Jan Wong: Why the LCBO—the antiquated, paternalistic monopoly that’s deliberately gouging us—has got to go
On a recent Sunday afternoon, I stopped by the LCBO’s flagship Summerhill store.
A glorious 35,000 square feet of creamy Italian porcelain floors and sparkling lights, the refurbished Canadian Pacific Railway station is adjacent to a cluster of gourmet shops that affluent shoppers call “The Five Thieves.” Here you pay dearly for ready-to-heat osso buco or a square of chocolate cake sprinkled with edible gold leaf. Despite its prime location, this outlet, the LCBO’s largest, is no pricier than any other location in the province. You pay the same fixed $12.60 for a 2009 Louis Bernard Côtes du Rhône here as you would at Scarborough’s lowly Cedarbrae Mall.
Nice, huh? But wait—you and I are paying for those pot lights, the Martha Stewart–style test kitchen (used for cooking demos and wine appreciation classes) and the standalone tasting bar, not to mention the lease on this prime piece of real estate. We all pay—whether we’re teetotalers or boozehounds—because higher overhead reduces the annual dividend the LCBO remits to the province. That in turn means less money for everything from social services to infrastructure.
According to a recent report by Ontario’s Auditor General, Jim McCarter, the liquor monopoly is also minimizing profits by failing to use its enormous clout to negotiate the lowest possible wholesale prices from suppliers. Instead, the LCBO does something unique among retailers. It decides on the retail price it wants to charge for a product, and then asks suppliers to raise or lower their wholesale costs accordingly. Why? The LCBO claims it’s merely fulfilling its duty to be socially responsible—that by keeping prices high, it’s trying to discourage consumption. And yet, as McCarter reported, alcohol sales have gone up 67 per cent in the last decade.
LCBO. It rolls off the tongue like an unoaked chardonnay, lulling us into overlooking what the initials actually stand for: Liquor Control Board of Ontario. The LCBO’s motto might as well be, Drink lots! But not too much! To understand its conflicted ethos, you have to go back to 1927, the year Ontario emerged from Prohibition. Still fretting that unfettered liquor sales and low-priced alcohol would lead to alcoholism, crime and general chaos, Queen’s Park primly established a state monopoly with a
mandate: temperance.
Today, the LCBO downplays the control aspect while struggling to satisfy its dual mandate of turning a profit without turning people into drunkards. The subliminal message of Food and Drink, the LCBO’s free magazine, remains paternalistic: don’t drink on an empty stomach. The hypocrisy is astounding. The LCBO goes further than most stores in trying to persuade you to buy its product for every social occasion short of a toddler’s birthday party. What other retailer has dreamed up 300 styles of gift bags, boxes and bottle-friendly containers in the past five years? Chris Layton, an LCBO spokesman, says the gift bags earn $3.5 million a year—although consumer interest is now shifting to gift cards.
According to Layton, Food and Drink is the LCBO’s single most popular marketing initiative. Six times a year, the LCBO prints 500,000 English copies and 20,000 French copies on glossy 60-pound stock. It turns a comfortable annual profit of $350,000 to $400,000 after expenses. Here’s one of the secrets to its success: wineries must submit marketing plans—including how much they will spend on advertising in Food and Drink—before they can obtain coveted shelf space at the LCBO. Food and Drink competes for scarce advertising dollars against private-sector magazines that aren’t bankrolled by
government monopolies.
Truth be told, Torontonians would buy alcohol without any encouragement from fancy stores or glossy magazines. If we could save money, I’m fairly certain we’d shop at a no-frills warehouse with fluorescent lights. To get an idea of how monolithic the LCBO is, I checked out another monolithic retailer, but one that offers the warehouse shopping experience: Costco. First, consider that Ontario’s population is a tiny fraction of that of the U.S.—4.1 per cent. Then note that while Costco is one of the biggest wine retailers in the U.S., it must compete with thousands of private liquor stores. Now check out these numbers: last year Costco grossed $1.3 billion (U.S.) in wine sales; the LCBO’s wine sales grossed $1.58 billion, according to its most recent annual report. Despite its much smaller territory and consumer base, the LCBO actually eclipses that other monolith to the south, Costco.
In fiscal 2010–2011, the monopoly paid a dividend of $1.55 billion to the Ontario government. It was the 17th consecutive record annual dividend, and it does not include the various taxes levied (a total of $749 million). The annual report also lays bare the secret behind the LCBO’s profit margins: we’re paying double. At Costco, a bottle of Woodbridge sauvignon blanc costs $6.99; at the LCBO it’s $11.95. Costco sells Veuve Clicquot for $38.99 a bottle; the LCBO charges $66.30. When I asked for pricing examples for table wine, some markups were 137 per cent. For a wine that retails for $10.45 (the LCBO didn’t provide actual product names), it pays wholesalers $3.77 if it’s a U.S. or non-Ontario Canadian wine; $3.72 if it’s another imported wine; and $4.10 if it’s Ontario wine. And these wholesale prices may be inflated.
This is the LCBO’s 85th year in existence. Most Torontonians alive have only known a government monopoly, so it’s hard to imagine freedom. But we can look to Alberta, which dismantled its provincial monopoly 19 years ago. Pillaging and mayhem did not ensue. Instead, privatization led to greater consumer choice—eight times the number of products and double the number of retailers. Revenue collected by the province includes a government markup, which varies depending on the product type and alcohol percentage. In 2011, Alberta’s liquor revenue totalled $683.5 million.
Monopolies are so last century. To understand the absurdity of state-controlled liquor sales, imagine if Queen’s Park decided obesity was the number one health risk and established an Obesity Control Board of Ontario. It shuts down McDonald’s, Burger King and Wendy’s. Only the OCBO can supply burgers because, you know, children might eat them. Without competition, the price of a meal deal soon doubles, then triples. With these—forgive me—fat profit margins, the OCBO begins decorating its burger outlets with crystal chandeliers. It publishes a glossy fast-food magazine. And everyone lives happily ever after because the province is raking in millions of dollars in dividends.
