Montreal

SAQ sacks two after price-fixing scandal

The president of Quebec's provincial liquor board is apologizing to consumers following attempts to fix the prices of certain European wines. The employees responsible are paying for the mistake with their jobs.

The president of Quebec's provincial liquor board is apologizing to consumers following attempts to fix the prices of certain European wines. The employees responsible are paying for the mistake with their jobs.

Sylvain Toutant ordered an internal investigation last month over allegations that buyers for the provincial liquor monopoly asked distributors to raise the prices of European wine in a bid to to offset the effects of the rising Canadian dollar.

The board could then boost its bottom line and avoid reducing the prices charged in liquor stores.

Toutant says there was no theft or fraud involved and no board employees profited from the deals.

But he says both he and Quebecers have been lied to.

"We ended up in a situation where we had to deny that we had done this. And we did," Toutant said. "Which is unacceptable and I'm extremely sorry for what happened.

Toutant says two of his top employees tried to take advantage of the stronger Canadian dollar by asking European suppliers to raise wholesale prices.

Several distributors declined the offer. But a handful accepted the deal.

"We accepted some price increases from the supplier and accepted volume rebates in exchange," says vice-president Richard Genest.

The SAQ says prices on the shelves should have reflected the rebate, but did not.

Toutant calls it a serious breach of trust. He says he could not continue working with the two vice-presidents responsible.

"One gave me his resignation, the other, who has been with the company for 25 years, decided to retire," Toutant said.

The board has now reduced prices of nearly 30 products by up to eight per cent to reflect the exchange rate.

And the SAQ says it will not get caught in a situation like this again. It says every time currency rates change by more than three per cent, prices in the stores will do the same.

Wine is serious business for the liquor corporation, which posted a profit of $276 million in the first six months of last year.

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