Ontario rejects review panel's advice to sell LCBO

[SYoung]

"Just 30 minutes after a blue-ribbon panel struck by the Ontario government tabled an 81-page report urging radical transformation of the LCBO,the report was rejected. 'The government of Ontario will not sell the LCBO,' Finance Minister Greg Sorbara said at a news conference yesterday." -- Toronto Star

Well, I can't say this was a surprise, but I would've thought it would've taken more than 30 minutes just to read the 81-page report before rejecting it. Seems the government already had it's mind made up and the whole Beverage Alcohol Review System Panel commission was a waste of the taxpayer's money.

I just came back from a trip to Australia where there's no government monopoly and alcohol is sold everywhere, including supermarkets, and I saw no evidence of any abuse of alcohol by minors or any other citizens whatsoever. So it seems that Ontario does not believe its citizens are as mature as the Australians or Europeans or American or our fellow Canadians in Alberta.

In the end, it's about the control of money and the Ontario govenment isn't going to give up control of a cash cow. I just wonder why they even bother with the ruse of setting up the commission in the first place?

[estufarian]

The control of money issue can be resolved. The province would still get their 'markup' (apparently it's not legally a 'tax'). This is how Alberta does it - the Alberta govt just got out of the retail portion, and I'm told (don't know where to go to find the stats) that Alberta collects "net" about 60% more per capita than Ontario. Apparantly there, a listing is a "right" (you pay for it) and then you are entitled to sell the product anywhere legal. Consequently Alberta has over twice as many listings as Ontario (but good luck in finding them all!).

[mizducky]

I just came back from a trip to Australia where there's no government monopoly and alcohol is sold everywhere, including supermarkets, and I saw no evidence of any abuse of alcohol by minors or any other citizens whatsoever.  So it seems that Ontario does not believe its citizens are as mature as the Australians or Europeans or American or our fellow Canadians in Alberta.

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I should point out that some regions of the USA apparently consider their citizens more mature than do others. US alcohol laws vary, sometimes wildly, from state to state, and even between municipalities within the same state. For example, while California allows sale of everything from beer to hard liquor in supermarkets and etc. 24/7, Washington State restricts hard liquor sales to state-owned liquor stores (which are not 24/7, in fact they're closed on Sundays). And there are still counties out there where it's as if Prohibition has never been repealed; even owning alcoholic beverages bought elsewhere is a crime in these "dry" counties, which proves a real goldmine for local police forces as they follow booze buyers from "wet" counties over the line into their "dry" home county. Yep, it's pretty whack as far as I'm concerned, and having once lived in a couple of the more restrictive areas here in the USA, I definitely feel your pain up in Ontario.

[gourmande]

Personally, I'm quite happy with the decision. I appreciate the LCBO's high and consistent levels of service, the product range and availability it assures, its consistent and reasonable pricing, its community involvement, and yes, even the role it plays in "monitoring" those who can't seem to monitor themselves.

Oh yeah, the Food and Drink Magazine isn't hard to take either...

The following is LCBO's own media material, but a good starting point nonetheless for those here who may not be familiar with the institution or its mandate.

Today's LCBO

If you want to delve into the fun stuff though, click below.

LCBO

As a footnote, relatives from Missouri who visited recently were quite impressed by the selection, and noted that pricing for certain items (wines in particular) was considerably lower than what they had come across at home.

[jayt90]

Personally, I'm quite happy with the decision.  I appreciate the LCBO's high and consistent levels of service, the product range and availability it assures, its consistent and reasonable pricing, its community involvement, and yes, even the role it plays in "monitoring" those who can't seem to monitor themselves. 

Oh yeah, the Food and Drink Magazine isn't hard to take either...

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High and consisitent levels of service? You have to find a clerk with a gold pin, or a Vintages consultant, to get any level of service and knowledge, otherwise they will dust and tidy bottles right in front of you.