Profligate spending is how a monopoly behaves when it isn’t permitted to keep all the lucre for itself. And this at a time when the Ontario government is desperately trying to find ways to save money. In his recent report, the former TD Bank economist Don Drummond recommended selling the LCBO’s headquarters overlooking Lake Ontario. That would be but a drop in the wine bucket. In the coming fiscal year, the LCBO will open 37 new or relocated stores, bringing the total number of outlets to 636. Konrad Ejbich, a wine writer and expert, calls our state-run liquor monopoly “the last vestige of communism in Ontario.” It’s been 85 years since Prohibition ended and a quarter-century since the fall of the Berlin Wall. It’s time to dismantle the LCBO.
 and the standalone tasting bar, not to mention the lease on this prime piece of real estate. We all pay—whether we’re teetotalers or boozehounds—because higher overhead reduces the annual dividend the LCBO remits to the province. That in turn means less money for everything from social services to infrastructure.
According to a recent report by Ontario’s Auditor General, Jim McCarter, the liquor monopoly is also minimizing profits by failing to use its enormous clout to negotiate the lowest possible wholesale prices from suppliers. Instead, the LCBO does something unique among retailers. It decides on the retail price it wants to charge for a product, and then asks suppliers to raise or lower their wholesale costs accordingly. Why? The LCBO claims it’s merely fulfilling its duty to be socially responsible—that by keeping prices high, it’s trying to discourage consumption. And yet, as McCarter reported, alcohol sales have gone up 67 per cent in the last decade.
LCBO. It rolls off the tongue like an unoaked chardonnay, lulling us into overlooking what the initials actually stand for: Liquor Control Board of Ontario. The LCBO’s motto might as well be, Drink lots! But not too much! To understand its conflicted ethos, you have to go back to 1927, the year Ontario emerged from Prohibition. Still fretting that unfettered liquor sales and low-priced alcohol would lead to alcoholism, crime and general chaos, Queen’s Park primly established a state monopoly with a
mandate: temperance.
Today, the LCBO downplays the control aspect while struggling to satisfy its dual mandate of turning a profit without turning people into drunkards. The subliminal message of Food and Drink, the LCBO’s free magazine, remains paternalistic: don’t drink on an empty stomach. The hypocrisy is astounding. The LCBO goes further than most stores in trying to persuade you to buy its product for every social occasion short of a toddler’s birthday party. What other retailer has dreamed up 300 styles of gift bags, boxes and bottle-friendly containers in the past five years? Chris Layton, an LCBO spokesman, says the gift bags earn $3.5 million a year—although consumer interest is now shifting to gift cards.
According to Layton, Food and Drink is the LCBO’s single most popular marketing initiative. Six times a year, the LCBO prints 500,000 English copies and 20,000 French copies on glossy 60-pound stock. It turns a comfortable annual profit of $350,000 to $400,000 after expenses. Here’s one of the secrets to its success: wineries must submit marketing plans—including how much they will spend on advertising in Food and Drink—before they can obtain coveted shelf space at the LCBO. Food and Drink competes for scarce advertising dollars against private-sector magazines that aren’t bankrolled by
government monopolies.
Truth be told, Torontonians would buy alcohol without any encouragement from fancy stores or glossy magazines. If we could save money, I’m fairly certain we’d shop at a no-frills warehouse with fluorescent lights. To get an idea of how monolithic the LCBO is, I checked out another monolithic retailer, but one that offers the warehouse shopping experience: Costco. First, consider that Ontario’s population is a tiny fraction of that of the U.S.—4.1 per cent. Then note that while Costco is one of the biggest wine retailers in the U.S., it must compete with thousands of private liquor stores. Now check out these numbers: last year Costco grossed $1.3 billion (U.S.) in wine sales; the LCBO’s wine sales grossed $1.58 billion, according to its most recent annual report. Despite its much smaller territory and consumer base, the LCBO actually eclipses that other monolith to the south, Costco.
In fiscal 2010–2011, the monopoly paid a dividend of $1.55 billion to the Ontario government. It was the 17th consecutive record annual dividend, and it does not include the various taxes levied (a total of $749 million). The annual report also lays bare the secret behind the LCBO’s profit margins: we’re paying double. At Costco, a bottle of Woodbridge sauvignon blanc costs $6.99; at the LCBO it’s $11.95. Costco sells Veuve Clicquot for $38.99 a bottle; the LCBO charges $66.30. When I asked for pricing examples for table wine, some markups were 137 per cent. For a wine that retails for $10.45 (the LCBO didn’t provide actual product names), it pays wholesalers $3.77 if it’s a U.S. or non-Ontario Canadian wine; $3.72 if it’s another imported wine; and $4.10 if it’s Ontario wine. And these wholesale prices may be inflated.
This is the LCBO’s 85th year in existence. Most Torontonians alive have only known a government monopoly, so it’s hard to imagine freedom. But we can look to Alberta, which dismantled its provincial monopoly 19 years ago. Pillaging and mayhem did not ensue. Instead, privatization led to greater consumer choice—eight times the number of products and double the number of retailers. Revenue collected by the province includes a government markup, which varies depending on the product type and alcohol percentage. In 2011, Alberta’s liquor revenue totalled $683.5 million.
Monopolies are so last century. To understand the absurdity of state-controlled liquor sales, imagine if Queen’s Park decided obesity was the number one health risk and established an Obesity Control Board of Ontario. It shuts down McDonald’s, Burger King and Wendy’s. Only the OCBO can supply burgers because, you know, children might eat them. Without competition, the price of a meal deal soon doubles, then triples. With these—forgive me—fat profit margins, the OCBO begins decorating its burger outlets with crystal chandeliers. It publishes a glossy fast-food magazine. And everyone lives happily ever after because the province is raking in millions of dollars in dividends.
