Looking for the original Bar Towel blog? You can find it at www.thebartowel.com.

We have a trivia question in order to register to prevent bots. If you have any issues with answering, contact us at cass@bartowel.com for help.

Introducing Light Mode! If you would like a Bar Towel social experience that isn't the traditional blue, you can now select Light Mode. Go to the User Control Panel and then Board Preferences, and select "Day Drinking" (Light Mode) from the My Board Style drop-down menu. You can always switch back to "Night Drinking" (Dark Mode). Enjoy!

AG Report on pricing at LCBO

This forum is for discussing everything beer retail: LCBO, Beer Store, Grocery Stores and Indie Stores.

Moderators: Craig, Cass

User avatar
lister
Beer Superstar
Posts: 2071
Joined: Wed Feb 16, 2005 2:33 pm
Location: Toronto

AG Report on pricing at LCBO

Post by lister »

lister

User avatar
JerCraigs
Beer Superstar
Posts: 3053
Joined: Sun May 25, 2003 8:00 pm
Location: Toronto

Post by JerCraigs »

lister wrote:From the DUH! department...
Not sure that's as obvous a "D'uh!" as you might think.


But the auditor general countered that, by modernizing its pricing structure, the LCBO could actually generate more money for the public coffers.
“It might be able to increase its overall profit margins while still meeting its retail pricing objectives,” McCarter told reporters.
One way to read that as implying that they should get stuff from suppliers dirt cheap, and mark it up even more to maintain the retail price.

User avatar
cmadd
Posts: 251
Joined: Wed Jun 29, 2011 9:00 pm
Location: Toronto, ON

Post by cmadd »

One way to read that as implying that they should get stuff from suppliers dirt cheap, and mark it up even more to maintain the retail price.
I think that's the only way to read that...

User avatar
The_Jester
Bar Fly
Posts: 561
Joined: Thu Dec 06, 2007 1:01 pm
Location: Peterborough

Post by The_Jester »

The "profit margins" comments scares me. It's my guess that there's a narrower profit margin on some of the premium beers and special promotion beers, due to higher costs and lower volume. I hope I'm wrong.
"The time for delay is over, we need to address the threat of climate change activism immediately if we hope to protect the future prosperity of our children’s employers." Scott Vrooman

User avatar
JerCraigs
Beer Superstar
Posts: 3053
Joined: Sun May 25, 2003 8:00 pm
Location: Toronto

Post by JerCraigs »

cmadd wrote:
One way to read that as implying that they should get stuff from suppliers dirt cheap, and mark it up even more to maintain the retail price.
I think that's the only way to read that...
Yes, but as a taxpayer, we should want them to do that. We wouldn't pay anymore but they province gets more money.

As a customer, it would be nice if they would reduce the prices for us.

As craft beer supporters, its to the breweries benefits to get paid more.

User avatar
cannondale
Bar Fly
Posts: 745
Joined: Tue Sep 12, 2006 1:58 pm
Location: Barrie, Ontario, Canada

Post by cannondale »

JerCraigs wrote:
cmadd wrote:
One way to read that as implying that they should get stuff from suppliers dirt cheap, and mark it up even more to maintain the retail price.
I think that's the only way to read that...
Yes, but as a taxpayer, we should want them to do that. We wouldn't pay anymore but they province gets more money.

As a customer, it would be nice if they would reduce the prices for us.

As craft beer supporters, its to the breweries benefits to get paid more.
Therein lies the rub.

As Ontarians, we should demand fiscal responsibility of the LCBO. Increasing margins would provide additional cash for social programs. And in particular, as beer connoisseurs 'suffering' with the provincial liquor monopoly in the name of social responsibility and provision of funding to the provincial coffers, we should be 'outraged'.

Having said that, if the LCBO begins negotiating for better pricing from brewers, brewers may be even less inclined to do business with them. It has been reported many times here that several brewers are reluctant or refuse to jump through the LCBO's hurdles as it is. This could impact the variety of beer that is brought into the system.

Quite the dilemma.
Never attribute to malice that which is adequately explained by stupidity.

Kel Varnsen
Bar Fly
Posts: 641
Joined: Mon May 25, 2009 9:25 am
Location: Ottawa

Post by Kel Varnsen »

JerCraigs wrote:
But the auditor general countered that, by modernizing its pricing structure, the LCBO could actually generate more money for the public coffers.
“It might be able to increase its overall profit margins while still meeting its retail pricing objectives,” McCarter told reporters.
One way to read that as implying that they should get stuff from suppliers dirt cheap, and mark it up even more to maintain the retail price.
Could that also not mean that the LCBO could lower their retail prices in order to sell more alcohol which would increase its overall margins. Especially if increasing the sales volumes allows them to get even bigger discounts from suppliers.

