Quotulatiousness

July 21, 2024

LCBO strike reportedly settled

Filed under: Business, Cancon, Government, Wine — Tags: , , — Nicholas @ 03:00

A tentative deal was announced on Friday afternoon, then un-announced after the LCBO claimed the union had added financial demands to the return-to-work conditions after the contract itself had been agreed, and then on Saturday, re-announced. If the deal is ratified by the union, LCBO stores across Ontario should re-open on Tuesday.

It was the first LCBO strike in Ontario history, and it’s open to debate whether the union members will get all that much for their two-week unpaid break. The National Post‘s Chris Selley thinks not, calling it the “Stupidest. Strike. Ever.”

“LCBO at Parkway Mall” by Xander Wu is licensed under CC BY-SA 4.0 .

A week into the strike, a scant 15 per cent of Ontarians told Leger marketing that shuttered LCBO outlets had “affected (them) personally”. Only 29 per cent said they felt the government should legislate or arbitrate LCBO workers back into stores as soon as possible. Eleven per cent said they didn’t even know the strike was happening. And 32 per cent said they had explored “alternative locations” to buy booze, of which there are nowadays myriad.

Many more explored those opportunities in week two of the strike, I suspect, as fridges and wine racks were depleted. That’s potentially bad news for the LCBO’s future retail market share. But you didn’t even need an alternative to the LCBO: With a few days’ planning you could get all your regular brands delivered for free. Delivery and wholesale options were running as normal. Restaurants and supermarkets supplied by the LCBO were still supplied, and though there were reports of empty shelves at some supermarkets, that wasn’t truer than normal at the one I visit.

[…]

So this all looks like a terrible miscalculation by union leadership on behalf of its members — both a fundamental misreading of who had leverage, and a bizarre tactical choice to make the strike first and foremost about expanding the sale of ready-to-drink cocktails and seltzers (RTDs) to supermarkets and convenience stores.

Not wages; not benefits; not the number of full-time positions — things people can at least relate to — but where you can and cannot buy a White Claw or a Caesar in a can. Did they really think people would care?

Near as I can tell, it was an attempt to make this about the LCBO’s retail future: RTDs are a big and growing slice of the alcohol market in Ontario, only accessible (before the strike) at the LCBO. OPSEU wanted us to believe that by allowing supermarkets to sell them, Ontario would make no profit on them. And that’s their baked-in advantage: An incredible number of Ontarians, including far too many journalists, cannot wrap their minds around the notion of the government taking its cut at wholesale rather than retail.

Still, this gambit clearly fell flat.

Update: Fixed broken link to NP.

July 14, 2024

When the Ontario Progressive Conservatives backed away from LCBO privatization

Filed under: Business, Cancon, Politics, Wine — Tags: , , , , , — Nicholas @ 03:00

In the National Post, Terence Corcoran posts an excerpt from last year’s The Harris Legacy: Reflections on a Transformational Premier edited by Alister Campbell:

“LCBO at Parkway Mall” by Xander Wu is licensed under CC BY-SA 4.0 .

Almost 30 years ago, in 1995, the Ontario Progressive Conservative government led by Mike Harris promised to privatize the Liquor Control Board of Ontario (LCBO). “We will sell off some assets, such as the LCBO,” said the party’s famed election document, the Common Sense Revolution (CSR). The LCBO could have been a true privatization — a full-fledged divestiture of a government monopoly into a new open and competitive market, but it never happened.

The failure to privatize the LCBO, lamentable from a consumer and economic perspective, remains a significant lost opportunity to demonstrate the benefits of privatization. If Harris had successfully de-monopolized the alcohol market, the whole concept of privatization would have been given a major boost. Instead, the government backed away from privatization of the alcohol market, preferring instead to allow the corporation to substitute modern marketing and retail razzle-dazzle to give the false impression it was offering the public the best of all worlds.

The LCBO failure is also a demonstration of the degree to which the Common Sense Revolution’s starting principles fell short in grasping the essential benefits of private versus public ownership and control. Neo-liberalism isn’t exactly a fine science. The Wikipedia entry on “Neo-liberalism” is a 30-page effort (including 400 footnote links to hundreds of warring academic papers), reflecting an economic and ideological scramble that dates back more than a century. But when the Harris government came to power, major elements of the free-market model were often overshadowed by fiscal policy objectives. With the LCBO, the Harris government veered off the neo-liberal course in pursuit of standard political objectives.

