Ottawa restaurant fighting province’s booze takeout policy closes its doors

One of two Ottawa restaurants that have been fighting to continue selling takeout beer and wine has announced it’s closing its doors, saying it was “unfairly targeted” by the Alcohol and Gaming Commission of Ontario (AGCO).

Mercato Zacconi on Preston Street made the announcement in a Facebook message to customers last week.

“It is with deep regret to inform you that we have made the hard decision to close our doors,” the message read.

“We found ourselves being unfairly targeted by the Alcohol and Gaming Commission of Ontario. This has made our future success unobtainable.”

• 2 restaurants say Ontario unfairly revoked their rights to sell booze

At issue is whether the business is a restaurant or a grocery store, when in fact it’s both.

In 2021, Owner Tony Zacconi expanded his banquet hall business next door in Little italy to include a licensed market and restaurant.

It came after the Ontario government began allowing restaurants to sell takeout alcohol with food orders to help them weather repeated COVID-19 lockdowns.

Mercato Zacconi includes a full-service dining area with a wood-fired pizza oven in a market that sells fresh produce, grocery items and prepared foods. Until recently, its shelves were also stocked with beer and wine.

While restaurants can still sell booze to go, groceries cannot unless food items occupy at least 10,000 square feet of retail floor space.

In April, an AGCO inspector deemed Mercato Zacconi to be a grocery rather than a restaurant and issued its owner a $3,500 fine. In August, Zacconi removed the alcohol from his shelves.

Clampdown ‘decimated’ business

On Tuesday, Zacconi told CBC that has “decimated” his business, costing him an estimated $2,000 a day in sales and forcing him to lay off 40 staff.

“I’m heartbroken, absolutely heartbroken. I really love the store and I love the people I work with, and having to let them go, especially so close to Christmas, has really been tough,” he said.

Pour Decisions: Tapping into Ontario liquor laws

In the depths of the pandemic, the Ontario government gave restaurants a lifeline — making it possible to sell wine and beer to go. But some businesses say their rights to sell booze were revoked unfairly. They say the law is too open to interpretation.

Zacconi believes the provincial rules are “very subjective,” leaving businesses like his at the mercy of AGCO inspectors.

“Why does Eataly get to do it and I don’t?” he asked, naming a popular Toronto business with a similar model.

“I’m being targeted, no question, because there are literally dozens of places in this town right now who are doing exactly the same thing.”

Mercato Zacconi’s notice to customers included the name, email and phone number of the AGCO compliance inspector with whom Zacconi said he’s been dealing.

AGCO responds

While the AGCO initially said it wouldn’t comment on specific cases, last week it issued a statement:

“Over the past two years, the AGCO has offered to work with the owners and representatives of Mercato Zacconi to help them achieve their business goals in a way that meets the requirements of Ontario’s liquor laws.

“The AGCO continues to be available to offer guidance and work collaboratively to ensure measures are in place for the retailer to meet their obligations under the Liquor Licence and Control Act (LLCA).”

On Tuesday, Zacconi called that statement “disingenuous.”

“All they did to ‘work with me’ was tell me that a grocery store’s got to be 10,000 square feet,” he said. “It’s frustrating when the government is tying one hand behind your back.”

Zacconi said he’s attempting to find work for his staff at neighbouring businesses. Mercato Zacconi will close for good on Dec. 31.