LCBO strike -- it's not just about the booze
July 11, 2024 8:02 AM   Subscribe

How the Liquor Control Board of Ontario makes money for the government. In an ongoing quest to privatize as much as possible in Canada's most populous province, Premier Doug Ford's plan to allow booze in convenience stores has resulted in a strike for LCBO workers across the province.

It turns out that money from the LCBO funds a lot of Ontario's infrastructure: roads, education, and healthcare. The annual dividend from these sales going to the provincial government--to the tune of $2.54 billion a year--helps fund key services for all Ontarians.

DoFo raised ire for many of us when he released a folksy video over the weekend reminding us where else we could buy booze during the strike. (I mean, I think we'd all like some family doctors and affordable housing over more easily accessed booze, but here we are).
posted by Kitteh (25 comments total) 10 users marked this as a favorite
 
Add me as a Canadian, while no longer a drinker, who didn't know that so much of our booze sales plays a huge role in helping us try to have nice things.
posted by Kitteh at 8:03 AM on July 11 [1 favorite]


It really does feel like Ford's entire plan for Ontario hinges on keeping everyone drunk enough that they don't notice him pillaging beloved public assets and hawking them off to his developer buddies.
posted by mrjohnmuller at 8:04 AM on July 11 [13 favorites]


mrjohnmuller, I agree. I think he thinks if we all get drunk enough, we will ignore how shitty everything has gotten.
posted by Kitteh at 8:08 AM on July 11 [2 favorites]


That CBC article seems pretty confused about the basics of how business works. Taking the numbers given there for the $14 bottle of wine example, we're told that the LCBO makes $5.97 if they sell it in their store versus $4.75 in a grocery store. But then we're told that the LCBO spends 16 cents for every dollar of revenue on labour and admin (plus some amount on freight as well). So if the LCBO is saving a significant part of that 16 cents by not selling the bottle of wine in store, that's up to $2.24 less in spending (plus freight), while they are only taking in $1.22 less. Seems like the LCBO might come out ahead selling in a grocery store (i.e. it costs them more than the 10% margin they give to grocery stores to run their stores). Maybe I'm missing something, but that's what the numbers given in the article suggest.
posted by ssg at 8:18 AM on July 11


Here's a report about the switch from the ALCB to privatised stores that happened in the 90s

(I haven't read it more than required to look up one stat I needed some months ago)
posted by Acari at 8:19 AM on July 11


It all makes sense when you view it not as a government but as a crime syndicate. All functions of it are being tuned to launder money.
posted by Jessica Savitch's Coke Spoon at 8:24 AM on July 11 [2 favorites]


Canadian's unofficial spokesdad, Brittlestar, has a new video about this very issue: https://www.youtube.com/watch?v=EPFPqZrIUFw
posted by wenestvedt at 8:30 AM on July 11 [4 favorites]


I have mixed feelings about State-controlled alcohol distribution. Particularly when the State comes to rely on the proceeds for basic housekeeping type expenditures like roads, schools, and health clinics. Because alcohol profits follow a Pareto rule where 10% of the customers are responsible for 90% of the profits, and those 10% are the ones who need (probably State-supported) assistance in not being chronic drunks. But if the State succeeds at reducing alcoholism, it also succeeds at cutting a funding source for these vital functions. So the State has mixed incentives. It's kind of similar to the State being involved in gambling via lotteries.
posted by Aardvark Cheeselog at 8:31 AM on July 11 [7 favorites]


I used to work for a craft beer importer in Canada. There were a few things that we really focused on and getting a beer listed in the LCBO was huge. So much as so that when we were negotiating with breweries it was a major selling point. As one of the biggest single purchasers of alcohol in the world getting a beer listed guaranteed those were going to be some of your biggest sales.

The PDF's for beer application were by far the most stringent, difficult, and longest to fill out. The application for Alberta took about 4 minutes whereas in Ontario the process took several hours and required very specific information from the brewery.