Profligate spending is how a monopoly behaves when it isn’t permitted to keep all the lucre for itself. And this at a time when the Ontario government is desperately trying to find ways to save money. In his recent report, the former TD Bank economist Don Drummond recommended selling the LCBO’s headquarters overlooking Lake Ontario. That would be but a drop in the wine bucket. In the coming fiscal year, the LCBO will open 37 new or relocated stores, bringing the total number of outlets to 636. Konrad Ejbich, a wine writer and expert, calls our state-run liquor monopoly “the last vestige of communism in Ontario.” It’s been 85 years since Prohibition ended and a quarter-century since the fall of the Berlin Wall. It’s time to dismantle the LCBO.){kind=link}
Its 2012. The lack of freedom of choice is astounding. There is ZERO reason why the government should legally be allowed to control our choice of what we drink. The seasonal beer releases, which are chosen by a committee based on what the LCBO THINKS consumers will like, reeks of socialism. What a farce.
Start small, allow all grocery stores to sell a small selection of local Ontario beer/wine(not stores within a store). Then allow a few independent wine only stores open, go from there. Dismantling the largest single alcohol purchaser/retailer in the world can’t happen overnight.
oh whatever…..the author has an axe to grind with LCBO but the fact of the matter is right now it works….they ‘dress up’ the stores and publish glossy magazines to make you spend more and it works, the selection on the shelves could be better BUT like any good business they react to what the market will bear….ask any of the fellows working in the Vintages section….they routinely put out small smaples of ‘beach head’ wines and spirits to gauge customer reaction…if it doesn’t sell, you won’t see it on the shelves again. You really think small shops will have the purchasing power as an LCBO?…do you really think small shops can go to the outer reaches of wine growing regions in the world and carry small batches of trendy wines so you can just peruse over them, feel good about the choice and then pick up your tried and true ‘woodbridge sauvignon’. This is probably the one business the government is involved in and they are doing it right and the author wants to get rid of it.
The author fails to mention that Alberta has no tax….a big reason there a difference in price and NOT the fact that its privately owned. Remove the provincial taxes altogher (which will never happen public or private) and we’d probably be buying wines at similar prices.
Brilliant article that needs to be shared south of the border.
Alberta booze prices are higher than Ontario, check the Web. “south of the border” is not an entity, each state can be different. You can’t buy alcohol in a grocery store in New York state.
Why just compare to Alberta. Quebec has been selling bber & wine in grocery/convenience stores for eons. Doesn’t seem to be a problem there.
And what about the millions of dollars that it’s making for the provincial government which then goes to fund healthcare and other vital services? It should absolutely remain the way it is so that the government does not lose millions from its budget and then have to slash heathcare and other social services.
We usually enjoy Jan Wong’s articles but this one has gone way off the rails. Somehow we doubt that Jan drinks.
The Summerhill store is a world class store. The volume it sells pays for the frills. We have shopped around the world and rarely have experienced the variety of product at competitive prices presented by knowledgeable staff in an attractive setting.
We have always heard that the LCBO uses its volume buying to the advantage of Ontario consumers. Jan claims otherwise. We have rarely found better prices in other jurisdictions. We have never had the impression that the LCBO jacks the price to discourage drinking.
We should praise the LCBO for the brilliant job they have done with the Summerhill store. It has added to the pleasure of living in downtown Toronto.
I agree — Jan Wong is wrong on this. Like other commenters, I’ve traveled and seen what other jurisdictions do, both here, the US and in Europe. The LCBO works.
What doesn’t work is some of legislation surrounding the purchase and sale of alcohol, some of it still reflecting our love affair with the temperance movement. So let’s change that instead.
Let the LCBO coexist with some modicum of competition: allow people to import wine and beer and alcohol…allow it to be sold in businesses outside of the LCBO.
As for the auditor general’s comment about using buying clout. Bulk discount buying power? Sure. But be careful: hello WalMart and hello drug shortages of all sorts all across Canada because of so called buying power/clout that forces producers who can only mass produce product. Not only is there a quality issue, but it penalizes smaller players, which in the production of wine, beer and alcohol, are a good number. Maybe it works for manufactured widgets, and processed foodstuffs. Maybe. What it seems like is that the AG is in favour of applying bully economics to wine, beer and spirits. Typical and an incredibly dumb, dumb, dumb suggestion. Auditors look at money and efficiencies, but look at the systems, network science of it, cause and effect, please and thank you.
Of all government agencies, LCBO is the only one to reinvent itself and to do it reasonably well. And the Summerhill store is a flagship store, an important part of the community, an architectural icon, and a great place to find all sorts of interesting wines and spirits. The staff are knowledgeable and friendly. It’s a great experience to shop there — you wouldn’t know it was related in any way to something government.
The LCBO is a huge monopoly, supported by antiquated legislation. it does a good job. The government gets a good portion of the revenue from taxes — which makes product more expensive than it need be. So change things up: change the legislation, and allow other distributers and sellers.
I must disagree with author Wong. When I first moved to Massachusetts 25 years ago, I reveled for a while at four times the choices, before I realized that a good number of these were horrible choices.
I drank more bad wine in my first year in the US than in the fifteen previous in Ontario. While I might not have ‘loved’ every bottle of wine or spirit I purchased at the LCBO, neither did I ever find a poor quality (for the price) or misrepresented one. That is not the case at the ‘Superstores’ here in New England, where ‘purchased’ shelf space and colourful placards can steer one in a direction that leads to later regrets.
“To serve and protect” is a motto usually reserved for police forces, but its function as a filter and resister of bad wines and spirits (and an educator) should be appreciated by those purchasing at LCBO. Many’s the time since my move here that I’ve told others that the four hundred decent choices offered me in Ontario were a preferred option to the twelve hundred spotty choices provided here.
