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A Canadian flag flies near an under construction LCBO store in Bowmanville, Ontario on Saturday July 20, 2013. Ontario's liquor board has sweetened an already sweet deal for the federal government and foreign diplomats as it chops the prices they pay for beer, wine and booze almost in half.Doug Ives/The Canadian Press

Ontario's restaurant owners want the province's liquor agency to give them the same deep discounts it gives to diplomats.

Last month, the Liquor Control Board of Ontario started giving foreign embassies and consulates a 49 per cent discount on beer, wine and liquor prices.

A so-called "embassy" discount — which also applies to federal government purchases — was already in place, but the agency made its products even cheaper for this group starting June 23.

On Tuesday, a group representing Ontario's restaurants said the new discounts are unfair when they have to pay full retail prices for alcohol.

In an open letter to the liquor board, Joyce Reynolds of the Canadian Restaurant and Foodservices Association calls the agency's pricing scheme an "insult" to hard-working business owners.

She says the industry employs 425,000 Ontarians and contributes $25-billion a year to the provincial economy, but diplomats offer no economic benefits to the province.

"Yet again, the LCBO has demonstrated that it is out of touch with current business challenges, and the financial burden of an overly complicated liquor control system," Reynolds said.

"We hope you will consider introducing a little more fairness into the beverage alcohol system for hard working Ontario business owners."

The LCBO says it must offer discounts for foreign embassies because of a federal law, the Foreign Missions and International Organizations Act.

An agency spokesperson says the uniform 49 per cent discount replaces a hodge-podge of previous discounts that were incompatible with a new computerized sales system.

Under the new discounts, a case of imported wine that costs ordinary consumers $203.18 is priced at $104.80 for this group, including HST and bottle deposit.

That's $26.47 cheaper than it was before the new system kicked in June 23.