Between this and his Buck a Beer program, Ford is really making decisions.
posted by Neronomius at 8:49 AM on July 11 [1 favorite]


The incentives are perverse, but I’m not sure what a better option would be for funding public health in rabidly anti-tax states like New Hampshire where other funding sources are legally impossible. Live free and/or die!
posted by mubba at 9:03 AM on July 11


I'm generally against all privatization, but to my mind privatization is when the government assigns an exclusive contract to a private company for services. Like what would happen with privatizing the TTC.

Allowing non-LCBO stores to sell booze doesn't seem like privatization to me, assuming anyone can apply for a sales license. If they say "Only Loblaws," I'm against that. If they say, "Any retailer," I'm not. Of course those retailers would be subject to following the same laws (checking ID, etc).

In my experience, Ontario has some of the most expensive booze in the world (I've lived in seven countries). I once lived on an island in the middle of the Pacific and the same brand gin was cheaper there than it is in Toronto. Crazy.

In addition, the selection in most LCBOs is dreadful.

And why does a bottle of whiskey cost $30 when a bottle of wine is $15 when the cost to the LCBO for the whiskey is only $1.40 more than the wine? This is some bullshit.

And why do bars and restaurants have to pay retail prices for booze, making all our dinner and bar bills even more expensive? It's nonsense.

By far the stupidest story I've heard about the LCBO is that when they sell a restaurant booze, that booze is only licensed for that address. There used to be a restaurant on College that was famous for their wine selection.They decided to move the business a few doors down from their location into a larger spot and the LCBO insisted they had to return all the wine and then repurchase it under the new address and at the current prices. The mind, it boggles.

In short, folks like myself probably would have no problems with the LCBO if it weren't such a ridiculously run organization.

Oh, and Fuck Ford.
posted by dobbs at 10:10 AM on July 11 [4 favorites]


the State has mixed incentives. It's kind of similar to the State being involved in gambling via lotteries

The purpose of a state owned vice industry is not to maximize profit. It is to keep the distribution of that vice out of private hands to minimize public harm. That the income is then used for public projects is a side benefit.

If they are not following that model (ie the Ontario Lottery and Gaming crown corp doing fucking advertising) then they have been co-opted by profiteers who are likely siphoning off and/or laundering cash.

I believe this state owned model should be expanded, not contracted. It should include gambling, alcohol, drugs, firearms, prostitution, residential property rental, groceries, medical care, mining, lumber and fossil fuels.

Everything else is a non essential and/or causes lower levels of harm, and can remain private.
posted by CynicalKnight at 10:12 AM on July 11 [11 favorites]


I'm a wine drinker in Ontario and I have bought wine all across this country and I can only say that with the exception of Quebec, my experience is that the LCBO has a significantly better selection of wines at more or less competitive prices than you can find anywhere else in Canada. Wine for wine, Quebec is slightly more expensive than Ontario. (A $20 bottle in Ontario is typically about $21 or $22 in Quebec.)

The president of the union that represents LCBO workers, JP Hornick, said in a radio interview yesterday that if Ontario's model of a hybrid public-private system is Quebec's then the union would support that. If the model is Alberta's more of less fully privatized system then they wouldn't. My experience of the selection and prices in Alberta the last time I was there was...not good.

Frankly, I like the LCBO. The staff is great. The selection is great. The prices are OK and I'm willing to pay them if they help keep this province from sliding into the corporate meat grinder.
posted by kaymac at 10:19 AM on July 11 [6 favorites]


I see that there is a large number flagged as coming from LCBO revenue that goes to fund Ontario's coffers. I also see ssg's comment that, seemingly, the province would make more from selling it in non-LCBO stores (just based on costs alone; there is also quite a bit to be said for it being sold more places leading to increased sales, which further increases revenue).

