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Liquor sales in Ontario up for review

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joey_capps
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Liquor sales in Ontario up for review

Post by joey_capps »

Apparently, the McGuinty Gov't has just announced that they are setting up a commission to review how liquor is sold in Ontario. From what I understand, everything is on the table except the wholesale sale of the LCBO. Time to get out our lobbying caps.

Joe.

P.S. Don't have time right now to search out some links on this. Anyone else find them?

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Post by detritus »


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Cass
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Post by Cass »

I'd say by the end of the week the LCBO union will have TV ads running. They always draw from their warchest when this kind of thing hits the media.

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joey_capps
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Post by joey_capps »

Cass wrote:I'd say by the end of the week the LCBO union will have TV ads running. They always draw from their warchest when this kind of thing hits the media.
You are probably correct. And, I bet Molbatson will anti-up to protect their investment in The Beer Store.

Joe.

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Cass
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Post by Cass »

Here's the press release from today:

Ministry of Finance

Expert panel to review sale and distribution of beverage alcohol in Ontario

Province Ensuring Maximum Value for Taxpayers

TORONTO, Jan. 11 /CNW/ - The McGuinty government is appointing an expert
panel to review the distribution and sale of beverage alcohol in the province,
Finance Minister Greg Sorbara announced today.
"The LCBO is not for sale. However, our government made a commitment to
undertake a thorough review of major assets," said Sorbara. "This is an
opportunity for impartial experts to undertake a comprehensive review of the
industry and recommend ways it can work better."
The review panel will examine the roles of all the participants in
Ontario's beverage alcohol distribution and retail system, including the
government-owned Liquor Control Board of Ontario (LCBO), the privately owned
Brewers Retail Inc., and the retail stores owned by Ontario wineries. The
panel will receive input from the public and stakeholders and make
recommendations in spring 2005.
"The current system is a patchwork of policies and agreements dating back
to the 1920s and the end of prohibition," Sorbara said. "Our government's
focus on achieving results means we're reviewing major public assets and
services to ensure they're operating efficiently and delivering maximum
possible benefits to Ontarians."

The government has given the panel five clear principles to guide the
review:

- Safeguarding socially responsible consumption, storage, distribution
and sale of beverage alcohol
- Convenience, variety and competitive prices for consumers
- Maximizing value to taxpayers
- Ensuring responsible reuse and recycling practices
- Promoting Ontario's products

The panel will be chaired by John Lacey, former vice-chair of the board
of the LCBO, and will include:

- Suzanne Labarge, former vice-chair and chief risk officer of
RBC Financial Group
- Ann Dumyn, former vice-president at SNC-Lavalin, Inc., and member of
the board of governors of Lakehead University
- Gwen Boniface, commissioner of the Ontario Provincial Police

For more information about the panel, please visit
www.beveragealcoholreview.on.ca


Backgrounder

-------------------------------------------------------------------------

REVIEWING ONTARIO'S BEVERAGE ALCOHOL SYSTEM

The government is reviewing provincial assets and services to ensure that
the people of Ontario are getting the best possible service and value.
Ontario's beverage alcohol system comprises the public and private
entities - the LCBO, The Beer Store and wine retail stores - that are involved
in the warehousing, distribution and retailing of beverage alcohol in the
province. The system is a patchwork of policies and agreements dating back to
the 1920s and the end of prohibition.
Over the last 75 years, changing social attitudes, market conditions and
public policy have led other jurisdictions to alter the way that they
wholesale, distribute and sell alcohol. For the first time in decades, the
Ontario government is taking a comprehensive look at the system to ensure it
is delivering maximum possible benefits to Ontarians.

How the review will work

An independent panel will look at the existing system and also examine
best practices and models from other jurisdictions.

The panel's report, to be submitted to government by spring 2005, will be
based on these guiding principles:

- Safeguarding socially responsible consumption, storage, distribution
and sale of beverage alcohol
- Convenience, variety and competitive prices for consumers
- Maximizing value to taxpayers
- Ensuring responsible reuse and recycling practices
- Promoting Ontario's products

The panel will be asked to provide advice and recommendations on:

- How to optimize the wholesale, sale and distribution of beverage
alcohol to consumers while protecting public interests
- How to provide responsible consumer access to points of sale
- The appropriate roles and responsibilities of government in the
beverage alcohol marketplace
- Any related matters that the panel feels are appropriate with respect
to Ontario's beverage alcohol wholesale, retail and distribution
system

During the review, the panel will receive input from the public and
stakeholders with an interest in Ontario's beverage alcohol system. The
panel's report will be made public before any decisions are made.

