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UPDATE: Please revisit the issue of retail alcohol sales: An open letter to Ontario’s Minister of Finance

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I originally published this letter to The Honourable Charles Sousa, Ontario’s Minister of Finance, on July 23, 2013. A few days ago, I received the Minister of Finance’s response and have amended the post to include the minister’s letter (and my brief analysis). 

July 17, 2013

The Honourable Charles Sousa
Minister of Finance
c/o Advisory Services and Program Policy Branch
33 King Street West
3rd Floor
Oshawa, Ontario
L1H 8H5

Dear Minister Sousa:

My name is Ben Johnson and in what little spare time I still have, I write about beer, alcohol, and food for a handful of Toronto-based websites. As you might imagine, during my frequent research and discussions dealing with the subject of alcohol consumption in Ontario, the topic of the LCBO and the prospect of privatization—or any other notable change to our retail alcohol system—arises with some frequency.

I write today because I know that you recently indicated that you wouldn’t rule out the idea of selling the LCBO. Specifically, according to a June 26, 2013 Canadian Press article, you commented:

It’s prudent for us to always view opportunities should they be of net benefit to the province [. . .]. We’ll look at what’s going to be in the best interests to the people of Ontario and to the province.

And while I can appreciate that this comment essentially just means you’re keeping your options open, I’m wondering if there are any actual future plans to “view opportunities.”

In light of the report commissioned by the Ontario Convenience Stores Association, the public comments made by opposition party leadership about selling the LCBO, and increased public pleas for some change to the province’s current system, are there actually any concrete plans to revisit the idea of privatized sale of alcohol in Ontario—in any form?

I’m aware that one of your predecessors, Greg Sorbara, commissioned a study in 2005 and that the resulting report, “Strategy for Transforming Ontario’s Beverage Alcohol System” noted, among other things, that

it is not necessary for government to own and operate retail and wholesale [alcohol] facilities itself. In the 21 st century, government can protect the public interest just as well, if not better, through modern regulatory tools such as pricing policies and active enforcement.

Furthermore, one of the main predicted outcomes of enacting the panel’s recommendations to sell the LCBO was that “the consumer would get greater convenience and choice and would benefit from a competitive retail environment.”

While I can appreciate that circumstances may have changed such that a report from 2005 might not so easily apply directly to circumstances as they exist in 2013, it would seem to me that enacting some or all of the recommendations made in that report would be in keeping with your recent comments, specifically that the financial outcomes for the province and increased competition for the public would be “in the best interests to the people of Ontario and to the province.”

Personally, I’m not of the opinion that the LCBO should be sold—I love the LCBO—and I can appreciate the hesitancy to give up what surely amounts to an excellent source of revenue for the province; but I felt compelled to write you to ask if you might be willing to commit to any potential changes to the current system— whether it be licensing private retail stores, allowing the sale of alcohol in convenience stores, or even just letting craft brewers have a privately-owned beer store that might compete with the other privately-owned Beer Store.

I speak regularly with the province’s craft brewing and craft distilling community and most if not all experience negative effects on their ability to do business in this province as a result of the current system. At the same time, in spite of the difficulties they face, both communities are experiencing rapid growth in this province—the number of craft breweries rises virtually every week and so too is Ontario’s small batch distilling industry starting to come into its own.

Accordingly, I feel strongly that not only should the government act to support this growing segment of Ontario business owners, but I feel the government should respond to myriad evidence—some commissioned by the province itself and being met with a decade of inaction—and increased public demand for change to our beverage alcohol retail system.

Can you please let me know if you are willing to officially revisit this issue and, if not, what steps I might be able to take in order to advance the issue for consideration?

Thanks very much for your time.

Sincerely,

Ben T. Johnson

PS – I imagine I’ll eventually post this letter publicly somewhere as an “open letter”—most likely on my own blog—so I thought it only fair to let you know, and that I may also publicly post any response this letter receives. Fear not though, I only average a couple hundred visits to my website per day so an avalanche of public support in response seems highly unlikely.

Response: 

SEP 03 2013

Mr. Ben T. Johnson 

Dear Mr. Johnson:

Thank you for your letter regarding the privatization of the LCBO and potential changes to the retail alcohol system.