With that said and assuming ssg's comment is correct, what is the downside to privatization? I must be missing something where there is some massive upside to the government retaining direct control of sales, because as it stands, I don't see it. It's not like LCBO employees are inherently more likely to stop someone that shouldn't from buying alcohol. My understanding is that in Canada, every person ringing up a sale of alcohol has to have SafeServe certification, so the difference between the [x] store employee and LCBO employee should not be much if anything.

Is it purely the potential loss of jobs? At least around here (rural NW Ontario) there are plenty of retail jobs available for anyone who would be let go by the LCBO.

It is to keep the distribution of that vice out of private hands to minimize public harm.

What is that public harm, though? Alcohol has the same inherent risks whether it's sold at LCBO, Safeway, Great Canadian Superstore, or the Shell station. Is the LCBO employee following people home to surveil their usage or limiting sales to non-intoxicated people based on previous purchases? If not, and assuming what I listed above (i.e. SafeServe etc), then it doesn't follow that limiting sales to LCBO is inherently safer. While I can't vouch for it or whether the authors had a vested interest in the findings, that report linked above about Alberta's privatization of liquor sales did also support this specific conclusion.
posted by tubedogg at 10:23 AM on July 11


I lost my shit when I saw that video. I mean sure you can buy direct from alcohol producers, and you should as they have lots of product not carried by the LCBO (which is a whole other story), but it isn't like Ford has supported any of those small producers during his time in office.
posted by Ashwagandha at 11:24 AM on July 11 [2 favorites]


What is that public harm, though? Alcohol has the same inherent risks whether it's sold at LCBO, Safeway, Great Canadian Superstore, or the Shell station

Availability: If it's where people go to get other things, they are more inclined to buy it. If they have to make a special trip, then less impulse purchasing occurs. Also, a monopoly can impose hours of sale that discourage binge drinking. Private sellers can lobby for later hours and sell booze to already drunk people at 1:00 am.

Familiarity: Like all chains, people know what each store carries and they all look very familiar. Strict hiring/training practices ensure the staff are consistent in customer service, so less fraud will occur.

Security: A government monopoly can ensure age limits are followed and nothing goes out the back door. Private sales can take all sorts of risks to make more money.

Quality: a government monopoly can ensure all of it's products meets certain health and ethics standards. Again, private sales can skirt regulations wherever they think they can get away with it.

I know the libertarian argument about people taking on their own risks with vice products. I just don't care. The harm to humans is too great to leave these markets in the greedy sociopathic hands of private enterprise.
posted by CynicalKnight at 11:45 AM on July 11 [2 favorites]


Here's a report about the switch from the ALCB to privatized stores

It's by the Fraser Institute. Let me guess they're in favour of privatizing.
Yes they are but they really are grasping at some straws here.
From the report;

First, consumers have experienced price increases (on average) for beer, wine, and liquor, but the larger number of liquor store locations under privatization has implied lower transportation and transactions costs for many consumers.
--
I'm paying more for booze but a liquor store is a mile closer to me. Think of the money I'll save on gas.

consumers might have to shop around for their preferred product (particularly for wine products because a given liquor store will only sell a fraction of the large number of wines now stocked in the warehouse.

beer, wine and liquor suppliers are better off as a result of their improved access to
the market in Alberta, but their costs of serving the market have likely increased. Suppliers must now sell their products to individual liquor stores or liquor store chains as opposed to a single buyer, the ALCB.

-
so the suppliers costs have increased but hey they're better off.
-
the wages of non-management liquor store employees are almost one-half of what a full-time union worker at the top of the scale could earn in an ALCB store
--
consumer prices are higher, suppliers costs are higher, there's less choice, workers wages are dreadful.
But in true Fraser Institute style it's a great success.
posted by yyz at 12:02 PM on July 11 [6 favorites]


What is that public harm, though? Alcohol has the same inherent risks whether it's sold at LCBO, Safeway, Great Canadian Superstore, or the Shell station. Is the LCBO employee following people home to surveil their usage or limiting sales to non-intoxicated people based on previous purchases? If not, and assuming what I listed above (i.e. SafeServe etc), then it doesn't follow that limiting sales to LCBO is inherently safer. While I can't vouch for it or whether the authors had a vested interest in the findings, that report linked above about Alberta's privatization of liquor sales did also support this specific conclusion.