Beverage Alcohol System Review Panel

John Lacey, Chair
John Lacey served as a member of the board of directors of the Liquor
Control Board of Ontario (LCBO) from 1996 to 2001, and as vice-chair of the
board in 2001-2002. Currently chairman of Alderwoods Group Inc., he is a
seasoned professional in the corporate sector with more than 37 years of
experience in senior executive positions. From January 1999 to January 2002,
he was chairman of the board of directors of Loewen Group, of which he was a
director from December 1998. Lacey has served as president and chief executive
officer of the Oshawa Group, president and CEO of Western International
Communications (WIC); president and CEO of Scott's Hospitality Inc.; and vice-
president, operations, Loblaws Companies Ltd.

Gwen Boniface
As Commissioner of the Ontario Provincial Police (O.P.P.), Gwen Boniface
leads more than 7,000 uniform and civilian members of the O.P.P. Commissioner
Boniface earned a Bachelor of Arts degree from York University and a Bachelor
of Laws degree at Osgoode Hall Law School. She was called to the Bar in
Ontario during 1990, and is a member of the Law Society of Upper Canada. In
1997, she was appointed to the Law Commission of Canada, an independent
federal law reform agency that advises Parliament on how to improve and
modernize Canada's laws. She has been the recipient of the Humber College
Alumnus of Distinction Award and was invested into the Order of Ontario in
2001, and the Order of Merit of the Police Forces in 2002.

Ann Dumyn
Ann Dumyn is currently managing partner of the private consulting company
Arrawac Associates Inc., and corporate director for Aeroquest International
Limited. Dumyn has 35 years experience in business development, relationship
facilitation, project management, social responsibility practice and financial
services. Between 2000 and 2004, she was vice-president, Aboriginal and
northern affairs with SNC-Lavalin Inc., where she developed and managed
business opportunities with governments, agencies and corporate partners in
the power, mining and infrastructure sectors across Canada. Before joining SNC-
Lavalin, Dumyn held a series of senior positions with the Bank of Montreal.
She is a member of the board of governors of Lakehead University and a member
of the board of directors of Habitat for Humanity, Dufferin-Caledon.

Suzanne Labarge
Suzanne Labarge is recently retired as vice-chair and chief risk officer
of RBC Financial Group. She has more than 30 years experience in commercial
and corporate lending, audit, advanced portfolio management and market risk
management. Labarge began her career with the Royal Bank, where she served in
a number of executive positions. In 1985, she joined the federal government as
the assistant auditor-general, and two years later she was appointed deputy
superintendent in the federal Office of the Superintendent of Financial
Institutions. She returned to the Royal Bank in 1995 as executive vice-
president, Corporate Treasury, before assuming the role of vice-chair and
chief risk officer of RBC Financial Group in 1998. She also serves on the
board of governors for McMaster University, and is a board member and former
chair of the Risk Management Association.
For more information about the panel, and its mandate, please visit:
www.beveragealcoholreview.on.ca.

Overview of Ontario's beverage alcohol system

Liquor Control Board of Ontario (LCBO)

The LCBO, established in 1927, is a self-financing operational enterprise
of the Province of Ontario. With 3,280 full-time and 3,283 part-time
employees, the LCBO operates 598 corporate stores across Ontario. In addition,
the LCBO authorizes 196 agency stores located within existing private retail
outlets, typically in remote and rural areas too small to support a corporate
store. Alongside its retail operations, the LCBO is also first receiver of all
liquor commercially imported into Ontario and enforces uniform and minimum
prices.
In 2003/04, the LCBO's net sales (not including PST and GST) were
$3.3 billion, generating a dividend to government of $1.04 billion. The LCBO's
gross sales were $3.9 billion. The LCBO reports to the Minister of Economic
Development and Trade.