This government believes that Ontarians are well served by the current retail system for beverage alcohol. Ontarians can purchase alcohol in over 1,700 retail outlets, including the LCBO, The Beer Store, agency stores, Ontario winery-owned retail stores, and from wineries and breweries directly. The current system offers a wide range of products at competitive prices, promotes Ontario wines, beers and spirits and encourages responsible reuse and recycling.

The Government recently announced the introduction of two new ways to buy alcohol over the next 12 to 18 months:

  • LCBO Express stores in large grocery stores will carry a range of products, including Ontario wine, spirits and beer. These smaller format stores will enable the LCBO to meet consumer demand for convenience.
  •  LCBO Destination Boutiques inside selected full-size LCBO stores will offer customers an expanded selection of Ontario’s VQA wines, as well as hard-to-find wines from smaller producers, craft beer and a few special or unique non-VQA products.

The current system balances access for both customers and suppliers with social responsibility. Expert bodies, including the World Health Organi zation and the Canad ian Centre on Substance Abuse, are strong supporters of the public control of alcohol retailing as an effective social responsibility measure.

In 2012-13, the LCBO challenged almost 7.8 million people for reasons of age, intoxication, or suspicion of purchasing on behalf of a minor. Service was refused to 322,000 people with

84 per cent for reasons of age.

By selling beverage  alcohol in a socially  responsible manner, the LCBO generated approximately $1.7 billion in revenue in 2012-13.  These funds support key government priorities including health care, education and skills training, and infrastructure investments that benefit all Ontarians.

Thank you again for writing.

Sincerely,

Charles Sousa

Minister

(If for some reason you’re interested, you can view a PDF version of the Minister’s response here).

Clearly there’s nothing too surprising here and, if you’ve ever dealt with government correspondence at any level before you’ll immediately recognize that this letter consists entirely of pre-approved messaging. It is telling, however, (and a little sad) that the government’s current messaging doesn’t seem to include any glimmer of hope for expanded alcohol sales–privatized or otherwise–aside from the LCBO Express and LCBO Boutique; which I think even the dumbest of people would probably realize aren’t exactly alternatives to the LCBO. This is a little surprising given that Sousa previously said he wouldn’t rule out allowing alcohol sales in convenience stores, but perhaps less surprising given that the Premier said she’s not considering it.

Anyway, I didn’t imagine my letter would have ground-breaking consequences and it clearly didn’t, but the timing of the response’s arrival–just before the announcement by Mac’s Convenience Inc. that they’d promised to create new jobs if they’re permitted alcohol sales–clearly doesn’t bode well for that company’s bid to sell booze. It would seem we’ll have to keep heading to the LCBO and our local brewers for the time being.


And now a brief rant regarding Mac’s Convenience:

I recognize that your “announcement” yesterday is getting a lot of press because it has buzz words like “job creation” and “beer” (and because it’s fun to say Couche-Tard) and the announcement comes well-timed at a point when a lot of Ontarians are looking for a change to our retail alcohol system, but the entirety of your announcement is essentially “Give us alcohol sales and we’ll create jobs.” It’s a nice sentiment, and makes for a headline-grabber on a slow-news Tuesday, but under any sort of real scrutiny, the only realistic response to your proclamation is “Well, no shit.”

If one of the largest alcohol monopolies in the world suddenly opened up competition to just one other retailer–any fucking retailer–there would obviously be jobs created. If you let the green grocer down the street from me sell booze tomorrow and he was the only competition for the LCBO in Ontario, you can bet he’d have to hire some more people to deal with his new business (frankly, he’d probably hire more than just 170 people, too).

We get it. You really want to be able sell booze in Ontario (who wouldn’t?), but the argument that you’d invest in new stores and create jobs isn’t going to win anyone over and doesn’t separate you from the pack of others who would also like the opportunity (like perhaps all the province’s craft beer brewers and micro-distillers?).

You’re just coming off as desperate.

End of rant. Thank you.

Author: Ben

http://www.bensbeerblog.com

2 thoughts on “UPDATE: Please revisit the issue of retail alcohol sales: An open letter to Ontario’s Minister of Finance

  1. Well said, Ben. Keep us posted on your progress. Will you be at the Forest City beer fest in London next weekend?

  2. Pingback: How much beer will $2.4 million buy? Some reflections on the Ontario Microbrewery Strategy | porter's house beer co.

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