In 1995, the LCBO was a government owned and operated province-wide corporation that controlled liquor and wine wholesale and retail markets. Another private monopoly player, the Beer Store chain, while owned and operated by the brewing industry, was also essentially a government-sanctioned beer monopoly. The CSR neo-liberal objective should have been to privatize the alcohol market by selling the LCBO, deregulating the Beer Store monopoly and allowing beer sales through supermarkets and even corner stores. More importantly, dismantling the LCBO would allow other corporations to enter the alcohol retail business and provide consumers much more choice, which has been the Alberta experience. Notably, Alberta achieved a successful and deregulated approach without sacrificing provincial revenues.

The neo-liberal objective of privatization is to benefit consumers and enhance economic productivity through competition. Instead, the Harris government fell into the fiscal policy trap that routinely captures politicians, bureaucrats and corporate insiders. Instead of aiming to benefit consumers, the objective soon became how to maximize the fiscal return to government. Never mind the consumer and the market. The objective became preserving — and enhancing — government revenues.

At the time, anti-privatization advocates frantically pointed at the Alberta experience of privatization of their provincial liquor monopoly, which (briefly) generated a lot of retail horror stories that Ontario newspapers gleefully republished (and, likely, emphasized out of proportion to the actual Alberta market). You can still hear Ontarians casting aspersions on the Alberta market as if nothing at all had changed after the initial rough patch. From what I’ve heard from Albertans, they have far wider choices of alcoholic beverages in stores much more conveniently sited with better open hours than anyone in Ontario enjoys. The Alberta government still gets at least as much in tax revenues from alcohol sales without needing to be in the distribution or retail business. It doesn’t seem to be the utter disaster that Ontario media portrays it to be … rather the contrary.

July 7, 2024

Ontario’s LCBO strike may be both justified and counterproductive

Filed under: Business, Cancon, Government, Wine — Tags: , , , , , — Nicholas @ 03:00

Ontario’s main importer and distributor of wine, beer, and spirits is now facing its very first actual strike, as the negotiators couldn’t come to an agreement by the strike deadline on Friday morning. On the face of the dispute, the union certainly has some solid grounds for the strike, as pay hasn’t been keeping pace with (official) inflation and far too many of the LCBO’s workforce are on work schedules that keep them from earning full-time wages. On the other hand, over the last decade or so, both Liberal and Progressive Conservative provincial governments have been making piecemeal changes to the market so that the LCBO is far from the only place Ontario drinkers can purchase their preferred booze. Just off the top of my head, here are some of the alternative options now available to Ontario consumers:

“LCBO at Parkway Mall” by Xander Wu is licensed under CC BY-SA 4.0 .

  • The Beer Store, Ontario’s other (foreign-owned) booze oligopoly for beer and cider is still operating normally at all their retail locations and agency stores. They also have online ordering for delivery available to ordinary consumers.
  • The LCBO is still offering online sales — not same-day, but free delivery.
  • Ontario’s vast array of craft brewers are still able to sell individual cans or bottles of beer from their bottle shops or storefront locations (pre-packaged 6-, 12-, 24-container or other types are still limited to the Beer Store oligopoly, of course).
  • Ontario’s wineries are similarly still operating normally for retail sales at the winery or (for a few older wineries who still have grandfathered privileges from earlier licensing regimes) stand-alone retail stores.
  • Ontario’s much smaller — but growing — number of distilleries are also operating normally and are able to sell their locally produced whiskey, gin, vodka, etc. from their tasting rooms/bottle shops.
  • Many, many grocery stores in the province now sell wine, beer, or both, and are all operating normally. They may be slower to replenish the shelves as the LCBO’s limited number of non-union staff will be handling re-supply.

In addition, if the strike continues for more than two weeks, the LCBO will open a select number of their stores for limited hours across the province (again, limited by the number of non-unionized staff available to operate the stores). With all of this (and I’m sure I’m missing some options in my list), consumers may begin to draw the conclusion that the LCBO isn’t as essential as it once was:

On Thursday evening, Colleen MacLeod, chair of the team bargaining on behalf of government liquor-store employees, declared the summer of 2024 utterly ruined.

“Tonight, (Premier Doug) Ford’s dry summer begins,” said MacLeod, of the Ontario Public Service Employees Union (OPSEU), hours before the first ever strike in the Liquor Control Board of Ontario’s (LCBO) history became official.

