Sidebar 2: Would end to LCBO monopoly help?

Tuesday, March 3, 2009

The LCBO has a near monopoly on the sale of liquor and wine in the province of Ontario. Grape grower and wine maker Steve Kocsis argues that monopoly should be taken away. "There are huge issues of unfairness in the marketplace and that goes right down to the viability of the grape growing industry," he says.

Kocsis suggests that retail wine licenses be issued on the basis of land holdings; one retail store license for every 20, 30 or even 40 acres of orchard. Growers who don't want to make wine could grant their licenses to someone who buys their grapes.

This would be part and parcel of privatizing the LCBO and no political party "of any stripe" has an incentive to change the LCBO monopoly system, Kocsis says.
The union representing LCBO employees is formidable and the monopoly itself gives the province $1.5 billion in revenue annually.

Paul Speck, a co-owner of Henry of Pelham Winery in St. Catharines, which makes and sells VQA wines exclusively, doesn't think the LCBO deserves blame for all of the wine industry's distribution problems. Many wineries want their product in the stores. "There's only so much (the LCBO) can do," he says. He would like to see the 400 or so Andres and Vincor stores, which currently sell their products exclusively, "look like the beer store" with products "from all different companies…I'd be there in a heart beat," he says.

Speck thinks cellared in makers should be able to bottle as much imported wines as they want, but admits growers generally dismiss his suggestion to ditch the 30 per cent requirement. "Growers think if there's no Wine Content Act their grapes won't get sold.

If we don't do something we will make the big wineries uncompetitive. Ask General Motors how that went."
Has Speck taken this idea to the Wine Council-Grape Growers talks?

"We aren't supposed to be talking about that right now," Speck says. "A whole bunch of ideas have been put out there. They are in the process of sorting out what might be acceptable." BF