Furthermore, kaymac's anecdotes would suggest that LCBO in ontario, at least, the public harm argument isn't a slam dunk. The familiarity, security and quality arguments are very unconvincing. Those arguments are practically articles of faith.
posted by 2N2222 at 12:06 PM on July 11 [1 favorite]


I'm a wine drinker in Ontario and I have bought wine all across this country and I can only say that with the exception of Quebec, my experience is that the LCBO has a significantly better selection of wines at more or less competitive prices than you can find anywhere else in Canada.

I'm not much of a drinker, but I love the LCBO. I can go in and get a much better selection than any grocery store would carry, and there are knowledgeable staff who will help me make a selection.

Maybe it's because I don't tend to drink more popular products - I like dry cider and malty beers - but I don't think I'll ever see the products I'm looking for at anything but the LCBO. (This reminds me: got to go to the All Brands store to look for mead).
posted by jb at 1:10 PM on July 11 [2 favorites]


I hadn't looked at the map he was promoting in that video (I don't know if anyone else has...) So it is basically just groceries stores that sell alcohol. It has some of the larger producers but it is missing lots of smaller ones. Like I need a map telling me where all the groceries store are... Fucking Ford.
posted by Ashwagandha at 1:30 PM on July 11 [1 favorite]


I'm not much of a drinker, but I love the LCBO. I can go in and get a much better selection than any grocery store would carry, and there are knowledgeable staff who will help me make a selection.

I was just visiting Ontario from Alberta last week, and we headed to the local LCBO to stock up before the strike. Incredible wine selection from what I'm used to and a big friendly bearded staffer was happy to point out one of his favorites, which was pretty good!
posted by figurant at 3:40 PM on July 11


that the majority of LCBO contracts are now for part-time jobs (~70% if i recall) is absolutely wild. i'm surprised they didn't strike sooner. DoFo is just such a mendacious, shameful, embarrassment.
posted by LegallyBread at 4:52 PM on July 11


so the difference between the [x] store employee and LCBO employee should not be much if anything.

Much better worker protections at the LCBO than Bob Bodega means the employees can feel more secure not breaking the rules.
posted by Mitheral at 7:40 PM on July 11 [1 favorite]


a few disconnected Ontarian thoughts:

1. I happened to live in alberta briefly right when privatization of the liquor board happened and I am convinced prices went up and selection went down almost immediately. I did not stay so I can't say what the long term trend was. [on the other hand at the time one could buy draft beer from a tap in a jug on a sunday with a credit card, which was daaaaark magic to a 3rd year engineering student]

2. I travel extensively in canada and the US for work (...and I like my tipples) and often find myself missing the selection and service level at LCBO.

3. the argument that LCBO checking ID is no different than a store clerk is simply facile. LCBO stores are better set up in general to prevent theft (and as much as I don't like rentacops it seems to make much more sense to put a rentacop in a dedicated liquor store than to need to add a rent a cop to every grocery and corner store.) and the ID checking culture at LCBO is firm and unbending and everyone knows it. NO WAY that province wide coverage has the same quality if it's not one outfit setting and enforcing those policies.

4. the argument that the govvy should not be using sin taxes to fund public services is all well and good but it's not like the Ford government is doing anything to ensure these funds will be made available elsewhere. At BEST they are digging a hole for a future government to need to scramble to fill. (see also, gas tax furlough, auto license fee cancellations. step right up folks, bread on the right, circuses on the left)

5. frankly the whole scheme should be deeply distrusted and discarded out of hand simply because Ford is doing it. Nobody wins here but his business cronies and maybe some teenagers who will have an easier time getting beer on a weekend. PLUS this is yet another endeavor ford is trying to ram through which was NOT a campaign issue, NOT a common debate issue in the province and for which he therefore has NO MANDATE.