Desperate? Delusional? That’s up for debate. OPSEU’s press release announcing the strike suggests “delusional.” At one point it claims the LCBO is “Ontario’s best-kept secret.”

What could that possibly mean?

The release then quotes OPSEU president J.P. Hornick as follows: “We told Ford not to ruin everybody’s summer, but now he’s closed the Science Centre and forced a dry summer for Ontarians by refusing to offer a deal that would be good for LCBO workers and Ontario.”

The Ontario Science Centre is a tired old children’s destination in North Toronto that has been neglected in every way by consecutive provincial governments. I’m quite sure few people in Ottawa, Windsor or Thunder Bay have ever even heard of it. Mashing it together with the LCBO, just because OPSEU represents employees at both, suggests the union really doesn’t understand the fight it’s getting into.

If the Ford government is willing to dig in its heels and fight — which isn’t something it’s particularly known for — this could be a great win for the Ontario consumer.

It’s not 1990. The LCBO shutting the doors to its retail stores is really only a minor pain in the rear end, thanks to years of piecemeal, needlessly complex and and too-slow but nevertheless significant liberalization that really kicked into gear under former Liberal premier Kathleen Wynne. (Ford is often mocked for being obsessed with alcohol, but Wynne was nearly beyond parody. If her government woke up in a crisis Monday morning, it was safe to say she’d find herself announcing more beer and wine in supermarkets by Thursday afternoon.)

Anecdotally, as I was in on Thursday picking up a small selection of wine and beer, I overheard a conversation with one of the staffers and another customer where the staffer didn’t believe there’d actually be a strike and that the only result of the brinksmanship at the bargaining table would be that they would have to do more re-stocking next week after the (understandably) higher sales during the past week.

May 29, 2024

Ontario’s long and winding (and subsidy-strewn) road to beer in convenience stores

Filed under: Business, Cancon, Government, Wine — Tags: , , , , , , , — Nicholas @ 03:00

Apparently I’ll have a little bit more to celebrate on my birthday this year as the Ontario government’s glacially slow-to-change alcohol sales rules are being liberalized as of September 5th to allow all the province’s convenience stores to begin selling beer and wine:

“The Beer Store” by Like_the_Grand_Canyon is licensed under CC BY-NC 2.0

Premier Doug Ford promised Ontarians beer in corner stores, supermarkets and big-box stores, and by God he has delivered. As of Sept. 5, all Ontario convenience stores meeting eligibility criteria will be allowed to sell beer, wine, cider and pre-mixed drinks. As of Oct. 31, the privilege will be extended to all grocery and big-box stores. The province says it expects as many as 8,500 new booze-procurement sites to come online under the new regime. By Ontario standards, it’s absolutely revolutionary.

The new regime is also, of course, hilariously complicated. And absurdly, offensively expensive.

It is fair to describe the new regime as somewhat more competitive, and certainly more convenient. In addition to offering potentially thousands of new locations, supermarkets (including the roughly 450 already licensed) will be able to offer volume discounts on beer — i.e., a 24-pack will cost less per bottle than a six-pack. This was a privilege hitherto reserved for The Beer Store, the American-, Belgian- and Japanese-owned conglomerate that dominated beer sales in Ontario from the end of Prohibition until fairly recently.

Private retailers will even be able to set their own prices, which until now has been considered blasphemy.

It is not fair to describe the new regime, as the government does, as an “open” market.

Near as I can tell, Ontario will by 2026 have the following retail environments in place:

  • The Beer Store. Smelly, surly, and the best-available value. Only beer — no cider or mixed drinks. It’s in the name.
  • LCBO locations. Government-run liquor stores retain their near-absolute monopoly on hard liquor sales, in addition to selling beer (especially craft beer, in which The Beer Store’s owners aren’t so interested), wine and everything else.
  • LCBO- and/or The Beer Store-branded “agency stores” in rural areas, which sell everything the LCBO does, but operate inside of convenience stores, small supermarkets and other local businesses, and are staffed by non-government employees.
  • The existing supermarkets licensed to sell beer, cider and wine (and in rare cases all three!), plus scores of new outlets — the new 8,500 new locations.

