Is it time for the Crown corporation to give up its monopoly?
Debate surrounding the mere existence of the Liquor Control Board of Ontario (LCBO) is longstanding—and heated. The Crown corporation has been around since the late 1920s, monopolizing where and how Ontarians get their drink on (and how much they pay for their hangovers).
More recently, the opposition has been more vocal about ending the LCBO’s monopoly. And those detractors have seen results: In December 2015, the Ontario government rolled out the sale of beer at 58 grocery stores across the province. And in February, the Province announced that wine will be sold in up to 300 Ontario supermarkets.
In our latest instalment of Torontoist vs. Torontoist, we debate:
Should the LCBO continue to have a monopoly on alcohol sales?
The LCBO is widely despised. The prices are too high, some say. The hours suck! My not-so-popular take: the LCBO is actually good.
Just as there are flaws in all human creations, there are flaws in the LCBO. But from the perspectives of both workers’ rights and public revenue, a publicly owned and operated system is far superior to private enterprise.
Because LCBO employees are unionized, we know wages start out at $15 [PDF] for casual retail employees and that senior retail clerks can earn up to $35 per hour. In an expensive city with high and growing numbers of people forced into insecure jobs, we need to protect the jobs that actually offer a living wage ($18.52 in Toronto).
Rank and File reported in 2013 that there are dramatic gender inequities in both the LCBO workforce and in which LCBO employees have access to health benefits (a function of how many hours need to be worked in order to qualify). Those divides are serious, and must be addressed. The reason we know about them, though, and the reason workers are able to fight to address them with public support rather than in the shadows, is that their employer is accountable to the public and the government.
None of the issues people often take with the LCBO are intrinsic to its nature, despite the fact that they’re often framed as public sector “inefficiencies.” With enough public outcry, issues like store hours and prices could feasibly be changed, and there’s no way to know that a private market would necessarily be better in these (or any other) regards.
Glassdoor.ca, which tracks wages and salaries, lists an average sales associate wage of $11 per hour, or $11.26 for “wine merchants,” at the Wine Rack, the province’s privatized wine and cooler sales operation. Wine Rack employees are unionized but compensated at levels far below those of their public employee counterparts.
Monopolies are something of a dirty word these days, and with good reason. There are few methods of recourse when a monopoly, either public or private, raises prices or cuts services. Of course, with a public monopoly, we can complain to the government, whereas with a private one (like the Wine Rack and Beer Store) we can neither take our business elsewhere nor raise the problem with an outside body.
The Canadian Centre for Policy Alternatives wrote in one report [PDF]: “When ownership of the monopoly belongs to the state, all of the benefits of the monopoly can be directed toward the public good.” That’s what governments do with the profits they make off alcohol sales: they fund essential services, such as education and health care. The LCBO brought $1.6 billion into the public purse in 2012, according to Rank and File. That same CCPA report found that, while publicly retailed alcohol is often derided as being wildly expensive in comparison to private sales, publicly controlled alcohol sales in Saskatchewan and BC tended to be cheaper than private sales in either BC or Alberta.
The much-maligned public sector offers two things we need desperately in the current economic climate: secure jobs and steady revenue. The latter is especially true of public alcohol sales, because our appetite for getting drunk isn’t going anywhere. Rather than lining the pockets of a few behind-the-scenes businesspeople at the expense of the public at large and of employees, the obvious solution is to support the LCBO and to, where necessary, look for changes within it. Lucky for us, we know exactly where to apply pressure for those changes.
I am going to open this by saying I am not opposed to Crown corporations. I grew up in Saskatchewan, and I was fortunate enough to have SGI to insure my car and Sasktel for my cell phone—both were fantastic. These Crown corporations offered a fair product and were working to offer a service to the people at a fair price because they were working for the people.
Sadly, the same can’t be said for what I’ve seen in Ontario, where nothing is more frustrating to me than the LCBO.
It makes me uneasy that the government dictates who has access to the market. If you sell wine, your only option is to sell through the LCBO. The Wine Rack and the Wine Shop, while they sell wine, are privately owned and exist under grandfathered licenses. There are people at the LCBO who make the decision on what gets stocked on the shelves.
If you own a small vineyard in Niagara, it is incredibly difficult to get a product listed by the LCBO. As a winery owner, you are only able to sell your wine out the cellar door, or at a farmers’ market. It doesn’t seem fair to have such a restricted market for what amounts to grape juice produced in our own backyard.
Over the past few years, I have had the opportunity to travel outside of Canada in search of great wine to drink. Outside of Canada, you can get your wine and beer from grocery stores, gas stations, or even take away from restaurants. This isn’t just great because it offers easy access to booze. Rather, as a business owner, if I wanted to carry a bottle of wine from a producer up the road, I could. In this city, I can’t.
Even within the craft beer, wine, and spirits movement, we still cling to Prohibition-era laws that put alcohol on a forbidden pedestal. But the reality is that alcohol is an agricultural product. Quite possibly it’s the only agricultural product that generates tourism interest.
I understand that revenue from the LCBO is important to the province. But as a Crown corporation, it should be operating to benefit the people: taxpayers and consumers. Using Prohibition-era laws, the LCBO is deliberately gouging consumers under the guise of “social responsibility.” According to one story in Toronto Life, the LCBO decides on a price from a supplier and will ask them to raise the price to keep us socially responsible. Am I the only one who still misses buck-a-beer?
It would seem that the LCBO talks out of both sides of its mouth by keeping its prices high while at the same time pouring out slick, glossy catalogues and magazines (Vintages, Food and Drink), and every quarter hour, you can be sure to hear the very well-produced radio jingles. If the LCBO is the only place to purchase booze, why does it need to advertise?
Meanwhile, head south of the border to see how much more booze costs for us Torontonians. A bottle of Toasted Head Chardonnay, for instance, costs $18.95 from the LCBO; the same bottle of wine in Arizona will cost as little as $9.
I will cede that the LCBO is definitely the best booze monopoly in the country. But it’s still a broken system. It’s not time to completely dismantle the LCBO, but we need to give our local producers access to the market. As it stands, that just isn’t happening.