END THE LCBO

Most arguments justifying the LCBO and the Beer Store have easy rebuttals.

Point: Government institutions like the LCBO and the Beer Store are the only ways to retail alcohol. We’ve always done it that way and there are no other options.

Counterpoint: Actually, citizens of Ontario are forced to deal with one of the strictest systems in the world in order to buy and sell alcohol. In neighboring Quebec, citizens can buy beer and wine in grocery stores and convenience stores till 11 at night, 7 days a week. In Alberta, entrepreneurs are free to open stores to sell liquor, beer and wine upon qualifying for a permit. These can stay open from 10 in the morning till 2 at night. Neither Quebecers nor Albertans are dying in the streets as a result of these differences.

Most states in the US allow private businesses to sell alcohol, while keeping for themselves the power to regulate aspects of the market like opening and closing hours. Anyone who has visited Europe knows that alcohol is far more available than it is in Ontario, yet the Europeans are doing fine.

Point: Government run stores like the Beer Store and LCBO are the only way to keep minors from buying alcohol. Private businesses are driven by profits and will sell to anyone.

Counterpoint: Convenience stores are already given the responsibilities of keeping those under 18 from buying cigarettes. They could easily assume the same responsibility for alcohol. The system already allows bars and restaurants to sell alcohol on the condition that they don’t sell to minors. If private businesses likes bars and restaurants are granted the privilege of selling alcohol, then so should others like grocery stores, convenience stores, and private liquor stores. To deny them that right is playing favorites.

The LCBO likes to maintain that convenience stores in particular would do a bad job asking for IDs. But the LCBO already operates some 200 agency stores across Ontario, the first opening in 1962. Agency stores are private convenience stores in remote locations that also sell alcohol products on behalf of the LCBO. Why does the LCBO blast convenience stores when it already sells through convenience stores?

Point: The Beer Store and LCBO provide employment and decent salaries for its employees, including underprivileged cashiers and shelve stockers.

Counterpoint: Taxpayers must pay for these above-market salaries. Even if some of the taxes support the small guy behind the till, much of it goes to wealthy and well-connected bureaucrats in upper management. In 1996, 9 LCBO employees made more than $100,000 a year. This number has swelled to 156 employees in 2007. The CEO now makes $365,000, more than tripling from $104,000 in 1996.

People complain that removing the LCBO and Beer Store monopolies will result in the loss of jobs. Compensating for this loss, convenience stores all over the province will benefit from a new stream of income with the end of the LCBO and Beer Store. Many of these are owned by recently arrived immigrants who could use the assistance.

Point: The Beer Store and LCBO promote Ontario alcohol products, thereby helping local industry.

Counterpoint: The government monopolies and Ontario’s wine laws actually hurt many local wineries. Laws prevent any winery that opened after 1987 from setting up a retail store anywhere else but on their own vineyard. Since most vineyards are in Niagara, customers have to drive down to the region in order to buy wine. If laws weren’t so strict wineries could set up stores in Toronto, Ottawa, and other urban areas in order to properly connect with their clientele, benefiting the industry instead of disabling it.

As for the Beer Store, while regulated by the government, it is actually 48% owned by Molson Coors, 48% by Belgium-based InBev, and 2% by Japan-based Sapporo. Putting private companies in charge of Ontario’s beer monopoly is just asking for trouble, as the incentive for them is to favor their product. Many Ontario brewers have complained.

Point: Without the LCBO small wineries would never make it in a competitive system.

Counterpoint: Actually, most of the LCBO shelf space allocated to Canadian wineries is taken up by the two largest producers; VinCor, owned by US giant Constellation Brands, and publicly traded Andrew Peller (Formerly Andres Wines). The latter had revenues of $240 million last year.

As already stated, laws prevent wineries that opened after 1987 from setting up their own retail stores. Prior to 1987, VinCor and Andrew Peller had set up their own retail branches The Wine Rack and Vineyard Estates/Wine Country. They were allowed to keep these chains after the 1987 legal changes. There are around 290 of these private stores in the province. This system is blatantly unfair to the small wineries, most of them founded after 1987, because they are prevented from having their own chain of outlets to compete with VinCor and Andrew Peller’s chains.

Point: The Ontario government will lose a source of revenue if the LCBO is ended.

Counterpoint: While it is true that the LCBO pays a large yearly dividend to the Ontario government, it pays no taxes. Ending the LCBO will simply mean that this dividend revenue will be replaced by revenue generated by taxing the income of private sellers. Because privately owned stores have incentives to lower costs in a competitive system whereas government monopolies face no such pressures, it is likely that a private system will be far more efficient than the current system. This would translate into higher profits for the system than the current monopoly-based system, meaning stronger tax revenues for the government and fair compensation for the lost dividend income.

Even if the government does lose some revenues, this website is not devoted to protecting the interests of rich government bureaucrats. It is the individual consumers, vendors, and producers of Ontario who deserve choice.

Point: Government control of alcohol will reduce alcohol consumption and therefore alcohol related problems.

Counterpoint: It is not the task of government to regulate the consumption habits of individuals. Responsibility for personal consumption habits, whether they be excessive, moderate, or strictly controlled, lies purely with the individual.