Booze makers say Ontario unfairly gouging them, and consumers

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It’s a fight between the LCBO and some of the biggest distillers in Canada and around the world.

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Bottom line though, is no matter who wins this fight, consumers are going to pay more and may get less at Ontario’s liquor store.

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Sure, the LCBO says it is looking after their customers and trying to ensure the lowest prices, but don’t believe them. The provincial liquor monopoly doesn’t believe in delivering you the lowest price. In fact, they just hiked prices by about 5% across the board.

The current fight has been brewing, or perhaps distilling, in the background for months. It blew open on Friday when Spirits Canada, the lobby group for the distilling industry, accused the LCBO of imposing millions in retroactive taxes.

It’s not that the LCBO denies taking more than $100 million from these distillers, they dispute how it is characterized.

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“As Ontarians gear up to celebrate the May long weekend, consumers of beverage alcohol in the province may soon also have to gear up for higher prices and a dwindling selection of well-known vodkas, whiskies, rums, gins and tequilas at the LCBO,” the group said in a news release.

“Sellers of beverage alcohol in Ontario have been blindsided by a staggering multi-million-dollar retroactive tax bill from the LCBO, and the consequences for consumers and the province are stark.”

Spirits Canada said the LCBO is now withholding payments to distillers to recoup money paid to them in 2023. The reason for the claw back, Quebec’s government liquor store, the SAQ, was able to negotiate lower prices.

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Not fair says the LCBO, which is now using its monopoly power over the sale of whisky, rum and vodka to extract what it feels it is rightly owed. The distillers have no other options if they want to sell in Ontario, other than fighting back in public.

For its part, the LCBO says the claims by Spirits Canada are “inaccurate and highly misleading” while claiming they are just looking out for you.

“As the largest purchaser of beverage alcohol in Canada, and one of the largest in the world, we take measures to ensure that we provide the most competitive price possible for our customers,” the LCBO said in a statement.

If there was a law against misinformation, that statement would be outlawed because it simply isn’t true. The LCBO is the largest booze purchaser in the world, but they don’t pass on any savings they get to consumers, they pocket it.

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The cheapest price for a bottle of standard vodka, imported or domestic, at the LCBO is $31.15. It’s the same for rye or rum if purchased at the LCBO. But these same products are offered to consumers at a much cheaper price in Quebec.

Vodka starts at just $19.90 for a 750ml bottle of Quebec made vodka at the SAQ, while Poland’s Luksusowa vodka will cost you $26.10 at the SAQ, its regular price at the LCBO is $32.95.

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So, which government liqour store is looking out for the consumer?

The LCBO isn’t looking after the customers who walk into their stores, they are looking after its only real customer, the provincial government. According to the Ford government’s latest budget, the LCBO put about $2.5 billion into provincial coffers last year, the biggest amount of any provincial agency.

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If the LCBO were pushing for lower prices and these claw backs from the distillers to give customers a break, they might have a point. Instead, they are squeezing the distillers, their suppliers, while also boosting prices for consumers.

Either way, you lose.

Not only are you paying unnecessarily higher prices, but there is also the possibility of companies taking products you like off the shelf if the LCBO keeps up this anti-competitive behaviour.

It’s shocking that the Ford government, which ultimately controls the LCBO, is allowing these price hikes on consumers and this price squeeze on companies to go ahead while they talk about dealing with affordability.

This is a real mess that is only going to get messier if the government doesn’t step in because the LCBO leadership has shown themselves incapable of dealing with this issue.

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