago.

So as you can see, their whole case now depends on one single vague word, “assortment”! This remains the only element that could justify a denial.

Now, here is the official definition of the word “assortment” in the dictionary:

Assortment: a collection of assorted things or persons. – Merriam-Webster Dictionary

“A collection of assorted things or persons”. Nowhere it says a lot of things: just a collection of things. In a food offering made of a can of caviar and two bags of coffee, there are three different items separated into two different categories. Technically speaking, we are indeed in the presence of a collection of food products, because there are more than one.

Now let’s suppose that the RACJ denies a liquor license application to a c-store owner that has followed our advice and that he decided to go to court to reverse this decision.

The Régie: Your Honor, “an assortment of food products” means a display of multiple food items, not just a few. This application can’t be approved even if the total retail value actually exceeds $3,000.

The Defense: Your honor: this is totally ridiculous. Imagine. We all agree that 300 different sauces at $10 is indeed an assortment, don’t we? And a 100 sauces at $30… it’s quite an assortment too. Now, 50 sauces at $60, that still qualifies. 25 sauces at $120 each: it’s less of an assortment but still is. What about 10 sauces at $300? There is a certain degree of assortment in there, don’t you think? So what is the magic number below which the word “assortment” no longer applies? 9? 8? 5? 3 and a half? And for God’s sake, who is smart enough on earth to determine this number once for all? Your honor, this one is really easy: from the moment there is a plurality of products and kinds, there is indeed an assortment, period. Please reverse this misguided decision and grant the license to my client, as it should.

Verdict? What do you think?

To us, it is quite evident that there is a gaping loophole in the current regulation. To fix it, the regulation must be revised, something that could take at least a few years, if not more.

The Régie has of course the power to modify certain regulations by itself, without the approval of the National Assembly, but this power is circumscribed in a very precise list (see here) which, at first glance, does not seem to include the conditions under which a permit may or may not be issued to a grocery store. But of course, if it wanted to, the Régie could decide to act anyway and defend itself right until the Supreme Court. Except that it will have to justify its decisions convincingly to the public.

So to all our entrepreneur friends, here lies a fantastic opportunity. Those who have a permit already may get rid of most of their food offering to keep just a few expensive items to reach the minimum required. And those who will have obtained a license and taken advantage of it may obtain a vested right once the regulation is revised, should it be the case.

In the meantime, and three days later, the so-called RACJ expert is nowhere to be seen… to be continued.