Some claim that the LCBO works. I agree that it does ok for wine and liquor, though I must say where my parents live just outside New York City their local wine store is cheaper and has a better selection, and does a better job of bringing in interesting wines.
However, where the LCBO and Beer Store really fall down is in offering interesting and local beers. They tend to cater to the majority of consumers that love watery lager. They have many different lagers and pilsners from Europe, and many light beers from Canada and the US – essentially a wall of tasteless soda.. There is nowhere for a niche of quality, interesting and local beer to thrive in this duopoly system.
If what we are concerned about is the revenue to the government, why don’t they just allow private retailers to sell beer/liquor/wine and gain the revenue lost through an alcohol tax?
Brilliant article and thank you for publishing! The LCBO is a communist regime that must be toppled ASAP! However, I try not to shop there anymore and instead find better buys south of the border that I can bring home. Better yet, try wine shopping on-line.
Well said Jan Wong.
The government has no business selling its populace alcohol. History illustrates they are bad business managers and do not maximize returns for tax payers. In a private system the revenue generated from taxes would far outweigh the miniscule returns we currently see.
For all of you who are proponents of the LCBO, how do you justify the $30/hr shelf stockers with full pensions and benefit packages? Do you see that as a good use of your tax dollars?
And we haven’t even started discussing choice/options for consumers (which is pathetic).
Wish LCBO would relax its pricing policy when it comes to wineries. If I travel to a local St Catharines/Niagra winery it would be nice to pay 1 dollar or two less than what the LCBO charges in the store. I still believe LCBO can still profit this way. I believe it’s win-win situation for both parties.
Wish LCBO would increase its selection and variety of products. For example – there are many nice wines that I cannot purchase in Ontario simply because LCBO does not carry them. So then I have to go out of province to purchase them, or I have to purchase them in the US.
Wish LCBO would develop its stores that aren’t as great looking as the Summerhill branch. Why can’t improvements be made to all its stores to have the same standard as Summerhill. For instance the store at Gerrard and Logan is a great location but the store and it’s parking area need improvements for sure.
just mho thanks!
As an immigrant from Ireland in the early ’00s, where the selection of wines at the “local grocery” was anything you want as long as it was Jacob’s Creek, I find the LCBO tremendous. Could it be run better? Sure. Should it be abolished? No.
I agree with other comments that the LCBO is well-run and provides a good range of products at reasonable prices. I was in New York City recently, and I was underwhelmed by the selection in its stores. Prices were generally lower than the LCBO’s, but not by that much. And other goods in the U.S. (clothing and the like) are lower-priced as well — it’s not just booze. Plus the experience of shopping in those American stores is pretty grubby, in general, compared with shopping in an LCBO.
All in all, I’d say the LCBO is a profitable corporation that the government would be idiotic to divest itself of. It does its job well: it provides good service to customers and healthy dividends for the provincial budget year after year.
I fucking hate this province, and the arrogant, ignorant, people that run it….. and inhabit it. Canadians are truly the most ignorant people on this planet. Colonial business model for colonial inhabitants.
Take Loblaws for instance (please!)….”essentially a no-growth company in a seemingly endless state of restructuring and repair. Their core food market share is declining, the merchandising and operations are weak, the consumer is cautious, the CAD (Canadian dollar) advantage has disappeared, the competitive square footage growth is about to explode”.
Readers, do yourselves a huge favour. Run out and buy “WHY MEXICANS DON’T DRINK MOLSON” by Andrea Mandel-Campbell. Reading this excellent book will go a long way in understanding why Canada is such a retarded country.
Will we ever leave Mariposa?
Wong is Wrong. It is sensible for the Government to gain revenues in this manner. If they don’t they’ll have to get it other ways or reduce services. The price discrepancy or selection options are not that great. In fact, private sellers would have economic reasons to only stock big seller mainstream items whereas LCBO has great variety.
Lower prices for booze? Bad idea. I currently live in the UK where you can buy double strength cider for £1 a can on sale in supermarkets as loss leaders. It dramatically encourages youth binge drinking.
Don’t touch the LCBO!
Anyone who travels quite a bit — like me — understands the selection of beer, wine and spirits is greater outside of Ontario. Closer to home, Wegmans in Niagara Falls (NY) offers more beer. The Premier Group (Buffalo) offers more back vintage wines. If you’re Joe 6-Pack, and there’s nothing wrong with that, the LCBO may be fine with you. It’s not fine with me, though — dictating what I can and can’t buy, and limiting my choice to itself.
Aside from the privatization issue, what the LCBO is also screwing over are wine agents. Funny, you can buy a single bottle of wine from the LCBO, but not an agent. The LCBO forced you to buy a whole damn case from an agent. Overnight, I would increase my buying (not drinking, but collecting) from Halpern, Lifford, Churchill, Le Sommelier, etc. Instead, I pocket what money I would have spent on a couple bottles from the agent, and I DON’T spend it at the LCBO. So, there are incremental revenues just waiting to be tapped. And, in general, I think it’s despicable that a retailer (LCBO) is competing against its suppliers (agents) by forbidding the latter from selling single bottles, when it can do the same. That’s just evil.
Lastly, the LCBO is stuck in the 1990s in terms of e-commerce sophistication. Look at Winebid.com, for example. There’s no reason the LCBO couldn’t launch a white-label version of Winebid, and allow buyers and sellers (mostly in Ontario) to come together. The LCBO would own the platform, be able to monitor it, and tax buyers/sellers every step of the way. The alternative we have — twice yearly wine auctions, administered by the LCBO — are a primitive, retrograde model for reselling.
The LCBO’s lack of innovation, and no sense of obligation to offer more value for its customers, is incredibly offensive. You can’t tell me large tier retailers, like Loblaws or Sobeys, or smaller tier sellers, could do any worse.
I love how the LCBO talks about social responsibility and trying to discourage consumption on the one hand and then actively markets on the otherhad. It’s doubly troubling in that it has a monopoly on liqoure sales in the province, so why in the heck is it marketing at all? It’s time for this dinosaur to follow its bretheren and becmoe extinct.
