Ready-to-drink beverages accounted for more than $600 million in LCBO revenues in 2023, underscoring the concerns of front-line employees who fear publicly owned retail locations could close if convenience stores are allowed to cut into liquor store revenues.
The Ford government has announced plans to allow convenience stores to sell premixed cocktails, along with beer, wine and cider, in early September as part of the Progressive Conservatives’ plan to widen access to alcohol in the province.
The union has asked the government to either reverse the policy or address the revenue loss while Premier Doug Ford emphatically declared that the “ship has sailed” on the decision, suggesting convenience comes first.
How much do RTDs bring in?
In its 2022-23 report, the LCBO highlighted a growing taste for premixed drinks that came with increased revenues.
“Ready-to-drink (RTD) or spirits-based coolers has been one of the fastest growing and most popular product categories in recent years,” the LCBO said in the 2022-23 annual report.
“Consumer preferences for these beverages have resulted in a shift away from some of the more established alcoholic drink types.”
While Ford stressed that RTD represents 9.1 per cent of overall sales at the LCBO, the Crown agency indicated a sharp rise in sales and revenue.
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In 2023, the LCBO said, RTD sales grew by 6.8 per cent to $673 million and RTD beverages now represent “almost 62 per cent of total Ontario spirits volume” sales in the province.
Union says key questions unanswered
On Wednesday, the Ontario Public Service Employees Union (OPSEU) said it has been trying to extract information from the LCBO and Ontario government on the overall financial impact of premixed drinks being sold at convenience stores.
“The question we have been asking since day one is how will you be making up these revenues?” OPSEU’s Colleen MacLeod said.
The union has also attempted to get clarity, through the bargaining process, about how much money the government projects the Crown agency will lose in direct revenue as a result of alcohol liberalization.
While the province’s finance minister has never made that number public, MacLeod said the LCBO has refused to provide that figure as well.
“That in itself caused us a serious issue because we need to know those numbers,” MacLeod said. “We need to know how much the LCBO is going to lose because that translates into how many jobs are going to be lost.”
MacLeod said that while front-line workers can accept the sale of beer, wine and ciders in corner stores, they are unwilling to give up a product with increased market share.
“They see that as one of the most popular, largest growing markets right now. And they see that that is a step further than any other jurisdiction has done,” MacLeod said.
What will it take to get the union back to the table?
On Thursday, the LCBO issued a statement indicating that while it’s willing to resume bargaining, the negotiating team would not entertain a conversation about the Ford government’s policies.
“We are ready to talk about job security. We are ready to talk about wages. We are ready to talk about benefits,” the LCBO said in a statement, adding that OPSEU’s publicly stated positions require more clarity.
“Two days ago, the president of OPSEU appeared to indicate that ready-to-drink beverages was no longer the union’s top issue, saying instead job security was its chief concern.
“If OPSEU is now prepared to agree that ready-to-drink beverages are a matter of public policy and not something that should be discussed as part of bargaining.”
Global News asked OPSEU what it wants to hear from the government in order to resume bargaining.
“We all need to hear how much money is going to be lost, how many jobs do we expect to lose, where will our job security be in the future, (and) will stores continue to stay open,” MacLeod said.
“We need to know that we will still be here and we’re going to continue to be viable.”
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