The Beer Store/Brewers Retail Inc. (BRI)

Founded in 1927 and initially called Brewers Warehousing, the
organization was established as a cooperative of Ontario brewers to distribute
its products. Over the years the organization has evolved. Today, The Beer
Store sells both domestic and imported products and is owned by Molson Canada,
Labatt Breweries of Canada and Sleeman Breweries. In 2003/04, The Beer Store
accounted for 84.1 per cent of provincial beer sales by volume, with gross
sales of $2.6 billion. With 436 stores across Ontario, the organization has
some 1,700 full-time and 4,000 part-time employees.

Wine retail stores

Ontario has 395 wine retail stores that are owned by the province's
licensed wineries. The stores are allowed to sell only the products of the
winery that owns them. On-site stores (i.e. located at the winery) number 105;
the remaining 290 off-site locations are either stand-alone outlets or housed
within a larger retailer. Two wineries, Vincor International Inc. and Andrés
Wines Ltd., operate the majority of the off-site stores. Free trade agreements
meant that after 1987 no new off-site wine retail stores could be authorized.
Wine retail stores account for approximately 36 per cent of Ontario-produced
wine sales and 15 per cent of total wine sales in the province. For 2003/04
this translated into gross sales of $182 million.

Ontario beverage alcohol manufacturers

The sector comprises 125 licensed wineries, 12 licensed distillers and 41
licensed breweries.

Regulatory agencies and government oversight

The Alcohol and Gaming Commission of Ontario (AGCO)

Reporting to the Minister of Consumer and Business Services, AGCO is
responsible for administering the Liquor Licence Act, parts of the Liquor
Control Act and the Wine Content and Labelling Act, as well as other statutes.
It is a quasi-judicial regulatory agency, with a mandate to regulate the sale,
service, and consumption of beverage alcohol to promote moderation and
responsible use, and to ensure that casino and charitable gaming is conducted
in the public interest, by people with integrity, and in a manner that is
socially and financially responsible.

Vintners Quality Alliance (VQA) Ontario

Operating under an administrative agreement with Minister of Consumer and
Business Services, VQA Ontario is a not-for-profit corporation with delegated
responsibility for administering the Vintners Quality Alliance Act and its
regulations. VQA Ontario enforces quality standards and an appellation of
origin system for Ontario VQA wines.

Disponible en français

www.gov.on.ca/FIN/

-30-

For further information: Contact: Sean Hamilton, Minister's Office,
(416) 325-8679; Manuel Alas-Sevillano, Ministry of Finance, (416) 212-2155

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Post by borderline_alcoholic »

This bodes well: the Government reviewing the Government, with the Chair being the former vice-chair of the LCBO. Nothing like a good independent enquiry. Not much better is Chief No-Risk Officer of RBC, and lest we forget, a Police Commissioner (guess where their interest will lie). There's not a merchandising person amongst them (probably not a drinker, either).

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Jon Walker
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Post by Jon Walker »

My wish list for topics to be considered by the panel are;

- The ability for brew-pubs to have an on site retail outlet for sales. This would help their viability and profitability and also increase our choice as consumers. Growler take outs anyone? The likely reason they'll reject it...drinking and driving.

- Semi-privatized beer stores dealing in micro products, both domestic and imported. Likely reason it'll be rejected...feared lack of market meaning lack of profitibility.

- Slightly OT; Privatized wine stores (like in B.C.) that can sell similar wine products as the Liquor Store but also stuff they privately import. I hate to say it but most of those local winery stores (like the one in my local Loblaws) sell 18 different varieties of crap. Likely reason it'll be struck down...Local wineries would suffer due to increased competition. LCBO sales would be hurt.

- Standardizing beer volumes in glassware at pubs and restaurants. We've discussed the hell out of this but it would at least be nice to have a "standard" as to what is and what is not a pint in this Province. I hate the 14 and 16 oz "pints" many establishments foist on the largely unaware public. Likely reason it'll be rejected...the bar and restaurant lobby fearing extra operating cost to provide standardized glassware. Cost for the LLBO to enforce such a rule change.

- A greater tax cut for micro breweries to further encourage the diversity of the industry and continue variety of products available to the consumer. Likely reason that'll be rejected...pressure from the Macro lobby.

