UWindsor Lance: LCBO launch grocery store alcohol sales

UWindsor Lance
Issue 26, Volume 85
Jan. 9, 2013
Jon Liedtke

Outgoing Ontario Minister of Finance Dwight Duncan used New Year’s Eve day— the busiest day in the province for alcohol sales— to announce a new pilot project for the Liquor Control Board of Ontario.

Within 12-18 months, 10 LCBO Express stores will be opened within grocery stores and certain LCBO stores will be renovated to include VQA Destination Boutiques.

According to a news release published by the Ministry of Finance, the LCBO Express stores would offer Ontario wine, spirits and beer, while the VQA Destination Boutiques would offer an expanded selection of VQA wines than traditional LCBO’s provide currently.

“[The announcement is] in response to customer demand and consult,” said Aly Vitunski, a spokesperson for the finance minister, adding that, “People are talking
about a need for greater access, a bit more convenience … we’re answering what the people have asked for.”

While the 10 LCBO Express stores could potentially be placed within 24-hour grocery stores, Vitunski emphatically made clear that they would be managed and
staffed with LCBO employees and abide by local LCBO hours.

When asked if there was a demand for an expansion of hours, Vitunski responded,

In 2011-12, the LCBO generated $4.710 billion in revenue (up $218 million or (4.9 per cent) in 2010-11), and the province is hoping to generate additional revenue from the new store formats.

The proposal is being welcomed from individual craft beer brewers from across
the province.

At home, Walkerville Brewery manager Chris Ryan commented that he would welcome the pilot project if it provided craft brewers and local wineries better access to market.

Matt Janes, the owner of St. Thomas’ Railway City Brewing echoed similar sentiments. “What we would like to see [for] those stores to focus on Ontario craft beers, so that we have a higher profile in those stores than the conventional or major breweries,” said Janes.

Essex Pelee Island Coast Wine County president Tom O’Brian believes that the
LCBO Express stores will focus on selling low cost alcohol “that most people will buy while just casually looking for groceries” instead of Ontario wines. But he’s excited for the VQA Boutique stores because it demonstrates a commitment from the province to help “support for the growth of the Ontario wine industry.”

Not everybody is eager about the proposed expansion, however, with Progressive
Conservative finance critic Peter Shurman described the announcement as “absolute and utter nonsense.”

“In what I can only describe as a cynical move, [Duncan] used New Year’s Eve day, arguably one of the highest volume days in the liquor stores, to say to consumers, ‘I’m going to help you, “‘ argued Shurman. “But I don’t believe he’s going to help … he’s going to launch a pilot project of 10 food stores and five wine boutiques to see how it works.”

Shurman touted Tim Hudak’s latest white paper, “A New Deal for the Public Sector,”
which calls for the privatization of Ontario’s retail monopoly on alcohol sales.

Shurman sees two problems with the system currently, saying there’s no competitive aspect to the LCBO, and as such, “the selection at the LCBO is what the LCBO decides it is going to be.” “We want to treat people like adults,” he said.

Shurman also argues the LCBO “locks away tens of billions of dollars that are equity that are owned by the taxpayers” while it engages in a business which should
arguably be run by the private sector.”

While privatization will undoubtedly result in a significant loss of jobs— roughly 7,700 full-time, casual employees and product consultants according to the LCBO website— Shurman had little to say regarding the job losses.

“I have a feeling that if they know the liquor business as well as they suggest that
they do, there would be that number of jobs and more in the private sector looking to hire them,” stated Shurman.

Many have questioned whether or not the government’s proposal was a reaction to
Hudak’s plan, but Vitunski made clear that was not the case.

“We’re the government, we don’t just make knee jerk decisions, especially when it comes to alcohol,” said Vitunski, adding, “this is something that’s been in the works for quite some time … it happens that it came public now. There’s a ton of thought
[which] was put into this … well over a year worth of work behind the scenes, so
this is definitely not a reaction.”

While Hudak and the PCs may want a fully privatized liquor system in Ontario, the
craft brewers themselves are both wary and full of trepidation.

“If the LCBO was completely disbanded and we had to market through independent comer stores and grocery stores, that would be a huge disadvantage for the craft brewers in Ontario,” said Janes, adding, “We would have a very difficult time getting any shelf space because we believe that Molson and Labatt would just go in and so overwhelmingly dominate the shelf space available; there would be very little left for the small brewers.”

While Walkerville Brewery’s Ryan acknowledges that the LCBO limits consumer choice, he concedes that he’s not sure if being fully privatized is the right thing

“I guess you’d have to look at the big picture and ask, ‘how is it going to change?’
and ‘how is our access to market going to be better?”‘ commented Ryan. “Sure, it’s
going to be available in more places, but are we going to have access to those places that are going to be selling it, or is it going to be limited?”

Shurman doesn’t share the same concerns but has a few suggestions for the Craft Brewing Association and its membership if, as a body, they wish to be taken more seriously.

“You guys have got to get on the same page,” said Shurman. “You can talk to ten
craft brewers and you can get ten opinions. These guys want an association … [well]
take that association and put forward a united opinion about how things should be done, and we’ll be the first ones to look at it.”

UWindsor Lance
LCBO launch grocery store alcohol sales
Issue 26, Volume 85
Jan. 9, 2013
Jon Liedtke
Page 4

Jon Liedtke was the Features and Opinions Editor, Advertising Manager and Deficit Consultant at the UWindsor Lance.


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