6. Fuck Ford.

7. Seriously, fuck him right in his criminal ear. I have been trying for a month to get an x-ray, I am afraid to get sick because ERs are closing and I can't get a doctor's appointment, doctors and nurses are quitting in droves...but at least I can buy an IPA at the Sobeys.
posted by hearthpig at 5:05 AM on July 12 [4 favorites]


and as much as I don't like rentacops it seems to make much more sense to put a rentacop in a dedicated liquor store than to need to add a rent a cop to every grocery and corner store.

At least around here, again in rural NW Ontario, we already have rentacops in regular stores, while last time I was in LCBO they did not (granted, it was a while ago), so not sure there's actually any difference there.

Availability: If it's where people go to get other things, they are more inclined to buy it. If they have to make a special trip, then less impulse purchasing occurs.

The people who are inclined to overpurchase alcohol don't need an excuse to go to the LCBO right now, so this argument doesn't make a lot of sense. I did bell-ringing at an LCBO one morning a few years back and the people I saw going in before noon were about 10% people shopping for gifts and about 90% the type of people you'd expect to see sitting at a bar, four drinks in, at 10 AM.

Also, a monopoly can impose hours of sale that discourage binge drinking. Private sellers can lobby for later hours and sell booze to already drunk people at 1:00 am.

Days/hours of sales can be and already are restricted for beer sales by the province in non-province-run facilities; it's unclear why this would be any different for any other type of alcohol. Anybody can lobby for expanded hours even if LCBO remained the exclusive distribution point.

Familiarity: Like all chains, people know what each store carries and they all look very familiar.

What does this have to do with anything?

Strict hiring/training practices ensure the staff are consistent in customer service, so less fraud will occur.

This makes the monumental assumptions that a) there is a top-down imperative from the province for any of what you said, b) that it actually happens now, and c) that that imperative wouldn't be present if the province was monitoring private parties.

"Fraud" meaning what specifically? Sales to ineligible persons?

Security: A government monopoly can ensure age limits are followed and nothing goes out the back door. Private sales can take all sorts of risks to make more money.

By that logic, the government should be the seller of literally everything. I know you listed a bunch of other things that either are or should be sold/run by the government in your original post, but you didn't include food/grocery stores, where private sellers can adulterate food, not store cold food properly, etc etc etc, or hardware stores, where private sellers can take myriad shortcuts in making relatively dangerous tools like chainsaws, so on and so forth. A chainsaw is more inherently dangerous than alcohol, but nobody is making the argument that private sellers with government oversight (massively less oversight than is/would be in place for alcohol) can't make and sell them.

Quality: a government monopoly can ensure all of it's products meets certain health and ethics standards. Again, private sales can skirt regulations wherever they think they can get away with it.

Does the government do this now, though? Do they actually test the alcohol at any step in the process? Do they require companies that sell to them to meet certain "ethics standards," whatever that means? (I know the answer to that, and it's no.) You say "private sales can skirt regulations" as if these are like Kleenex in terms of the oversight the government has over their sale, but I don't believe there's any indication that would be the case here.

Also, for the record, most of your arguments are against privatizing entirely with no oversight, whereas what is actually happening is that LCBO will remain the exclusive wholesaler and primary distributor and there is oversight of private sellers through liquor licenses. So e.g. your quality argument goes right out the window (assuming there was some valid basis to it in the first place) because LCBO would still choose what products to purchase as the wholesaler.
posted by tubedogg at 1:34 PM on July 12


« Older Soon it might never be Lupus again.   |   Shelley Duvall, 1949 - 2024 Newer »


You are not currently logged in. Log in or create a new account to post comments.