'Eventually, many will run out': How an LCBO strike could impact restaurants and bars

A long drawn-out strike by liquor store workers could have a significant impact on Ontario's restaurants, wine importers, bars and consumers. But it could offer a boon to local wineries.

LCBO, union urges consumers to stock up ahead of Monday's strike deadline

The Ontario restaurant and bar industry purchases roughly half a billion dollars of alcohol a year from the LCBO. (David Donnelly/CBC)

A long drawn-out strike by liquor store workers could have a significant impact on Ontario's restaurants, wine importers, bars and consumers — but it may offer a boon to some local wineries.

"Eventually, many [restaurants and bars] will run out, if not all, if it goes into a month, two months," said Tony Elenis, president and CEO of the Ontario Restaurant Hotel and Motel Association. 

The Liquor Control Board of Ontario (LCBO) is one of the world's largest purchasers of beverage alcohol, according to its website. In turn, the province's restaurant and bar industry purchases roughly half a billion dollars of alcohol a year from the LCBO.ca

Bars alone, Elenis estimated, get about 90 per cent of their spirits through the regulatory agency.

A strike deadline has been set for 12:01 a.m. Monday, as the union representing LCBO employees pushes for better hours and job security for its part-time staff. Eighty per cent of the agency's workforce is part-time, it says.

In advance of that deadline, both the LCBO and the union have said consumers, bars and restaurants would be wise to make their purchases this weekend. Ontario's beer stores, however, are still open and not affected by a possible strike.

In the event of a labour disruption, the LCBO has said it is planning to provide "some level of service" across the province.

But the Ontario Public Service Employees Union (OPSEU) has said the LCBO would have trouble stocking any stores it keeps open because unionized workers control the warehouses.

'Stock up'

"What our advice has been: 'Stock up, especially with those brands you know you're going to be selling," Elenis said.

Yet with restaurants forced to offer a large variety of brands to placate a large variety of tastes, he said many likely won't have the storage room to stock up more than one to two weeks' worth of inventory.

The Ontario Restaurant Hotel and Motel Association is advising its members to stock up on alcohol as a possible LCBO strike looms. (J.P. Moczulski/Canadian Press)

And while space is one constraint, many restaurants operate as cash businesses and can only purchase so much stock at a time, said Anindya Sen, an economics professor at the University of Waterloo and director of the school's Master of the Public Service program.

"When consumers and clients come in, you get your income and then you use it to stock up. So I'm not sure many restaurants have significant savings they can necessarily dip into to deal with a strike, especially if a strike persists."

Filippo Cognigni, a sales manager for the Toronto-based Le Caviste wine importers, said the past few days have been very hectic, as restaurants brace for a potential strike.

"A lot of restaurants are in somewhat of a panic mode, ordering twice as much wine as they might be needing for the week or the upcoming weeks."

Le Caviste sells directly to restaurants but must purchase their stock through the LCBO, meaning that if workers go on strike, the company has no access to any product.

'Can make no money'

"It means that we can make no money at all, every day they close," Cognigni said. 

Michael Sangregorio, co-owner of Toronto's Local Kitchen and Wine Bar, said his restaurant receives 100 per cent of its alcohol supply through the LCBO. He said they have purchased a "ton of inventory" and figures they have enough wine stock to operate as usual, if the strike lasts for a few weeks.

But after that, "we're not going to have any product to supply our guests with."

Although his establishment serves food, all the margins are made on alcohol, he said, meaning a drawn-out strike could have a significant impact on his bottom line. 

As well, "not having wine available will discourage people from coming out to eat," Sangregorio said.

"Our food has a direct relationship with the wines that we sell," he said. "All wine bars are predominantly restaurants that have a focus on pairing wine with food."

Featherstone Estate Winery owners Louise Engel and David Johnson are shown at their vineyard in Vineland, Ont. In the event of an LCBO strike, Ontario wineries will remain open for sales. (Sheryl Nadler/Canadian Press)

In the event of a strike, Ontario wineries will remain open for sales and direct shipment to "licensee partners," said Richard Linley, president of the Wine Council of Ontario.

In fact, the action could be an opportunity for consumers to sample local wineries that don't have their products on LCBO shelves, said Chanile Vines, president of the Toronto chapter of the Ontario Wine Society.

"If people are having problems accessing wines from the LCBO, then they might start looking at ordering wines from the wineries or going up to visit," she said. "This could be a great thing to getting people introduced to Ontario wineries."

With files from The Canadian Press

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