The Beer Store maintains a monopoly (in urban areas) on wholesale for bars and restaurants and on refunding cans and bottles, although its new “master framework agreement” (MFA) doesn’t even oblige it to maintain its current number of locations — which in urban areas have been dwindling rapidly. I’m a 17-minute walk from my nearest Beer Store. The house I grew up in, in the heart of midtown Toronto, is a 45-minute walk. I’m not schlepping a leaky garbage bag full of empty cans either distance.

September 19, 2017

Ontario is getting exactly what they deserve in legalized marijuana

Filed under: Cancon, Government, Law — Tags: , , , — Nicholas @ 06:00

Pessimists, you can collect your winnings at the till. Optimists? Haven’t you learned yet? You expected a vibrant, dynamic free market in pot where your favourite budtender would be able to offer you a wide selection of high quality product to choose from? Forget it, Jake, it’s Ontario. Chris Selley explains why the pessimists got it right in the betting on how Ontario would choose to implement the legal marijuana market in 2018:

For nearly 15 years, I and other free market lunatics have been trying to impress upon Ontarians just how insane our liquor retail system is. Yet we still hear the same ludicrous arguments in its favour. “The LCBO makes tons of money for the province.” (Alberta makes tons of money from liquor sales too, without owning a single store.) “Public employees can be trusted to keep booze out of children’s hands.” (The Beer Store isn’t public. Nor are the scores of privately run “agency stores” in rural areas across Ontario.) “The LCBO provides good jobs.” (Not to real product experts it doesn’t — they would be far better off in a free market jurisdiction. And if the government’s role is to make good retail jobs, why not nationalize groceries?) “LCBO stores are pleasant. Liquor stores in the U.S. are gross.” (Nope! You’re just going to the wrong liquor stores.)

This hopeless mess is the foundation for Ontario’s new marijuana plan — and we’re hearing the same arguments in its favour. Last week, two columnists in the Toronto Star and one in the Globe and Mail spoke approvingly of the fact it would create “good unionized jobs.” The two Star columnists also mentioned the money that would accrue to the treasury.

“I’m fine with the profits going to the public purse instead of private businesspeople,” wrote one.

“Why wouldn’t the government seek to maximize revenues in the same way that it profits from alcohol and tobacco sales?” asked the other.

Even after all these years, it makes me want to tear my hair out: for the love of heaven, the “high-paying jobs” motive and the “profit” motive are at odds with each other. You cannot claim both as priorities. One way or the other, the government will take its cut on marijuana sales. The overhead costs of running its own stores, paying its own employees government wages, will simply eat into that cut.

If you can live with Ontario’s liquor situation, but you think your favourite budtender should be able to get a government licence to keep her “dispensary” up and running after legalization kicks in, my sympathy is non-existent. You either support consumer choice or you don’t. Ontario doesn’t, and that will never change until tipplers and tokers take up arms together.

May 12, 2017

“Maybe this is creeping privatization after all. It’s certainly worth a shot”

Filed under: Business, Cancon, Wine — Tags: , , , , — Nicholas @ 03:00

Chris Selley on the neither one thing nor the other state of alcohol retailing in Ontario:

On Tuesday the government enumerated 76 new Ontario supermarkets where, by Canada Day, you will be able to buy beer. That will make a total of 206 Ontario supermarkets where you can buy beer — an artificially limited selection of beer, only in six packs and singles and only during the same bankers’ hours as the LCBO and Beer Store. But still. That’s about one-third as many supermarkets selling beer as there are LCBO outlets selling beer; add in the 212 rural agency stores that sell wine, liquor and beer, and you’ve got almost two-thirds as many private enterprises selling beer as you have government bottle shops.

This could help prove several useful concepts that deserve much wider acceptance in Ontario. One is that it’s very easy for the government to make money off liquor sales without retailing liquor itself. Indeed, it’s easier; that’s why so many governments do it. The supermarkets buy the beer wholesale from the LCBO; the LCBO doesn’t have to worry about paying civil servants to sell that beer or running the stores.

Another is that the private sector can be counted on to keep liquor out of children’s hands. Indeed, with inspections and draconian fines in place, it can probably be trusted more. My observations suggest LCBO employees certainly card everyone who should be carded, but it’s nothing like it is in the U.S. I’m almost 41, not in especially good nick, and I still get asked about half the time.