The LCBO pumped more than $1.5 Billion into the Government of Ontario’s coffers last year. Sure, alcohol costs a lot in Ontario; but then it’s a LUXURY item, not a necessity. Not only does the LCBO contribute truckloads of money towards social programs, but it also provides a measure of control against under-age drinking.
To me, the author of this piece just comes off as a whiner. I’m trying to imagine what she’d say if the Ontario government followed her advice and disbanded the LCBO…and then had to raise taxes to compensate for the $1.5 billion annual shortfall.
If you don’t want to pay high prices for alcohol…then perhaps you should stop drinking instead of trying to make Ontario taxpayers foot the bill for your indulgences.
I was down in Hilton Head,SC last summer and bought a bottle of my usual wine at a RiteAid for 3.99 (here it cost 10.95). With a much stronger Canadian dollar and if the LCBO the largest purchaser of wine and spirits in the world, how can this pricing difference be? We are being gouged beyond belief.
The LCBO is doing fine, really, I have no complaints. Many people don’t seem to realize that the LCBO will bring in a case of whatever wine you ask them to and will consider stocking it if enough people ask them to. I bought a bottle of Brunello in Florence as a gift for someone just to see that the LCBO sold the same wine for half the price. The promise that private retailers would do a better job is bunk. Loblaws used to have food education seminars and put a real effort into creating a great shopping experience, but slowly, that seems to have faded, (other than the new store a MLG) The LCBO just seems to improve with age. The real antique in Ontario is The Beer Store. They are trying out a new idea with the Beer Boutique in Liberty Village but it’s still a venue for Labatt and Molson. I prefer to get that stuff at a convenience store.
Two points:
1) LCBO CUSTOMER SERVICE – does it exist? When’s the last time you walked into a store and were greeted with even a smile, forget about someone who really has any interest in helping you. And why would they, does their job depend on it? Their union would say it didn’t. Great, there are 000’s of products to choose from, how about a little bit of help finding one that’s right for me.
2) BC WINE – absolutely disgraceful selection of the wines made in our very own country. Can I just purchase direct from the winery and have it shipped to my house? NOT A CHANCE. The LCBO has threatened BC wineries that if they sell to Ontario residents there will be serious consequences, including affecting any future relationship that they hope to have with LCBO. NOT COOL LCBO, NOT COOL.
Keep the LCBO, fine, but open it up to some competition. Yes, there will be an impact on the OVERALL CONTRIBUTION of $$’s to the government, IT WILL GO UP! Don’t believe me, start will all the comments above from those who are currently buying from the states because our retailers can’t fulfill their needs.
You nailed it Jan, great piece.
This article reminds me of other ‘government monopolies’ which were sold “in the interest of the taxpayer”, and we’ve been screwed with every sale. Remember Highway 407? We paid taxpayer money to build it, with the promise of revenues into the tax coffers for years to come. After they use our money to pay for it, the government at the time wanted a huge influx of cash, and chose to sell our future revenue stream for immediate money, so they could spend away our money and claim how ‘fiscally responsible’ they were being, thereby ensuring re-election. Ditto for Petro-Canada and who knows what other great business ideas which went down the toilet after the government of the day cashed in on the one-time sale of the taxpayer-owned entity.
The LCBO is my favourite store, and not because I am a boozehound. Rather, it’s because they have interesting new products, a glossy FREE magazine with amazing Lucy Waverman recipes, and prices that are reasonable (ever been to California? Their prices for their own local wines are higher than the same wine costs here in Ontario). Sure, you can get some nice wines for $3 at Wal-Mart in Detroit. But so what? You can only get so much at a time, and it costs an arm and a leg to pay for the gas to get there and back. So if you want U.S. prices, move there and live there. I’m sure the fantastic inner-city schools will be just as good as the public schools are here, their library systems are all as world-class as ours, and healthcare is available to everyone who needs it — NOT!
Can improvements be made at the LCBO? Sure they can. But most of our elected officials are not business people, and aren’t really qualified to determine where and how. It used to be said “Those who can, do. Those who can’t, teach”. I think it’s those who can’t, go into politics. It’s the only place where you can work for a few years and earn a full pension for life. THAT’S where the vast improvements could be made in the Government of Ontario (and Canada). Treat elected officials and bureaucrats just like the rest of us working stiffs. But get some reasonable improvements like controls to regulate markup percentages and audits to determine that the best wholesale prices are being obtained by the LCBO buyers. Give liquor distributors who are somehow able to list their product in every province BUT Ontario some sort of Ombudsman or Committee to which they can apply to be given a fair shake, rather than allowing this monopoly to black-ball them just because they can.
But keep the LCBO owned by the taxpayers. I would strongly urge my elected official to block every suggestion to sell my interests in this government-owned retailer. We need the ‘dividend’. And it’s coming from those of us who shop there, which is fitting (sort of like the ‘Luxury Tax’ in the board game Monopoly). The more you buy, the more you help fund the dividend which goes a long way to funding the healthcare we prize so much.
That’s another opportunity for cost-management right there. Stop badgering doctors with layers of useless paperwork. I’m sure they’d be willing to bill less, if they didn’t have to waste so much of their time filling out forms, working for those bureaucrats. Maybe that’s something Jan Wong could investigate. I’d rather she look there and keep her tee-totalling nose out of the LCBO. It’s obviously not her strength.
The author is completely right. In fact,she has said it in a way that more people will understand how silly the present
really is.
The government will make all of its money regardless of who sells the product. The point is they “net”less when they sell it as their stores are far too expensive to run and postage stamp pricing,their system and thinking stop them from being true retailers.
Governments should create laws, collect taxes and provide social programs, not sell liquor at retail. It’s thinking hard as opposed to thinking smart.