Pricing? Check the wine ads in the N.Y. Times, or Wine Spectator, and you'll see that LCBO sometimes reaches the mark, but is usually more expensive. And not a lot of knowledgeable selection compared to Morrell, Astor Place, or Sherry Lehmann.

Community involvement? Some very expensive auctions and wine parties, As far as I can see.

Yes, they do monitor the drunks among us, and post their ousting statistics proudly. These are easy marks to refuse service to, and many are without any other pleasure in life, other than the same tranquility you and I might look for under a screw cap. I can do without the superior, strong-arming I have seen in some LCBO's when some customers are treated less equally.

And then there is 'Food and Drink'. It has kept legitimate food and wine magazines far in the background. 'Wine Access' is struggling, and has to compete with a free handout with dozens of ads from alcohol distributors and agents who know they are servicing their LCBO accounts by buying full page ads. Remember the proposed wine and food mag. from Steve Paige, about 1.5 years ago? Never got off the ground!

The decision is not over yet and some good may come from the panel. But I am glad to see your complacency with Sorbara and the government; this is definitely what they are looking for.

[MarketStEl]

A comment from the other side of Lake Ontario:

Perhaps the provincial government might want to consider appointing someone who does not consider alcohol an unmitigated evil to head the agency?

The Pennsylvania Liquor Control Board (the largest single purchaser of wine and spirits in the United States, BTW) has done much to shed its reputation for being hostile to imbibers and oenophiles under its current chairman, Jonathan Newman, himself an oenophile. The state has even gained a rep as a wine lover's paradise of late thanks to Newman's driving some real hard (and fantastic) bargains with outstanding vintners and passing the (substantial) savings on to the consumer with the PLCB's "Chairman's Selections."

It hasn't hurt the agency politically, either. The frequent calls for its sale or dismemberment have all but disappeared around these parts of late.

[mkjr]

Just my 2 cents but BC's mix of some public and private wine stores seem to work well. For example, Marquis Wine Cellars in Vancouver has an amazing selection of wine from around the world and many wines that the BCLDB and LCBO would, I am certain, love to get their hands but are produced in such small amounts (or have owners who prefer not to deal with monopolies) that it might not be profitable for them to sell (read may not be worth the effort for a case here and there). Marquis also has the choice of bringing in the same products that the board brings in through the same agents that bring wine through the BCLDB (they can even charge a little more or the same price). Not a bad system if you ask me – although I love the wines that I have gotten from Marquis for the last 10 years. There is no reason to think the changes to Ontario’s system can not be incremental like BC’s changes, versus the sweeping changes in Alberta. Why is change such a bad thing? I think the report sparks dialogue amongst “all” stakeholders, including the residents of Ontario and employees of the LCBO.

[sadistick]

I was just in Philly actually, and one of my stops was to their liquor store, because of the mentioned bargains and selection.

Let me tell you, if we could swing this in Canada, people would be besides themselves. Such an amazing selection, and the price discounts were AMAZING.

I picked up a few bottles of Newton Epic Merlot, which retailed for $65 USD for $24!

[Wine_Dad]

What does not appear anywhere here is that from a supplier point of view, it is much easier to deal with one buying group. The fact that all of the agencies and distributors only have to deal with one group that handles distribution all over the huge province is a significant factor keeping the LCBO in the hands of government. Imagine the cost to the suppliers/distributors of having to cart their product to Timmins to satisfy the clauses in their contracts. The fact that the LCBO assumes all distribution and inventory risk goes a long way to keeping costs down to the consumer. Coversely the argument can be made that they are doing it less efficiently than a thrid-party logistics company but it's the best we've got right now.

Unless the Government can completely remove itself (and the resulting massive ineficiencies) from the process and allow free market forces to take over, we might as well accept the reasonable prices and limited selection offered by the LCBO. Anything in between where we are now and the state of "free market" nirvana is likely going to be much worse than the current situation.

