LCBO & the Trade Wars

[Cass]

It's wild that when I was importing (and I still think it's the case today), according to the LCBO there are only two types of beer when it comes to price classification: Ontario or import. So OOP beers are considered exactly the same as a beer from Belgium or the U.S. or anywhere else.

Having the excise tax on OOP beer go away would be big for brewers that want to sell in Ontario. But there's also the issue of freight and shipping - the LCBO would need to loosen its iron grip as that is a huge expense.

It's kind of too bad that the taproom era is fading as it would be cool to have Quebec beers (for example) on tap at beer bars. I guess we still could see it.

[anthony9]

https://www.cbc.ca/news/politics/ottawa ... -1.7476087

Selected excerpts:

Ottawa has reached a deal with the majority of provinces to allow Canadian booze to flow more freely across the country just as U.S. liquor is pulled from their store shelves.

All provinces, except P.E.I. and Newfoundland and Labrador, have agreed to remove the obstacles preventing their alcohol from being sold in other jurisdictions.

[Tapsucker]

I'm a bit confused about the various issues here. If I recall, the few out of province brewers that engaged to sell in Ontario largely gave up due to byzantine LCBO regulations, not so much shipping or tariff costs.

So let's deconstruct:
Tariffs should go away if we have a Canada wide trade agreement. Right?
Shipping, well not much we should expect here.
LCBO. Will we still have to source through LCBO and expect the vendor to deal with the rules? Will I just be able to order direct from a brewer's website? I mean, due to shipping, it might not make that much sense for me, but I could see some beer bars pulling in some kegs to keep things interesting (for the record, I would patronize these).

I could actually see a lot of small brewers shrugging off the potential out of province competition to be able to expand their own sales to more markets, but not likely at the expense of conforming with local byzantine regulations. I mean, beer and wine labels are pretty much useless anyway (another topic of discussion), so I don't think it would matter much to me if my favourite Quebec beers were only labelled in French or Alberta beers in MAGA.

[Craig]

Indeed, the LCBO will still have to list out of province beers. But if I can order LTM to my door now, I'll be happy.

[El Pinguino]

I would imagine breweries willing to ship direct to home, no LCBO involvement, would be fine? But we shall see how it works.

One thing people don't seem to realize, is a lot of breweries in other provinces don't ship anywhere, or only within their own city.

We are kind of spoiled that so many breweries in Ontario ship anywhere in the province, you don't really get that so much in BC, AB. (Pretty sure no Quebec breweries are allowed to delivery to homes? I doubt this recent update would change that?)

[Craig]

I wonder if the SAQ or even a good Dep could start shipping out of province?

[anthony9]

I wonder if the SAQ or even a good Dep could start shipping out of province?

I hope so, but I think Quebec is most likely to maintain the current system.

I believe they only started home delivery from bottle shops fairly recently. I think a lot of breweries only allow pickup.

[Craig]

Does the SAQ not ship?

[anthony9]

Does the SAQ not ship?

It does both to store and home.

I guess what I mean is I am not overly hopeful SAQs and others will be like ordering from Ontario with a larger delivery fee.

[Cass]

I'm a bit confused about the various issues here. If I recall, the few out of province brewers that engaged to sell in Ontario largely gave up due to byzantine LCBO regulations, not so much shipping or tariff costs.

From my days importing (which I did for Garrison & A La Fut), the shipping is significant. The LCBO determines the freight cost, and you have no other option but to use them, so it's take-it-or-leave it. That cost is fully absorbed by the brewery and is baked into the end retail price, as is the excise tax which applies to anything outside of Ontario.

Now the LCBO is still the biggest retailer and that's not going to change, so breweries will still have to go through their selection process to get on the LCBO shelves. But what I'm curious about is could an OOP brewer list for grocery or TBS sales, for example, without the interprovincial red tape.

Or, could Dan's Bossanova beer shop simply call up LTM (for example), have them ship three cases directly and put the bottles on the shelf. I know that market is small, but would be nice if those regulations were eased so speciality shops could actually stock specialty products from around the country.

[S. St. Jeb]

Not LCBO, but here is something Moosehead is doing

Canadian brewery selling pack of 1,461 beers to cope with Trump's presidency

[Gleemer Imports]

I wonder if the SAQ or even a good Dep could start shipping out of province?

Quebec would not want this.
Our imported beers are about 25% cheaper than the same beers at the SAQ

[Gleemer Imports]

I'm a bit confused about the various issues here. If I recall, the few out of province brewers that engaged to sell in Ontario largely gave up due to byzantine LCBO regulations, not so much shipping or tariff costs.

From my days importing (which I did for Garrison & A La Fut), the shipping is significant. The LCBO determines the freight cost, and you have no other option but to use them, so it's take-it-or-leave it. That cost is fully absorbed by the brewery and is baked into the end retail price, as is the excise tax which applies to anything outside of Ontario.

Now the LCBO is still the biggest retailer and that's not going to change, so breweries will still have to go through their selection process to get on the LCBO shelves. But what I'm curious about is could an OOP brewer list for grocery or TBS sales, for example, without the interprovincial red tape.

Or, could Dan's Bossanova beer shop simply call up LTM (for example), have them ship three cases directly and put the bottles on the shelf. I know that market is small, but would be nice if those regulations were eased so speciality shops could actually stock specialty products from around the country.

DOubtful this happens.
My hot take: the LCBO is indeed restrictful regarding shipping. but they negotiate a pretty great freight rate (at least for international items). if you can get your beer/wine to the port, that $ amount per case is peanuts. $16 per case for the LCBO to pick it up from my Belgian breweries is a per-bottle laughable amount.

I'll assume that OOP vendors will still need Ontario agents. Not sure if they'll remove the legalities involved in self-transporting alcohol across provincial lines, which is still illegal

[Cass]

My hot take: the LCBO is indeed restrictful regarding shipping. but they negotiate a pretty great freight rate (at least for international items). if you can get your beer/wine to the port, that $ amount per case is peanuts. $16 per case for the LCBO to pick it up from my Belgian breweries is a per-bottle laughable amount.

Yeah, I guess you're right about the international freight due to consolidation. But the final straw for me was when I tried to help Indie Alehouse do a Buffalo beer night with some of the breweries there. The LCBO quoted me something like $2,000 to ship a few cases, plus duties/taxes/exchange on top of that. The LCBO is set up well for large volume stuff, but some of the little things they can't or won't service effectively. It's that kind of thing, albeit pretty small potatoes, would be nice if barriers were removed on - even if it's still just within Canada.

[Tapsucker]

Let's imagine this for a moment. Remember Canada Post? Forever looking for ways to stay relevant? How about this.

I, Ontario consumer, order a case of wine from BC. Said case is consigned to Canada Post (bonded?) without BC excise taxes, as it is not being delivered in BC. Canada Post adds their fees and Ontario excise taxes (keeping our mandarins happy) but no fees for LCBO, since they are not doing anything in this case. I get my wine delivered with the 'exceptional Canada Post service we are used to', and pay the S&H and the local taxes everybody is worked up over. Canada Post remits the taxes to the province, much the same way as duties are processed.

Just spitballin' here...

It would probably help if wine producers in particular increased their adoption of tetra packs or even cans.