LCBO-Beer Store deal looks unfair and will 'absolutely' be changed: Wynne

The relationship between the foreign-owned Beer Store consortium and the Liquor Control Board of Ontario looks unfair and will "absolutely" be changed, promises Premier Kathleen Wynne.

Critics allege agreement stifles competition

Restaurant groups have called for a probe into the 'sweetheart' deal between the LCBO and Beer Store. (Fred Prouser/Reuters)

The relationship between the foreign-owned Beer Store consortium and the Liquor Control Board of Ontario looks unfair and will "absolutely" be changed, promises Premier Kathleen Wynne.

"What concerns me is that I think there is the appearance, and there may be the reality of unfairness, and a departure from what was intended in the first place in terms of when the Brewers Retail was set up," Wynne said in a year-end interview with The Canadian Press.

An advisory panel chaired by former TD Bank CEO Ed Clark already recommended the province charge the Beer Store for its virtual monopoly on beer sales, saying there was a clear value that could be auctioned off if the brewers won't pay up.

"The relationship between the provincial government and the Beer Store should be revised to ensure that Ontario taxpayers receive their fair share of the profits from the Beer Store," said Clark.

The panel also said LCBO stores should be allowed to sell more than just six packs of beer, a limitation that was well known to consumers, but the details of which were only recently revealed when a Toronto newspaper published an agreement signed in 2000 with the Beer Store.

"I want us to take some steps to make it clear that this is something that needs to change," Wynne said of the so-called secret agreement.

'Ridiculously' higher prices

Restaurants Canada, an industry association representing 30,000 restaurants, bars caterers and their suppliers, said the deal between the LCBO and the Beer Store means its members often pay "ridiculously" higher prices than consumers.

"For some brands the price is 30 to 50 per cent higher than what consumers pay," said Restaurants Canada spokesman James Rilett. "It's time for Premier Wynne to can this deal and bring competition, fair pricing and choice to the table."

Tackling Ontario's complicated and at times antiquated beverage alcohol system was something Wynne campaigned on when she ran for the Liberal leadership in 2012 to replace Dalton McGuinty, so the advisory panel she appointed will help set the course for change, she said.

"Rather than have a separate track where we're going to deal with the Beer Store and that arrangement and the LCBO separately, it has now been rolled into the work that Ed Clark is doing," said Wynne. "So people can expect to see changes, absolutely."

Online sales encouraged

Clark's panel already rejected the idea of privatizing the LCBO, but said the government-owned agency needs to act more like a private retailer and should expand to online sales of alcohol from around the world.

Canada's National Brewers, which represents Labatt, Molson and Sleeman, has warned recommended changes to the system would add about $5 to the price of a case of 24 beers.

"We appreciate Premier Wynne's interest in the Beer Store and are prepared to engage with the premier's advisory council on government assets in fact-based discussions about the future of the industry," said spokesman Jeff Newton.

"We believe (this) is essential if the advisory council process is to deliver overall improvements for Ontario brewers and consumers without generating unnecessary price hikes for beer drinkers."

The Beer Store, the commercial name for Brewers Retail, was owned by a consortium of Ontario-based brewers when it was set up in 1927, but is now owned by Molson-Coors of the United States, AB InBev of Belgium and Sapporo of Japan. It operates 448 retail stores across Ontario.