Might Ontarians develop a taste for all this convenience? The hard cap on beer-in-supermarket licences is 450; having doled them all out, including agency stores, that would mean about half the liquor outlets in Ontario were privately run. And people might start to notice the bizarre inconsistencies: why can the Walmart on Bayfield Street in Barrie sell only beer, and only in six packs, while the Walmart on Hays Boulevard in Oakville can sell beer and wine, and meanwhile Hope’s Foodland in Novar, Mac’s Milk in Craigleith, Redden’s campground in Longbow Lake and Lac des Mille Lacs Bait and Tackle in Upsala can sell beer, wine and hard liquor — and smokes and fireworks and beef jerky and bread and eggs? Why can scores of convenience stores sell everything alcoholic as agency stores, but other convenience stores aren’t even eligible to apply for the new wine and beer licences?

April 17, 2017

QotD: The dubious “value add” of the LCBO

Filed under: Business, Cancon, Government, Quotations — Tags: , , , , — Nicholas @ 01:00

The liquor board’s cocktail recipe of the month, offered on its website, is for “gin and lemonade,” which you make with a shot of gin and some lemonade. The gin is cherry, so there’s that. Its three recommended beers of the month are themed for the hockey playoffs. They are — I am not kidding — Molson Canadian in a bottle, Molson Canadian in a can, and Molson Canadian in a larger can. The value the LCBO’s adding that a private retailer couldn’t is not obvious.

David Reevely, “LCBO union uses government’s rhetoric against it in brewing labour battle”, National Post, 2017-04-06.

March 24, 2017

The LCBO “phones in” their Ontario VIP selections

Filed under: Business, Cancon, Wine — Tags: , , — Nicholas @ 03:00

Michael Pinkus on the odd choices of wines to celebrate some Ontario wine luminaries:

Let’s be honest, the LCBO is lackadaisical, at best, when it comes to promoting Ontario wines, and they do it with such a blasé attitude it is embarrassing in the way they continue to absolutely fail the people of Ontario … let me explain and expand.

The main feature of the April 1, 2017 release is “Visionaries, Innovators and Pioneers” (VIP) – on a global scale – here you’ll see names you recognize and wineries that are household names (or one’s that should be) – people like Angelo Gaja (Italy), Ben Glaetzer (Australia), Ken Forrester (South Africa), Michel Chapoutier (France) and Nicolas Catena (Argentina) and for each they pair a wine to go along with them … I question the wine selection for these iconic wine luminaries, but what the hey, sometimes those iconic wines are sold out (icon wines do that) and you then have to go for secondary wines by those producers.

Then I reached the part with our local VIPs: Moray Tawse (true, a more recent member of the VIP club and in my opinion kind of an easy choice by the LCBO), even more lazy are the wines selected, far from what I would call his “iconic” ones; but that seems to be par-for-the-course in this release. Tawse makes single vineyard / single block wines that are “the bomb”, yet the LCBO chose a “Growers Blend” and a “Sketches” wine, seriously?

But the one that incensed me the most was Chateau des Charmes, not for the man they named, Paul Bosc Sr., who is a Visionary, Pioneer AND Innovator in Ontario, but the wine that was chosen to represent him: Cabernet Icewine? When I saw that, you could have knocked me over with a feather; what happened to Gamay Noir Droit? Single vineyard varietal offerings? Sparkling wine? Or even Equuleus? But instead of showing off these iconic / original table wines the LCBO goes for the easy layup of Icewine; which isn’t even what Bosc is known for (though he makes excellent versions of it), that honour should have gone to Inniskillin (Donald Ziraldo and Karl Kaiser)

September 18, 2016

When you’re a monopoly, what’s your attitude to customers? “Sod the proles!”

Filed under: Business, Cancon, Wine — Tags: , , , — Nicholas @ 04:00

Rick VanSickle vents about the LCBO’s amazingly tone-deaf marketing:

Sorry, LCBO, but I don’t get you. Such a lame-o release on the birthday of our great country July 1, with paltry few Canadian wines released to celebrate our big day, and presumably a few folks out there looking to party with local wines, and then suddenly in the middle of September, you drop the big one.

What up with that? I mean, the Sept. 17 issue of the Vintages mag, with pages and pages of features on Ontario wines and the biggest selection of local wines of the year — am I missing something? Is this some sort of key date for us in Ontario and Canada?

I want to be there during your obviously very detailed board meetings to listen in on the thinking behind your planning. When you get to, say, July 1, does anyone go: “Hey, that’s Canada Day, let’s flood the aisles with great Canadian wine. It’s what the people want, the people who pay for our largesse, the people we work for.” Well, no, of course not, that’s ridiculous.

