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The LCBO at the Manulife Centre in Toronto. (Charla Jones for The Globe and Mail)
The LCBO at the Manulife Centre in Toronto. (Charla Jones for The Globe and Mail)

Wine producers lobby for private stores in Ontario Add to ...

They are legal in British Columbia, Alberta, Saskatchewan, Manitoba and Nova Scotia. They are legal in most jurisdictions around the world where beverage alcohol is commonly consumed. But private, independent wine stores remain an elusive dream in Ontario, the country’s most populous province, where the licence-place motto might as well read: “Run by the LCBO.”

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Now that dream is finally getting a boost from a well-organized lobby. Ontario’s wine producers, frustrated with limited shelf space in government-run liquor stores, say it’s time for change. They are calling on consumers to beat the drum for new private stores, which they say should be allowed to compete with existing Liquor Control Board of Ontario outlets, providing greater access to quality Ontario products.

Boldly taking its message directly to consumers through social media, the Wine Council of Ontario, which represents 80 of the province’s 124 commercially active producers, has launched an innovative website called MyWineShop.ca. Featuring an interactive map, it enables would-be entrepreneurs to “build” their own fantasy stores, listing the location and product mix.

Rolled out late last month, the map has already sprouted more than 350 cute little storefront icons from Sault Ste. Marie to Kingston. More important, most of the new wine-shop dreamers had clicked on the handy “Take Action” button to send e-mails to local MPPs.

Amanda Kinnaird of Hamilton is one of those dreamers. “I believe the proposed wine shops will raise the profile and, more importantly, improve access to some tremendous local product,” she told me via e-mail. “Additional access to Ontario wines is good for business and good for the regional economy.”

Though spawned by Ontario wineries, the campaign has an open-door policy toward imported products. It was either that or run afoul of Canada’s trade obligations, which prohibit discrimination against foreign products. But, as in other jurisdictions, the product mix for private stores would rest with individual shopkeepers, ranging from, say, all-Ontario to all-Burgundy or a mix of imported and domestic brands.

The hope is that an open, competitive market would spawn specialty retailers keen on sourcing small-lot products not currently found at LCBO stores.

Don’t hold your breath, though. The government seems to think the LCBO is doing a swell job and has directed the giant to roll out 70 more stores over the next few years. “Establishing new private wine retail stores for the sale of Ontario and import wines could divert sales away from LCBO to private operators, decreasing government revenues,” says Scott Blodgett, a spokesman for Ontario’s Ministry of Finance, which oversees the LCBO.

Ah, the money-drain refrain. Peddled to great effect by LCBO bureaucrats, it is – and has always been – a smoke-and-mirrors fallacy. Ontario would retain full control over markups under the MyWineShop model, as Alberta does under its fully private liquor retail system. In fact, there’s no reason private wine stores couldn’t collect just as much, if not more, revenue per bottle for hospitals and highways than unionized LCBO stores.

According to Statistics Canada, Alberta’s liquor authority took in $683.5-million from alcohol-beverage sales and other related revenues, such as liquor licences and permits, in 2011. That works out to $188 for every man, woman and child (not that children are, or should be, drinking). Meanwhile, Ontario collected $2.145-billion. But with a population 3.5 times that of Alberta’s, the per-capita figure is just $167.

Yes, Alberta consumes slightly more alcohol, including wine, per person. But that’s what happens when you have an abundance of private stores. “Ontario under-consumes wine,” says Hillary Dawson, the Wine Council of Ontario president. “Usually, that’s linked to point of access.”

With 1,313 liquor stores and a population of roughly 3.8 million, Alberta’s retail coverage makes Ontario’s seem paltry. As of May, 2012, there were just 623 LCBO stores and 214 “agency” stores (general merchandise retailers licensed to sell alcohol in communities that can’t support the overhead of an LCBO store) serving almost 13 million people. Even factoring in the 470 Ontario-winery boutiques, including off-site chains, such as Wine Rack and Vineyard Estates, which are owned by industry giants Constellation and Peller and which enjoy protected status thanks to a grandfathering clause under our free-trade deals, the total number of wine retailers sits at just 1,307.

In other provinces with extensive private systems living in tandem with government stores, per capita wine consumption is higher than Ontario’s, too. British Columbia, with 1,140 stores, including 670 private liquor retailers, puts back 19.7 litres of wine per capita, versus 13.7 for Ontario, Dawson says. The corresponding figure in Quebec, where corner grocery stores are licensed to sell wine and beer, is 22.6 litres.

“It’s not the fault of the LCBO,” Dawson says. “They do a fantastic job of selling our wine, but it’s not an infinite opportunity.”

Follow on Twitter: @Beppi_Crosariol

 

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