The LCBO Strike Threat Proves We Need Privately Run Wine Stores
The LCBO's strike threat means big business. But that's not a good thing.
by Erin Henderson
If there was ever a better example of why Ontario needs to open up its liquor retail sales to private entrepreneurship, it happened this week.
For the last few days hype and anxiety had been growing that the LCBO's nearly 7,000 unionized employees would walk off the job.
Not to be toyed with, the union chose the petulant deadline of today – the Friday of the May long weekend – one of the busiest of the year, as the day they'd hit the picket lines.
Not surprisingly, panic ensued, as consumers, sales agents, restauranteurs, and anyone else with an interest in having a readily available booze supply on hand took to the LCBO in droves, filling parking lots, creating traffic jams, and loading up carts with cases upon cases of stock. Recent numbers even suggest Wednesday's sales hit more than $28 million - a 156% increase over last year.
Business Boom Before the Bust
Out of macabre interest, I visited a store near Dupont and Spadina during the noon hour the day before the axe threatened to drop. The roughly 40-spot parking lot was nearly constantly full – as one car pulled out another quickly filled the vacancy. The store's electronic sliding door may as well have been propped open – it barely began to shut before needing to reopen for another stream of shoppers entering and exiting.
Inside was busy – all the cashiers, about six tills, open with line ups three to four people deep – but it wasn't mayhem. Perhaps most surprisingly, the day before a proposed walk-out over job security, part-time staffing levels, and health and safety concerns, workers were smiling, kind, and helpful.
To be fair, more often than not I receive very good service from LCBO staff, who generally go the extra mile retrieving bottles out of the back, taking them to my car – even spending significant amounts of time scouring the system in search of an elusive wine, then offering to order it to that store to save us a trip. And I give them full kudos for a job well done.
I'm also not advocating for a race to the bottom – I believe Ontarions deserve good paying jobs, decent benefits, more holiday time, not less, and if job security exists at all anymore (which a simple glance around any industry would suggest it doesn't), then diligent, hard-working employees should get it.
But what about the other working stiffs who depend on Ontario's liquor board to help them bring home the bacon? The wineries, distillieries, and sales agents from both local and from afar, whose only recourse to sell to Canada's most populous province is to go through the almighty Liquor Control Board of Ontario?
It would seem to us in the face of this most recent strike threat that opening the system to privately owned stores just makes sense.
The Facts and Figures
While we've mentioned this before, the ground swell keeps building – just last week the Economic Club of Canada hosted a luncheon with guest speaker Ian Baillie, Executive Director of BC's Alliance of Beverage Licenses (ABLE). Baillie told the room of roughly 200 guests of BC's experiences since adopting its wildly successful public/private system a decade ago.
"In BC, we have 125 VQA wineries, producing at least 1,000 different types of wine," Baillie informed the crowd. "Of those 1,000 wines, only 260 are currently available in government stores. However, unlike Ontario, those 740 other wines not carried in government stores are available in private stores."
By comparison, Ontario has 135 wineries producing 3,000 wines every year. The LCBO stocks 200. Wineries sell the rest from their cellar doors.
"Unless [consumers] happen to visit each winery, most Ontarions will never know these wines exist," insists Baillie. "The result is diminished choice for consumers but also an unnecessary barrier for many producers."
There's Room – And Need – for All
Both Baillie and Wine Country Ontario admit the LCBO does a great job at handling the massive volume that flows through its doors every year – it's even increased VQA offerings from 37 in 2007 to more than 60 in 2012. But both parties say the LCBO just can't keep up with the increase in demand; the LCBO's massive size requires consistency and large volume to fill its shelf space. Boutique wineries are doomed from the start.
This frustrating reality prompted Wine Country Ontario late last year to launch mywineshop.ca - a fun website which allows people to design their own wine stores and send a letter to their MPP in support of opening up liquor retail sales to the private entrepreneur.
Shortly after, former Ontario Finance Minister Dwight Duncan announced the province will open 10 new LCBO kiosks in grocery stores for consumer convenience. But Baillie says this will do nothing to offer more selection to shoppers.
"Your existing LCBO stores aren't able to stock a broad range of products due to size and volume restrictions. So how will opening 10 smaller stores help to change that?"
And it's not just Ontario wineries feeling the sting of not getting into the provincially-run store. Anecdotally, on many of my wine trips to Europe and the US, winemakers I've met have said they just can't be bothered to go through the expense and hassle of getting listed at the LCBO.
This is where private entrepreneurship could flourish alongside the public system, in a scenario where everyone wins, says Baillie.
"These private stores are more flexible because they operate at a smaller scale than government stores. As a result they can offer new products not previously available. And besides new choice for consumers, they also support producers by creating new opportunities to sell their products.... By letting private stores test new products, government stores can then choose to carry the successful ones with no risk. From a retail perspective, that's a pretty great deal."
If you would like to send a letter to your MPP in support of a private/public liquor stores system, visit mywineshop.ca
*This post was wrriten and published in 2013, and has been edited for clarity.