[jayt90]

A comment from the other side of Lake Ontario:

Perhaps the provincial government might want to consider appointing someone who does not consider alcohol an unmitigated evil to head the agency?

The Pennsylvania Liquor Control Board (the largest single purchaser of wine and spirits in the United States, BTW) has done much to shed its reputation for being hostile to imbibers and oenophiles under its current chairman, Jonathan Newman, himself an oenophile.  The state has even gained a rep as a wine lover's paradise of late thanks to Newman's driving some real hard (and fantastic) bargains with outstanding vintners and passing the (substantial) savings on to the consumer with the PLCB's "Chairman's Selections."

It hasn't hurt the agency politically, either.  The frequent calls for its sale or dismemberment have all but disappeared around these parts of late.

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Newman had a Q&A session here on egullet this year. Would Andy Brandt care to face us? I don't think so...

[mkjr]

What does not appear anywhere here is that from a supplier point of view....

....Anything in between where we are now and the state of "free market" nirvana is likely going to be much worse than the current situation.

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I agree that all stakeholders should have a say in the process and in any change. Changes effect a great many people. However, I would encourage you to examine the situation in B.C., which is "in between" and seems to work very well, certainly not "much worse" that the current LCBO system.

[SYoung]

I don't see how the service at LCBO is any higher or more consistent than the numerous wine stores I visited in New York and Australia recently, so I can't agree with you there.

As to product range, LCBO is good for the easy to get mass produce wines and other liquor, but for many of the others, you'll not find it at the LCBO. If you read Wine Spectator, Decanter or any other wine publication and want to get something they recommended or highly rate, most of the time, you won't find it at the LCBO. But if you check the Internet, you can find many stores in the US selling them, but we can't import them here without paying seriously high import duties. For example, I recently had to go to NYC to get a 2000 Paolo Scavino Bric del Fiasc Barolo because they did't have it anywhere at the LCBO. So, sorry, but I don't agree with you either about LCBO having "assured availability" product selections - at least not the ones I'm always looking for.

As far as price, LCBO's prices are sometimes reasonable but you can usually find it cheaper elsewhere. For example, I went to Sherry Lehmann (that Jayt90 has already referred to) in Manhattan and they are selling the Highland Park 18 scotch (one of my favourates) for $60 US ($74 CDN). At LCBO, it will cost you $118! Including 8% NY State tax that comes to $65 US or about $80 CDN. That's a HUGE $38 or about a 50% price difference!! And you can shop around too, whereas at LCBO you're stuck because they're the only store in town.

As to the Food & Drink magazine... you pay for it as the cost of producing it is added to the liquor costs. IMO, it's a waste of money. For example, the heavy weight laminated paper they use for the entire magazine is of very high quality and is overkill for that type of magazine. It's obvious that cost savings wasn't high priority in producing the magazine.

Personally, I'm quite happy with the decision.  I appreciate the LCBO's high and consistent levels of service, the product range and availability it assures, its consistent and reasonable pricing, its community involvement, and yes, even the role it plays in "monitoring" those who can't seem to monitor themselves. 

Oh yeah, the Food and Drink Magazine isn't hard to take either...

[jayt90]

I don't see how the service at LCBO is any higher or more consistent than the numerous wine stores I visited in New York and Australia recently, so I can't agree with you there.

As to product range, LCBO is good for the easy to get mass produce wines and other liquor, but for many of the others, you'll not find it at the LCBO.  If you read Wine Spectator, Decanter or any other wine publication and want to get something they recommended or highly rate, most of the time, you won't find it at the LCBO.  But if you check the Internet, you can find many stores in the US selling them, but we can't import them here without paying seriously high import duties.  For example, I recently had to go to NYC to get a 2000 Paolo Scavino Bric del Fiasc Barolo because they did't have it anywhere at the LCBO.  So, sorry, but I don't agree with you either about LCBO having "assured availability" product selections - at least not the ones I'm always looking for.