Sell off the stores and apply the money to education and health care.
The only thing that really bothers me about the LCBO is not the selection or price, but the HOURS.
The panic when you have half an hour from work to pick up a wine for a dinner party, the “stocking up” before holiday closures. Are we really that reckless and stupid that we need the government to tell us when we can get a bottle of wine?
Every post that suggests that ere would be less revenue to the province should study the results of privatization in Alberta to see that the net proceeds are greater. Or they could read the ontario governments own commissioned Independant report from a couple years ago which, before being quickly buried, said the same thing. So have other arguments but please dump the assertion that the province would earn less….that’s wrong.
The Alberta liquor retail model is often mentioned yet with few details, just an assumption it’s better. All liquor stores in Alberta must purchase from the Alberta liquor commission, the province retreated only from the retail sector, yet maintains an otherwise almost identical business model as the LCBO.
In Calgary, Edmonton, Red Deer, etc. there are an astounding amount of small liquor stores with generally a plebian selection. Specialty stores do exist, knowledge of them is traded like new restaraunts, and their prices cause eyeballs to pop out. Doing Christmas wine shopping in Calgary recently I would say anecdotally I paid 1.5X – 2X LCBO prices for a nice bottle of wine: my LCBO “celebration ceiling” is $20 – $25, in Calgary I had to raise it $30 – $40.
Incidentally, in the temperance subject, alcoholics prefer the Alberta model as they’re always walking distance to multiple anonymous liquor stores, or so my alcoholic family member told me.
The LCBO and its critics rarely trumpet it’s product testing function yet it remains a fundamentally important safeguard to Ontarians health, an ongoing battle with unscrupulous liquor producers and bottlers.
I was in NYC – we were able to get alcohol in a JVC – pharmacy! It sells both beer and wine! Good grief. (LOL)
Well with “premier dad” in charge there will NEVER be any alc allowed to be sold in corner stores (like in Quebec) and the like. NEVER. If he had his way…. he’d start up with Prohibition again (LOL) (kidding) It is more expensive to purchase beer and other alcohol in Quebec – been there done that!.
Love your idea for an OCBO.
Good article. Touches on a few of the problems of the LCBO. But I would add one more thing. If government is so good at selling a consumer product (ie. wine), whey not start selling cars, sofas, bread, or whatever you want. If, as many commentators have suggested, the Ontario government is so good at running a business, why not run it all. Oh, I forgot, that has been tried before and failed. Please, I live in Spain now, and I once lived in Italy. I never saw a problem with selling wine just like any other product. Ontario is almost unique in this world and it is time to change.
Go back to sleep Canada.
Good article. Surprised there was no mention of 2005’s Ontario’s Beverage Alcohol System Review, a study commissioned by the LCBO itself, which determined that allowing the private sector to take over liquor retail “would produce at least $200 million more government revenue than the government currently receives from the beverage alcohol system.”
Finance Minister Greg Sorbara rejected the review with no explanation. However, the unions and MADD applauded the decision.
That $200 million would probably come in handy. You could spend it on healthcare and education, for instance. You people like healthcare and education, don’t you?
Another aspect of the LCBO system, that should be mentioned, is the crippling damage it is doing to the Ontario wine industry. Many Ontario wineries are suffering and failing because they are unable to reach the market place with their product. There is no alternative volume purchaser in the province. The LCBO monolithic model does little to include small batch, top quality Ontario produced wines. If a winery cannot place their product with the LCBO, who is the alternative purchaser ?
Keep the LCBO, if you wish, but allow competition from the private sector.
Uh – wow – what an absolute idiot this author is. you do realize that LCBO puts $1 BILLION – yes BILLION – dollars back into Ontario Coffers? That fund our parks, schools and hospitals? You would rather that goes DIRECTLY into the pocket of a few specific individuals who already have the resources (read:$$$) to operate mutiple liquor stores so you can get cheaper liquor.
Dumb. Dumb. Dumb.
I have to disagree with this article. The Quebec ‘corner store’ method has resulted in suppliers “renting” the shelf space. It limits choice, decreases profit margins for the smaller suppliers who eventually go bankrupt. If brought to Ontario, only the large suppliers would flash $20 bills to get exclusivity on the shelves to limit choice. Careful what you wish for.
The LCBO revamped the shopping experience decades ago as a response to consumers wanting better selection, better customer service, and better atmosphere. With knowledgeable staff and better shopping experience they have increased the revenue to go towards the provincial coffers to pay for healthcare and education. The Food & Drink magazine provides an unfair advantage over other magazines as suppliers absolutely know the readers are their taret audience. Yet, it is profitable and comsumers look forward to it.
The LCBO is a three-headed hydra when it comes to dealing with suppliers though. Sales & Marketing want the suppliers to invest in their programs. The Supply Chain side has a mandate to limit selection in order to have the store shelves look tidy and to reduce the labour time to restock the shelves. The store staff are caught in the middle – dealing with customers, agents, Supply Chain and Sales & Marketing.
If there is an opportunity for savings at the LCBO I would suggest they outsource their warehousing and logistics. The service could be better handled in the private sector. Keep the store staff as they do thier job to eliminate sales to underage and intoxicated patrons. The warehousing arm of the LCBO is terrible and should be left to the experts in the private sector.
Actually @Outofit you can. You’ve never been to a Wegmans I presume. BC Has a private & public system. Jan should have used BC as a system to benchmark not Albert. We’ll never get to Alberta’s system but BC maybe.
BC also has a bigger market for great local wines vs the plonk the LCBO sells here. Seriously pay $2 more for a Ontario wine, trust me I’ve converted, so can you. Oh ya all those “green” wines from California. I wonder what how much gas it took for them to get here. Our economy needs to grow and there are companies in Canada making unique wines that can’t grow with these archaic systems.
Lets stop handing out freebies and actually build an economy. Let the people grow their businesses.