Instead, as they count down the calendar, they go: “OK, what do we have for the week of Sept. 17? Why, there’s absolutely nothing going on, so let’s make it the biggest Ontario wine release of the year! Yes, perfect!”

Of course, what does it matter anyway? It’s not like the guy down the street is doing any better because there is no guy down the street. It’s the beauty of a monopoly — guilt-free decisions because there is no wrong decision if you are the only game in town.

For example (stay with me here, we’ll get to the wine), if the government decided it was going to force a shoe-store monopoly on its populace and came to the conclusion at a big swanky retreat where such decisions are made (pure speculation) that it would be so cool to put out a big display of Converse runners at all their stores on the first day of winter. No winter boots, no mukluks, just running shoes and sandals. Wouldn’t that be hilarious? lol.

It’s funny but not really funny. We just accept that it’s wrong and carry on like a monopoly is beyond reproach, beyond accountability.

For the record, the Canada Day Vintages release featured a cover story called: South Side Story: Wines of Southern France with 12 pages of spectacular photography and enticing bottles of French wine proudly displayed with glowing reviews and effusive praise for all.

September 26, 2015

The LCBO backs away from auctioning rare wines in Ontario

Filed under: Business, Cancon, Wine — Tags: , , — Nicholas @ 04:00

Rick Van Sickle on the LCBO’s recent decision to hand over the rare wine auction market to a private auctioneer:

Quietly last week, Ontario’s booze monopoly finally threw in the towel over its glitzy rare and fine wine auctions and awarded the contract to an independent auction house — another case of letting private industry do a job that the LCBO couldn’t handle.

Canadian auction house Waddington’s will now conduct the auctions under a special licence through the LCBO.

The company added a new addition to their portfolio of fine art and luxury goods – Waddington’s Fine Wine and Spirits Auctions. “Ontario wine enthusiasts will now be able to better manage their cellars of fine wines and spirits with this connection to the enormous world wine market,” said Waddington’s President Duncan McLean.

The Toronto-based, Canadian-owned auction company was awarded the exclusive contract to provide fine wine and spirit auction services in Ontario under the authority of the LCBO, a first for an Ontario auction company. Waddington’s conducted the LCBO’s Vintages Fine Wine and Spirits auctions from 2009 until 2013.

The inaugural live fine wine auction will be conducted Dec. 12 at Waddington’s Toronto gallery, and an online fine wine auction will be offered Nov. 23-26. These auctions launch what will be a regular schedule of wine and spirits auctions and events for which Waddington’s is currently accepting consignments. All wines consigned are stored in a secure, temperature, light, and humidity-controlled wine vault.

Straight Up: The Issue of Alcohol in Ontario

Filed under: Cancon, History, Law, Liberty, Wine — Tags: , , , — Nicholas @ 03:00

Published on 24 Nov 2014

A documentary exploring the peculiar system of alcohol retail and distribution in Ontario.

The beverage alcohol system in Ontario is unique in the world. A government monopoly and a few private companies enjoy preferential access to the province’s consumers. Meanwhile, about 300 Ontario breweries, wineries, and distillers face a number of bureaucratic and structural barriers that effectively shut them out of the market in Ontario. This film tries to explain the origins of the beverage alcohol system in Ontario, and what it means for producers and consumers in the province today.

H/T to Eric Beiers for the link.

September 24, 2015

Ontario takes baby steps toward liberalizing the beer market

Filed under: Bureaucracy, Business, Cancon, Politics — Tags: , , , , — Nicholas @ 05:00

At the Toronto Beer Blog, a less-than-enthused look at the latest changes to minimally change the just-barely-beyond-prohibition-era rules for selling beer in Ontario:

This has been a noisy day in the wonderful world of beer sales in Ontario. The Liberal government released the details of the new 195 page master agreement between The Beer Store, the Province (LCBO), and the new kids on the block, grocery stores.

Much of the information is what we heard when they announced it with the budget. Some more details have come out. If you read my thoughts in April, you will remember I was not happy. I’m still not.

The good from today’s news is there are some clear definitions of what constitutes a grocery store (10 000 sq/feet dedicated to groceries, not primarily identified as a pharmacy); that the 20% craft shelf space is for both grocery stores and The Beer Store, and that there cannot be a fee to get listed (though we all know how effectively the province enforces pay-to-play in bars around the province); and that they have some novel system to divide sales licenses between both huge chains and independent grocers.