As far as price, LCBO's prices are sometimes reasonable but you can usually find it cheaper elsewhere.  For example, I went to Sherry Lehmann (that Jayt90 has already referred to) in Manhattan and they are selling the Highland Park 18 scotch (one of my favourates) for $60 US ($74 CDN).  At LCBO, it will cost you $118!  Including 8% NY State tax that comes to $65 US or about $80 CDN.  That's a HUGE $38 or about a 50% price difference!!  And you can shop around too, whereas at LCBO you're stuck because they're the only store in town.

As to the Food & Drink magazine... you pay for it as the cost of producing it is added to the liquor costs.  IMO, it's a waste of money.  For example, the heavy weight laminated paper they use for the entire magazine is of very high quality and is overkill for that type of magazine.  It's obvious that cost savings wasn't high priority in producing the magazine.

Personally, I'm quite happy with the decision.  I appreciate the LCBO's high and consistent levels of service, the product range and availability it assures, its consistent and reasonable pricing, its community involvement, and yes, even the role it plays in "monitoring" those who can't seem to monitor themselves. 

Oh yeah, the Food and Drink Magazine isn't hard to take either...

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Nicely put. I would just like to add, that there is a French version of 'Food and Drink', attractive and glossy, and published at a loss to the LCBO, and all taxpayers. Do we need this?

[malcolmjolley]

Actually, you don't pay so much for Food & Drink as the liquor and wine co's do. If the LCBO agrees to stock your product, and then asks you if you're going to market it, and then tells you that F&D is the biggest circulation drinks mag in Ontario, and by the way here's a rate card, do you think many advertisers say no? It's quite profitable, actually.

That's why indendent mags get so upset with F&D, they can't compete with the impression* that buying ads gets you on the shelf. And there's not much point advertising a product that isn't for sale.

JayT: Steven Paige's magazine is called Vines. Although I believe it was sold to another media co. a year or so ago. The editor, Walter Sendzik, has been quite outspoken on the subject of F&D and the difficulty of competing.

BTW, the real reason the privatisation recommendation was so quickly scrapped is the power of the public service unions who staff the stores. There are not many cashier jobs that pay $40 an hour with full benefits and pensions. They will fight tooth and nail for every LCBO job, and with a strike deadline coming up next week, the provincial government is in no mood to send Ontarians off on a long weekend with no booze. Look for a generous settlement and a promise not to privatise. This sort of thing can lose elections!

*Note, I am not saying this in fact happens, or accusing the LCBO of any wrongdooing. It's just that it's very hard to say no to an organisation with so much power, whether they actually abuse it or not.

[jayt90]

$40/hr.!!

And they dust the shelves rather than help me choose a wine? What are we paying for?

[Marlene]

I was disappointed that nothing came of the report. Not because I think the LCBO is evil, but because it's time for Ontario to move out of the dark ages.

I personally like the Food and Drink magazine, and it is paid for almost in its entirety by the advertisements. (My father was once upon a time the VP of Advertising for the LCBO) many moons ago.

I've also heard that there may be a strike by LCBO workers starting on Thursday. Just in time for the August long weekend.

[malcolmjolley]

LCBO workers back strike: 84% of unionized employees reject latest offer Edited July 22, 2005 by malcolmjolley (log)

[Freckles]

I find this all utterly depressing. What is wrong with Ontarians?

[Marlene]

Out of curiostity, I visited my local LCBO today. Not because I needed anything, (I stocked up last week), but because I was curious to see how empty the shelves were.

Well, they were pretty empty all right! Most of the popular brands of spirts etc were sold out.

However, here's the good news Taped to the door as you walk in, is a notice advising customers that the union and the LCBO have reached a tentative agreement so there will not be a strike!

edited to add link to the news story that was just published Strike Averted

[Jake]

Thank goodness, no strike before the long weekend.....so, Marlene, are you going to return the extra you purchased???? Hee hee.

[Marlene]

You're kidding me. Right? I'm camping all summer. I'll need fortification!