February 14, 2013

The LCBO crowds out another private business

Filed under: Cancon, Economics, Media, Wine — Tags: , , , — Nicholas @ 09:50

In the latest Ontario Wine Review, Michael Pinkus writes an obituary for Wine Access magazine and hurls “J’accuse!” at the Ontario government’s liquor monopoly for the murder:

Now there are some of you out there who will be asking how can the Ontario Liquor Monopoly put an Alberta-based magazine out of business — well it’s actually quite simple, if you’re willing to connect the dots: if you only have a certain amount of advertising dollars to spend in Canada how much are you going to allocate to the largest population in the country (Ontario); even more to the point, how much do you put into the Liquor Board willing to buy more product if you’ll spend more of your ad budget with them versus a magazine that might (or might not) increase your sales.

I have long advocated for the LCBO to cease publication of this magazine. Don’t get me wrong, it’s a beauty of a publication — my wife fawns over the pictures every issue — but it’s a publication that competes against private enterprise, and the LCBO is after all an extension of the government — so what I, and many others have said is unfortunately true: the government in essence, taking thousands of dollars out of the hands of the companies that pay taxes, their own populace, and competing against them. Sure I hear many of you saying “finally my tax dollars hard at work”: but ask yourself this question: how would you like the government competing against your business?

People don’t see the problem with Food & Drink magazine because they aren’t in the publishing business and are not affected by its publication, but consider these numbers: in the Holiday 2011 issue of said magazine, an almost Sears catalogue sized edition, there were 308 pages total, 140 of those were advertising (not including product placement and promotions within editorial / advertorial which is no doubt paid for as well — and don’t forget the 6 hefty inserts included inside the plastic wrapper) … that’s money that was not spent with privately run magazines that could have, and most likely, would have. Here are some more numbers to boggle the mind. According to the Luxury Media Sales website a full page in F&D magazine is $20,588 (2012 rate) — that’s a lot of money the government of Ontario is taking from their tax paying private enterprise magazines (in a democratic, free market system — who would believe the government is competing against their own populace). Think about that kind of money funneling out of your business sector, your chosen profession or what you do for a living (it’s close to 3 million dollars – 140 x $20,588) … do you think you’d be making the kind of money you are now? Would you welcome that kind of competition? And before you crassly answer “sure, the government can’t do anything right” also put in the fact that they’re the biggest game in town and control what you sell. The nightmare scenario is the closing of your business due to unfair competition and lack of revenue (but it’s the government, so what can you do) — in the publishing game you just shuttered a magazine because of lack of revenue and unfair competition. If you’re RedPoint Media you close down Wine Access magazine.

So, in Clue fashion, who killed Wine Access? It was Colonel LCBO, in the wine cellar, with the government monopoly privilege.

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