The old news about shared shipping for smaller breweries and no volume limit for a second on-site retail location are accurate, and very good news.

But here’s the thing: This is just more Ontario political craziness.

This is to “level the field”, apparently for small brewers, who nobody would suggest get a fair shake in the current system.

But what could have been an actual leveling of the playing field, turned out to be more insanity and government control and meddling. And remember, I’m saying that as a sworn lefty nutjob, who generally thinks having controls and regulations is a good thing.

Remember, these are not the ravings of a far-right-wing free-enterprise-maniac … these are the regrets of a self-described “sworn lefty nutjob”:

A level playing field would be one where anybody could apply for a license to sell beer, and do it. A brewery can pick and choose who they sell to, as a retailer can choose who they do business with. Nobody would need to guarantee a percentage of shelf space, because the market would control what products were successful and got shelf space.

This isn’t a level playing field, it’s just a bunch of new rules to try to counter how horrible we’ve allowed our playing field to get. Yes, it will be more convenient for people who shop at one of the 450 stores that have a license. But the agreement still favours The Beer Store heavily (for instance, grocers are limited in the volume they can sell. They can exceed the limit, but then have to pay a fine to the LCBO who distribute it to, you guessed it, the breweries who own The Beer Store to offset their lost sales. Seriously).

January 22, 2015

Rumours of privatization in Ontario’s liquor control monopoly?

Filed under: Bureaucracy, Cancon, Government, Law, Wine — Tags: , , , — Nicholas @ 09:57

In the latest issue of Michael Pinkus Wine Review, Michael talks about the hints and portents (dealing with the Ontario government requires a certain amount of Kremlinological observation skills) that a tiny measure of privatization may be coming:

There’s a rumour in the wind that a certain amount of privatization is coming to Ontario (wouldn’t that be nice), but I wouldn’t get my hopes up about it just yet – no time line has been given and I am sure that ‘more study’ is necessary … and of course, if track record is any indication, this government will find some way to either screw it up or make it such a complicated piece of legislation that it’ll take years to get through all the red tape behind it. I once heard Jerry Agar, of NewsTalk 1010 fame, say (and I’m paraphrasing here) ‘if you want something screwed up get government involved’; he’s a proponent of the private sector because they can do it more efficiently than government if only ‘the man’ would just get outta the way … I would have to agree with him here. So far the government has made a mess of our liquor system that even repressed, despotic and 3rd world countries have better access to alcohol then we do.

Sadly, I believe it might be too little too late for some of Ontario wineries who have suffered this long, but might not be around to see the light at the end of the tunnel (if and/or when it comes). Yes, this might be the end of the line for a number of our precious wineries and we only have ourselves to blame for their demise. They have been as vocal as any sector, crying for help, not necessarily a hand out (which the grape growers seem to get) as much as a hand up – basically they’ve been pleading with each government: “please give us access to (our own) market (at the very least) and we’ll show you what we can do”, all to no avail.

Why the pessimistic attitude? Let’s look at the facts. It takes some rather deep pockets to own a winery in Ontario, that or a good credit rating, because money is the number one thing required to open the doors. But making it is more of an uphill battles then in any other business I this province. Post-1993, when the majority of the wineries around today opened their doors, your cellar door is the only place you can sell your wine – sure you could tap into the LCBO and the restaurant market, but that’s it. And although recent federal regulations have been lifted regarding the selling and especially shipping of wine across the country, many provinces have yet to enact their own legislation governing the practice, hence leaving the entire topic, not to mention hundreds of wineries, in limbo, unable to tap the rest of the country as a market for fear of breaking the law. With so few avenues to sell home-grown wine the government has basically handcuffed the industry – let alone the number of asinine rules that govern the industry from within (more on that next time) – it has all been put in place it would seem, so that wineries are destined to fail; that they remain open is a testament to their resolve and passion.

August 20, 2014

New report calls for Ontario to break up the LCBO

Filed under: Business, Cancon, Economics, Wine — Tags: , , , , , — Nicholas @ 13:33

In the Toronto Star, Richard Brennan reports on a new study by the C.D. Howe Institute calling for the province to join the modern era:

The “quasi-monopoly” LCBO and The Beer Store have hosed Ontario consumers long enough, a C.D. Howe Institute report says.