Ben… yes lets be lazy and have the government just clothe and feed us. Why don’t they burp us too while they’re at it?
Talk to Ontario wine owners, I have friends who are and it’s a struggle. They provide jobs for our local and rural economies and increase tourism dollars which wait doesn’t that increase potential revenue for OTHER businesses as well as taxes?
The LCBO is absurd, the whole system is absurd. In Germany one can buy alcohol in grocery stores at reasonable prices. People will drink no matter what; trying to control alcohol consumption with a system like the LCBO is ridiculous. Get real!
we have a little summer place way out in the sticks. the local village general store now has a lcbo section. don’t get me wrong, i love the convenience of buying some wine and a few beers there, but how can it make economic sense that it is the same price as the regular lcbo’s? it must cost them a fortune to ship a few bottles of wine and beer way out there. the whole system makes no sense.
Social responsibility should never be short changed.
Keeping alcohol out of the corner stores helps to curb underage drinking, curb intoxicated sales, and eliminates black market inventory from infiltrating the consumer market.
If the private sector can deliver more tax revenue for the government then I see no reason why we still have the LCBO. I like how folks talk about $1 billion in revenue when you could be talking about $1.2 billion. I guess “social responsibility” is worth $200 million. I don’t see why the sale of Alcohol isn’t small convenience stores since Cigarettes and Lottery Tickets are sold there already. It helps hardworking small business owners contribute to the economy. I know I’ve simplified the argument but I really believe the LCBO isn’t beneficial to the economy. (Beer Store is the same thing except owned by Foreign Companies)
When you can buy a 1.75 litre of Grey Goose for 59$south of the boarder boarder that blows the whole idea that Lcbo has buying power people hete have been brain wsshed to believe our government cares about us bullocks they care about how much money they can grab and always say they arent making profit if so let small businesses make profits for them.
The lcbo may be tough on producers, but it is excellent for consumers. I lived through the Alberta transition from public to private stores and overall prices increased, and, selection and quality varied tremendously by neighbourhood. stores were almost uniformly small with limited stock, much of it subpar. I was delighted to return to Ontario and see the development and rebranding of the lcbo. sure there are spirits that I can’t get here but overall I get outstanding selection, good service, and excellent pricing. don’t believe the hype about the value of privatization, it’s justnot so.
With all due respect I think I’ve put more research into how to heat a can of soup than Jan Wong put into this article. Did you really just waste my time on an opinion piece focused on pot lights in a nice neighbourhood? Speaking in one area I know a bit about – craft beer – the LCBO may not provide the greatest selection, but they do provide some excellent seasonal beers at prices that are usually far lower than you’d find them elsewhere. They’re not perfect, but they’re doing a good job. Hopefully the next time you’re running against a deadline without an article, Jan, you’ll turn to a “best of” rather than turn out 10-minutes worth of unresearched vitriol about nothing.
Every time I go Stateside I am blown away by how cheap booze is, and yet mysteriously the nation is full of surly drunkards causing havoc everywhere you go. We are being fleeced here in Ontario. Maybe what we need is a protest movement for publicly owned liquor retailers!
i hate the lcbo at madison & dupont – my local harumph. ‘failed airport’ design, limited selection and a carpark in dire need of repaving BUT THEY PUT UP WARNING SIGNS FOR UNEVEN PAVEMENT INSTEAD. uninspired central. in theory am happy with the lcbo but caveat that with the fact it could do better, needs to modernise and lose the lazy ‘protected canadian’ malaise it emits from every pore.
Good article. Compare “dividend” per capita between Alberta and Ontario $187 vs $120 and it appears that the Ontario Government missing $900M /year in revenue because of the inept LCBO.
That’s a lot of health care or deficit reduction. I wonder if any party has the guts to take on this unionized pariah.
Bang on – Jan Wong! You idiots who are commenting that you love the LCBO so much can keep it. But, please dear nanny gov’t allow private shops to serve the rest of us with functioning brains.
I can’t believe the number of fools who actually applaud the LCBO and what they “do”.
What they “do” is they have a monopoly. Monopolies are otherwise considered to be illegal. Just ask Microsoft.
And let’s get into the issues with the Beer Store. Why does the Beer Store exist? Its run by 3 mega-corporations that are not Canadian. THey do little to nothing to get Canadian beer from smaller breweries into their store. INstead, you get lovely swill like Lakeport and Wildcat instead of delicious, local beer like Great Lakes and Bellwoods.
Do yourself a favour: contact your local MPP and tell them that you want freedom of choice. Mix public with private and allow me to have beer options. And if you don’t understand what “beer options” are, go down to Buffalo and see what Premier Gourmet has for a beer section. Buffalo! Toronto’s retarded stepchild has 10X the selection and tastier options than a cultured city like TOronto has!
Ontario is in the grip of conservative fascism. Whether it be milk, chicken or wine the government handcuffs entrepeneurial producers, limits consumer choice and sets price as it sees fit.
Every time I am forced to shop at the LCBO -I may as well
wear a sign that says LOSER
LCBO legal robbery-but you feel much better after reading
the million dollar ads–
To all those posters arguing that the LCBO “works”: well, it doesn’t need its monopoly then, does it?
I like the LCBO. but our local beer store is really bad. Dingy and dirty and smelly. and they don’t sell smaller brewery local brands.
keep LCBO but also allow local beers and wines to be sold at small outlets. Support the local brewery. support the local winery. they aren’t big enough to sell to BEER store.
The LCBO doesn’t work for me. I read Whisky Magazine (UK) and Malt Advocate (US), and can’t get many of the featured products here in Ontario. Yet Albertans, British Columbians, and pretty much every other citizen of a western nation can. Legacy Liquor in Vancouver (as an example) puts the Summerhill LCBO to shame in aesthetics, customer service, and especially selection.
But that’s not the only issue – what about freedom, from both individual and commercial perspectives? On this issue, we’re behind almost every country in in the world.
