In the lastest issue of the Ontario Wine Review, Michael Pinkus explains the 16-point process that all independent wine and liquor importers have to follow in order to get their products into customers’ hands:
Recently I received an email from an agent giving a blow by blow account of the process of getting booze onto the shelf of our beloved Monopoly, including the hair pulling and gnashing of teeth that goes along with it.
[. . .]
“I can take samples to the Licensees — Restaurants & Hotels — and if they want to buy it this is the procedure:
1) They must purchase a minimum of one full case
2) They must pay the LCBO a 25% deposit
3) If I want to reduce the freight rate down from $100+ per case to a reasonable freight rate . . . more like $12/case then I need to gather a minimum of 20 cases in orders with specific Licensees names on them who have all paid the deposit.
4) The LCBO Private Ordering department then processes the paperwork
5) The producer would then ship the product to an LCBO pick-up location
6) We wait until the LCBO consolidates our small order into a large container with other suppliers
7) The product usually takes 4 months to arrive and then spends another month going through Lab Analysis at a cost to the supplier of $175 per product.
8) When the product finally gets released we have to hope that the original licensees that ordered it all take delivery
9) The producer gets paid 60 – 90 days after the order lands in Ontario (while the agent pays to get it out of the Private Ordering warehouse).
10) The agent then has to chase the customer for at least 90 days to get them to pay since they will likely have an excuse not to have a cheque ready upon delivery
11) We have to do this for a total a 300 cases sold within one year to EARN the privilege of getting into the Consignment warehouse.
12) Once granted consignment space . . . we can start to ship from the producer to the LCBO consignment warehouse by the pallet (~56 cases)
13) In consignment, the product can be shipped without an advanced licensee order . . . but still must sell by the case to customers.
14) The producer gets paid once ALL of the order is sold through: 120 – 240 days later.
15) If the product does not sell through within 120 days of arrival then the LCBO confiscates the remaining order, discounts it, and puts it into a sale warehouse.
16) This frees up more space back in the consignment warehouse so that they can trap more agents into over-shipping and then the LCBO can punish them for trying to treat Ontario like a free enterprise liquor system.
Oh, and if the LCBO decides to add your product to their regular merchandise, you’ll be out of luck as it’ll probably sell for less than you can (and your hotel and restaurant customers are paying for exclusivity in a lot of cases, so they’ll stop ordering through you if it’s available in the LCBO retail stores).