The right-wing think tank said the Ontario government should strip them both of their almost exclusive right to sell beer, wine and spirits, suggesting the report proves that opening up to alcohol sales to competition will mean lower prices.

“The lack of competition in Ontario’s system for alcoholic beverage retailing causes higher prices for consumers and foregone government revenue,” states the 30-page report, Uncorking a Strange Brew: The Need for More Competition in Ontario’s Alcoholic Beverage Retailing System, to be released publicly Wednesday.

The report includes tables comparing Ontario beer prices to other provinces with greater private sector involvement, particularly with Quebec, where a case of 24 domestic beers can be as much as $10 cheaper and even more for imported brands.

Since 1927, when the Liquor Control Act was passed, the Liquor Control Board of Ontario and the privately owned Brewers Warehousing Company Limited have had a stranglehold on alcohol sale in the province.

“The Beer Store’s quasi-monopoly of beer retailing is … an anachronism,” the report says, referring to the foreign-owned private retailer that is protected by provincial legislation.

May 29, 2014

The “Pairs Perfectly” campaign

Filed under: Cancon, Wine — Tags: , , , , — Nicholas @ 09:03

Just as the Ontario election writ was dropped, the small wineries of Ontario started pushing the Pairs Perfectly campaign, to move the province toward a more mature wine retailing model (like British Columbia’s). While I’d prefer a full privatization model (like Alberta’s), at least the move to allowing some private wine stores would be an improvement. Despite the quick work to launch the campaign, Michael Pinkus says it’s already being forgotten on the hustings:

Ontario is deep into an election campaign and the best thing done so far is a little initiative from the Wine Council called “Pairs Perfectly”. They’ve backed it with radio and television promos and in truth they make a lot of sense. Ontario is one of the only provinces not to have some sort of private system in place, either along with their provincial monopoly (a la British Columbia) or fully privatized (a la Alberta). This initiative seemed to be already formed and waiting in the wings: no sooner had an election been called than the “Pairs Perfectly” slogan was in my inbox (with its twitter handle @PairsPerfectly, hashtag #PairsPerfectly and website PairsPerfectly.com), articles were written to explain the notion, social media seemed abuzz from wineries to writers to the average-Joe, all were tweeting, re-tweeting, blogging, tumbling, gramming, hooting, hollering, casting, accosting and I initially thought, “Wow, the buzz is really out there, this just might have legs, or at least more legs that that ‘My Wine Shop’ that seemed to go nowhere.”

But 6 weeks is a long time in the political realm, just ask Rob Ford, so much can happen over the course of 6 weeks that can turn the tide on a well-thought-out, well-organized plan of attack. Instead of the Ontario booze media jumping whole hog onto the initiative and writing piece after piece after piece about the benefits of privatization to keep the idea in our collective consciousness, a new issue has come along to polarize: the VQA, which I have repeatedly said is a sham of a system, most notably because of its tasting panel. Now there’s a new horse to ride, a newer and shinier issue to get all worked up about. The VQA is easy pickings because it is so wrong, crushes creativity and stymies’ our winemakers making them think “will this pass VQA”. Every winery has come into conflict with it at least once in its existence and it needs an overhaul (radical? Maybe not, but definitely a big tweak).

[…]

I believe this: Ontario is a mess and is destined to remain that way long after this election season has been put to bed. We already know the Liberals position on privatization of any sort (over their dead body); the NDP seem in lockstep with the Liberals train of thought because it would disrupt union jobs. And the Conservatives, before the campaign the only party willing to talk privatization, have somehow gone mute about the whole issue – as if someone told them not to rock the boat; which makes them the wild card. But if history shows us anything it’s doubtful it’ll get past committee if it ever does come up.

And don’t even get me started on the asinine things happening on the beer side of the ledger. The Beer Store’s cockamamie campaign against corner stores carrying the product that they have a duopoly to sell (with the LCBO), is as misguided and ill-conceived as any I can think of. Does beer not also get sold in corner stores in other provinces? Are all those owners corrupt-minor-sellers? It seems to have galvanized the public against them; especially when people find out they aren’t government controlled; which a vast majority of the province was under the false notion it was. This also took focus away from the larger issue of an open and freer market for all in the alcohol industry (craft brewers, craft winemakers, etc.)

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