Many Ontarians are celebrating the new rules that allow them to buy alcohol at big box stores like Costco and at their local convenience store, a practice other provinces and other countries have had for many years. This is a victory to be sure for convenience and consumer choice, but it is important not to become complacent and accept that this is the final victory when it comes to the Liquor Control Board of Ontario (LCBO). There is so much more that can be done.
The response from Ontarians has been positive to the new retail rules, and the provincial government should take that as a signal that consumers in this province would be accepting of more changes. For example, why do Ontarians still have to go to the LCBO to buy their vodka, whiskey, and gin? The LCBO remains the exclusive retailer of spirits in the province despite the fact that you can get your 2-4 box of beer from your local Costco. Why can’t you pick up a bottle of gin to make some cocktails for your friends as well? The only real reason seems to be to keep the LCBO feeling special, and to potentially avoid another strike. However, strikes won’t hurt Ontarians as much if they are able to buy their alcohol from places other than the LCBO. This exclusive right to sell spirits doesn’t make much sense, and only serves to inconvenience Ontarians with no real evidence that such exclusivity is necessary. However, the evidence is clear for the positives, allowing for existing private retailers to also carry spirits would generate savings for the province of between $100M – $120M per year.
Another aspect of alcohol retail that Ontarians should continue to push for is changing the model of the LCBO completely. There are two options for this that we can learn about from Alberta and British Columbia. Today, the LCBO boasts 669 retail stores in Ontario and continues to be the wholesale supplier for all private retailers and hospitality venues. The reason is simply no longer clear as to why this is still necessary. Alberta boasts a fully private model which still involves the provincial government: Alberta Gaming, Liquor and Cannabis (AGLC) is the legal importer of liquor in Alberta. Manufacturers and suppliers sell their liquor products to private retailers through the AGLC, and licensed retailers then sell that liquor to consumers. No need for government-run retail stores like the LCBO, and the model works: before privatization, there were a total of 208 Alberta Liquor Control Board stores. Today, there are more than 1,500 private retail liquor stores. Alberta is even the only province in Canada to have standalone Costco liquor stores. Alberta revenue from liquor sales transferred to the provincial government has consistently increased since privatization.
In B.C., there are private liquor stores alongside province-run liquor stores, but they do not allow alcohol sales in convenience and grocery stores, although wine is allowed in grocery stores (understandably, given B.C.’s rich wine scene). Although that’s not the best model in terms of consumer convenience, it still allows for private retailers and does not allow the provincially-run department to select the products to be sold to retailers. If a manufacturer or seller is approved, then they are eligible to be bought by retailers through B.C.’s Liquor Distribution Branch (LDB). In Ontario, it is LCBO bureaucrats who decide what is and is not sold on their shelves, and even encourage the extremely inefficient practice of alcohol distributors lobbying individual LCBO store managers to ask the higher ups in the LCBO to stock their product.
This is all evidence that the Government of Ontario should far from congratulate themselves on a mission accomplished. There is so much more that could be done to make the LCBO less present in the lives of Ontarians, thereby making picking up a case of beer more convenient and consumer-friendly. It was not the government of Ontario that one day woke up and decided this is something they wanted to do, it was the push from consumers, everyday Ontarians, that encouraged them to make these present liberalizations a reality. Since it seems the provincial government is ready and willing to make life easier for adults in Ontario when it comes to purchasing alcohol, now is the time to take the next step and truly become a more modernized Ontario.
To read more about this, take a look at the Consumer Choice Center’s latest report, Modernize Ontario.