JeffPorter
Beer Superstar
Posts: 2552
Joined: Tue Jul 26, 2011 9:39 am
Location: Brampton, ON

Post by JeffPorter »

I dunno. This isn't necessarily a "craft" issue to me. I see this more as - "If you're buying tens of thousands of bottles of bacardi, perhaps you can see if you can get a deal from the company"

Although the implications for "craft" products are interesting and, like cannondale said, is the rub...

But it seems to be geared more towards brewers, distillers, wineries etc, that have a large capacity and can sell in bulk.

If, say, Flying Monkey's had the capacity to flood every store in the province with Supercollider, would it be worth their while to sell for less in order to move more products? I dunno.

Also, it strikes me as weird that many breweries ask the LC to buy more units and they don't, even though those beers are big sellers. I'm thinking of St. Ambroise Pumpkin Ale which was gone in a few weeks, even though the brewery wanted to sell more.
"What can you say about Pabst Blue Ribbon that Dennis Hopper hasn’t screamed in the middle of an ether binge?" - Jordan St. John

User avatar
JerCraigs
Beer Superstar
Posts: 3053
Joined: Sun May 25, 2003 8:00 pm
Location: Toronto

Post by JerCraigs »

Kel Varnsen wrote: Could that also not mean that the LCBO could lower their retail prices in order to sell more alcohol which would increase its overall margins. Especially if increasing the sales volumes allows them to get even bigger discounts from suppliers.
In theory, but that's where you run into the "social responsibility" arguments.

User avatar
Ale's What Cures Ya
Seasoned Drinker
Posts: 1198
Joined: Tue Apr 18, 2006 12:56 pm
Location: The Thirsty Dog

Post by Ale's What Cures Ya »

We pay too much for alcohol, too much for car insurance, too much for hydro and can't get a doctor.

There's nothing quite like big government and overspending on bloated social programs if you want to hamper the lives of citizens.

User avatar
JesseM
Seasoned Drinker
Posts: 1307
Joined: Thu Dec 13, 2007 10:46 am

Post by JesseM »

But....but......but paying too much for booze is the socially responsible thing to do :o ......

User avatar
saints_gambit
Bar Fly
Posts: 652
Joined: Mon May 31, 2010 2:38 pm
Location: Toronto, Ontario
Contact:

Post by saints_gambit »

interestingly, the only people who are likely to suffer from this are those who can afford to sell high volume at a lower rate.

Sort of a craft beer miracle christmas in Ontario.
saintjohnswort.ca

User avatar
JerCraigs
Beer Superstar
Posts: 3053
Joined: Sun May 25, 2003 8:00 pm
Location: Toronto

Post by JerCraigs »

JesseM wrote:But....but......but paying too much for booze is the socially responsible thing to do :o ......
Its probably sacrilege to point this out here, but there is obviously a socially optimal price for alcohol from a societal perspective, particularly in a place like Ontario where health care costs are paid by the public. There is a point at which increasing the cost of alcohol (especially through taxes) is balanced by the social costs of drunkenness, health issues etc. In most cases this is unlikely to affect the craft beer market however, since few of their products are selling at the bottom end of the price range. If anything having the gut rot be more expensive makes the good stuff seem like a better deal.

Of course the flip side to this argument is the study in Eastern Europe of smoking which found that smoking is a massive economic benefit. High taxes and revenue combined with the fact that smokers die younger avoiding the high cost health care years that come later in life. This equation of course places no economic value on human life or quality of life though...

User avatar
shintriad
Bar Fly
Posts: 646
Joined: Thu Jul 15, 2004 9:19 pm
Location: Toronto

Post by shintriad »

The Canadian Restaurant and Foodservices Association (CFRA) has chimed in: http://www.theglobeandmail.com/news/nat ... le2267453/

The comments in the Globe, as usual, are almost uniformly supportive of overhauling Ontario's liquor laws. Those comments supporting the status quo are being suitably downvoted into oblivion. Nice to see, in any case.

User avatar
Ale's What Cures Ya
Seasoned Drinker
Posts: 1198
Joined: Tue Apr 18, 2006 12:56 pm
Location: The Thirsty Dog

Post by Ale's What Cures Ya »

I don't buy the argument that the government's coffers would suffer from opening up the market and abolishing the LCBO's retail arm.

The reduction of LCBO expenses would be massive by divesting themselves of all retail locations. No more upkeep to pay on those locations equals savings. The LCBO also wouldn't be on the hook for the absurdly inflated wages paid to LCBO staff. Those two things alone would be massive savings for the government.

The LCBO currently operates 618 stores. I'm not sure how many convenience and grocery stores there are in Ontario, but I'm willing to bet it's far more than 618. Maintaining the taxation level (or even raising it slightly) on alcohol sales while allowing many, many more places to sell alcohol will maintain the amount of money being put back into the government's pocket, while also allowing people to open small niche stores that cater to the particular tastes of people like the members of this forum.

Allowing private retail stores is win-win, and it's refreshing to see that a light is starting to go off in a lot of people's heads. We're probably still at least a decade from a fair, honest and real retail model in Ontario, but there seems to be a lot to be hopeful for.

Post Reply