OPSEU will fight tooth and nail to keep the LCBO. They are protecting their own. They even have a campaign to end associate stores on their website. I suppose the idea of buying a bottle of wine at a corner store in a small village or town is too dangerous an idea for them…. We may like it! How do we end this money drunk social engineering project? Silly and sad. You’d think the upper crusties from T Dot would be smarter than this.
I am always amazed that people will listen to the under informed reasoning on why to ‘privatize’ any government service. Have any off you read LCBO Privatization Study? First, look at selections: studies of other State/Provincial privatized liquor stores shoe that prices have increased at least 10%; selections have been reduced due to lack of volume sales. Do you really think that a small time supplier is going to stock what you want any more than the LCBO? Profits: where do you think this money goes? It goes into the pockets of… the Province of Ontario. If it were privatized the profits go into the pockets of … those lucky enough have purchased a profitable business!
While we are at it let’s privatize healthcare.
@David…it’s complete sophistry to compare education or healthcare provision to a private product produced by private industry.
How dare some nanny state dictate to me where I can buy my booze? In Germany, you can get a case of beer at a gas station and society doesn’t go to hell in a hand basket.
Liquor laws need to be liberalized in Ontario, which not long ago, had a last-call of 1MA (!!!!!!!).
Leave adults alone to make their own decisions.
Regarding the much ballyhooed “selection” of the LCBO. If you live in a downmarket area, you won’t find good selection of wines or spirits. It’ll be pure crap.
Let corner stores sell booze like most of the free world does. Enough with this socialist crapola and “mandate” safeguarding the public…Enough with the stores that look like Barney’s department store, down with $25/hr guys that stock shelves. Give me a break. Give people freedom. My money, my choice.
(whoops…that’s 1AM)
1. The “Encourage/Discourage” argument… “Drink, but make sure you eat, Dear” Yes, it sounds like our parents, but when dealing with literally millions of customers from diverse backgrounds, there needs to be a bit of balance. It ranges from the tony wine snob to the beer-after-shift crowd. Oh, and alcoholism knows no class boundries.
2. The “I can get a better selection in X province, state” argument. Have you ever tried to purchase the SAME(quality) item on a regular basis from a variety of private liquor stores or corner conveniences? I guarantee that -most of the time -you can’t. Yes, we can get it at X shop, but not Y nor Z. What shall we get: a favourite wines, our preferred whiskeys, or just something that paraphrases it? Devolve the LCBO I can guarantee you’ll not be finding a nice oaky chardonnay or good scotch at the X-ville corner store near your/your friend’s cottage!
3. The “It’s cheaper everywhere else!” argument. Oh yes, other jurisdictiions have much cheaper alcohol. They also compensate with taxes higher on other goods and services(QST anyone? How about state/county/city taxes?). And quite frankly, whenever I read a review about a wine or a spirit sold in Ontario and available in other provinces, 95% of the time it’s less expensive in Ontario.
Really, if you need to write a scintillating article that will generate responses, try something more complex than a “sitting duck”; try the Ford family!
You believe that hogwash?
Côtes du Rhône. Mmmh.
And because the USA is a great example of responsible alcohol useage…said nobody ever
What is the government doing in the booze business anyway? Stop this madness!. We have the most oppressive liquor laws outside a Muslim country and the most flagrant abusive monopoly in the free world in the LCBO and in the Beer-Store cabal. Why do Canadian roll over for this? (make that bend over)
I couldn’t care less about finding rare types. I can’t go into an LCBO
without being treated as a criminal. Prejudicial profiling systems
targeting of age drinkers. I am 29 but get refused with a passport
because they want me to buy a new passport to verify my age…. at 29. I
will be 35 and still be carded under a system called agism and the
government thinks this is keeping kids safe. It ruins business and does
not stop alcoholism which is what should have been targeted 40 years
ago.The social and healthcare savings from stopping alcoholism far outweighs what they are failing to do. Oh and before you say drivers license, I don’t drive, I use the old health card without a photo and the age of majority card is only up to 26. Leaving me with the passport option but why am I buying a passport at 29 JUST to buy 6 ciders once every month. This is what happens when you enforce prejudice and sadly partly through our tax dollars, so even if I don’t purchase items there anymore since I am tired of being treated so poorly, I am still funding this joke we call a control board.
LCBO is nice enough to serve hundreds and hundreds of alcoholics monthly. Don’t kid yourself. They are happy to serve them as long as they aren’t falling over or smell of booze when they walk in. They are still heavy alcoholics and LCBO loves to make money off of them. I have three friends that are bad alcoholics and they are served booze daily by LCBO. As long as they keep smiling and pretending they are keeping us all safe from evil alcohol while really running a mafia style booze racket, I guess you will feel safe at night? It is called propaganda. It is just theft by our government with a smile. If it makes jobs, you think its worth it yes?
I was once summoned to court for booze sales without a license at a party where some of my house mates hosted the party and I was in my room upstairs most of the night, hanging out with some ladies. I came downstairs to get a summons to court from some cops thanks to your awesome alcohol laws when I was not drinking nor selling booze. At that time I had not drank in 3 years. Keeping the people safe are we?
Even the judge dropped all charges on everyone involved but kept it on one guy who actually hosted the party but lowered it to the minimum possible fine because we had 40 dollars in “booze sales” as it was an optional pay in….
The cops were nice enough to break two of our doors and steal a keg which the host was keeping for another night and was not open.
But the kids are all safe yes?
You have to realize, they laws are not just about LCBO
The product consultants are a joke. Take Astrid Brummer for instance who is a “expert on local wines” and holds a degree in environmentalism. Being a Somm I shrug every time I have to read her misguided options like Pinot Gris with all things BBQ. Great, have a big steak and a pinot gris, excellent advice Astrid. The LCBO is soo poorly managed tax payers should demand more. Especially considering the amount of talented and properly educated people in the industry who could actually give expert advice.