Christine Sismondo has a PhD in history and is the author of America Walks Into a Bar: A Spirited History of Taverns and Saloons, Speakeasies and Grog Shops.
In a strange year of unlikely partnerships, the Liquor Control Board of Ontario and the private consortium that operates The Beer Store announced last week that they would work with SkipTheDishes, a delivery app, to offer on-demand alcohol.
Days later – amid outrage and despair from Ontario’s restaurant and bar owners, who felt this constituted a death blow as they clung for dear life in a grim pandemic that has forced frequent on-the-fly reinventions – that partnership was over.
Still, the anger will remain, and justifiably so. The Crown corporation’s efforts to sell booze directly to Ontarians, in a time when restrictions on its licensees have meant that their only revenue source has come from the trickle of money through take-out food and bottle shops, were an insult. That’s especially true, given this fact of life for Ontario restaurants and bars that might surprise their patrons: Licensees actually pay slightly more for their alcohol inventory than consumers do when they stock their home bar. Without so much as a break on liquor prices, restaurants have to charge more than the monopolies to make any money at all – and now, they risked being circumvented at the source.
This used to be the case in British Columbia, too. But, this summer, the provincial government rolled out wholesale alcohol pricing for licensees, which translates into a roughly 20-per-cent discount, in the hopes that this lifeline could save some of their businesses from the sad fate that’s befallen as many as 150 Toronto establishments thus far. B.C.’s easement is only temporary, but stakeholders tell me they expect it will become permanent. If it does, B.C. would join Alberta and Prince Edward Island to become the third province to support the bar and restaurant industry with a discount on its most important commodity.
Ontario’s current system isn’t set up to easily switch to wholesale pricing, which is why some in the industry have been lobbying for a licensee discount instead. Ideally, that would apply across the board to local craft producers, who currently have a hard time getting into bars, since they have to pay a substantial mark-up to the province just to be sold in LCBO stores and licensed establishments, even when their products are sold directly by licensees and the LCBO never handles it. The exact model may need fine-tuning, but the point is simple – if we think restaurants and bars add to our society and culture, they should be supported by paying less on alcohol than you or me.
Restaurants and bars aren’t even really competing with the monopolies: Sales of alcohol inside bars or restaurants and consumed on the premises in most markets represent a fraction of retail, often about 10 per cent. In fact, licensees should be treated like partners; after all, Big Liquor spends a disproportionate amount of money marketing directly to bars, on the theory that the excitement generated in these public spaces boosts the entire industry. In other words, bars are a valuable front man for the retail market – including the LCBO.
But that’s just sales. When we talk about costs, the case for an industry discount becomes even more clear-cut: Shuttered businesses will hurt the economy in myriad ways that we haven’t even begun to calculate yet, from unemployment claims to slumping sales for suppliers and the hidden cost of empty storefronts.
Bar owners pay for the privilege of policing their taprooms and cocktail lounges to make sure that people don’t drink and drive, get too intoxicated or drink illegal bootlegged alcohol, which is the main reason licensing was introduced in Ontario in 1934. This has allowed the province to sell more alcohol while simultaneously keeping a firmer grasp on the market, all while outsourcing the cost of policing. And it worked: Beer sales doubled in Ontario after the first four months of licensed drinking spaces in that year. The flip side of that bargain is that bar owners are supposed to be given a decent chance to make a living. Ontario’s government is failing to uphold their end of the bargain, and we will all be worse off as a result.
As a historian and journalist, I’ve long argued that bars and restaurants – particularly the small, independent, neighbourhood ones – are valuable social spaces. Giving a licensee discount to provincial governments’ contracted partners in alcohol vending – especially now, during a painful pandemic – is the very least they can do in return for bars and restaurants’ contributions.
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