- Reforming the archaic beer importation regulations for private importers. Ask Peter about the nonsense involved in private orders needing strip labelling, lab testing, specialized paperwork and all the other overly bureaucratic hoops the current system imposes. Surely there is a way to streamline this?

I don't seriously think any of this will be considered, let alone adopted. In all likelihood this panel will simply figure out further ways to increase profit for the province and impose more restriction and control on both distributors and consumers of alcohol. More wasted taxpayer's money, more useless discussion and paperwork.

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screw2000
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Post by screw2000 »

The usual suspects speak up (today's Star):

http://www.thestar.com/NASApp/cs/Conten ... alogin=yes

Tim Blakeley
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Post by Tim Blakeley »

Hi Jon.

One of the wishes on your list has already come true.Brew pubs can have retail outlets on site now, and breweries can have onsite bar/restaurants.It became legal a little while ago.

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Post by GregClow »

Tim Blakeley wrote:One of the wishes on your list has already come true.Brew pubs can have retail outlets on site now, and breweries can have onsite bar/restaurants.It became legal a little while ago.
My understanding of the legislation is that establishments with a "brewpub" license still cannot offer retail sale of their beer for off-site consumption, but that those with a "brewery" license can have a single onsite bar/restaurant with a seperate access point from the retail area.

For example, The Granite is no longer a "brewpub" on paper, they are a "brewery" with a tied bar/restaurant. This has allowed them to sell their beer in take-home containers, and has also allowed them to have casks/kegs of their beer on tap at other establishments, neither of which they could do in the past.

Or maybe I'm completely mistaken. :) But I think this is how it was explained to me back when the Granite started selling growlers.

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Post by Cass »

Unfortunately with the Granite (who has an onsite store) you have to physically exit the bar to go to the retail desk, and you cannot go back to the bar if you've purchased growlers. I think this is absolutely stupid (its not the Granite's fault, its the law).

In B.C. you can ask for bottles and they'll bring them to your table and add them to your bill. Or in NY when they'll fill a growler off the tap of anything you want. Now that's off-sales.

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Cass
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Post by Cass »

GregClow wrote:
Tim Blakeley wrote:One of the wishes on your list has already come true.Brew pubs can have retail outlets on site now, and breweries can have onsite bar/restaurants.It became legal a little while ago.
My understanding of the legislation is that establishments with a "brewpub" license still cannot offer retail sale of their beer for off-site consumption, but that those with a "brewery" license can have a single onsite bar/restaurant with a seperate access point from the retail area.

For example, The Granite is no longer a "brewpub" on paper, they are a "brewery" with a tied bar/restaurant. This has allowed them to sell their beer in take-home containers, and has also allowed them to have casks/kegs of their beer on tap at other establishments, neither of which they could do in the past.

Or maybe I'm completely mistaken. :) But I think this is how it was explained to me back when the Granite started selling growlers.
Greg's right, my understanding is that the Granite is a brewery and the pub is their "tied house". So in fact brewpubs still cannot sell beer.

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Post by Cass »

This story made the front page of the National Post today:

http://www.canada.com/national/national ... c36814aed4

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Post by PRMason »

The idea of allowing private beer stores is an interesting one, but mainly for consumers. Currently, the LCBO charges $1.33 per 6 pack to stock and sell a product. This is regardless of price. I seriously doubt that a private beer store could charge that little and make a profit unless it does huge volume. My experience has been that the licensed trade, private retailers all, are going to ask for "incentives" to stock products and the more volume they do, the more they can ask for. Most micros are not in a position to be able to spend money on this and so would be excluded from the process.
The apparent solution would be for the micros to open their own "Beer Stores". This would only make sense in larger urban centres. The cost of infrastructure (building, staff, trucks etc.) would make it necessary to invite larger brewers, like Brick, to the table for monetary reasons. Because of their volume and resources, they would ending up running the show perhaps to the detriment of the little guys ( I'm only 5 foot 7).
These little gripes are being viewed through a very narrow perspective I know. In the end the consumer should be the deciding factor, but it is also important to keep the little guys ( less than 2000hl per year) in mind. They make up the bulk of the micro population in Ontario.
Having said that, let the chips fall where they may.

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Manul
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Post by Manul »

I keep on saying we're going to end up having more diversity and also pay through the nose for it. But that's just me.

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