Brewers group denies secret deal between LCBO and Beer Store

TORONTO – Canada’s National Brewers, the foreign-owned organization which represents mega-brewers such as Labatt, Molson and Sleeman, is denying a report published in the Toronto Star Tuesday alleging a secret deal exists between the LCBO and the Beer Store.

The newspaper says there is an operating agreement between the two rival alcohol distributors that sharply limits competition.

But the brewers group stated in a media release that the agreement enacted by the Government of Ontario in June 2000 was arranged “to facilitate the orderly modernization of Ontario’s beverage alcohol retail system while maximizing revenue to government.”

The group said the agreement allowed the expansion of new Beer Store locations “to the benefit of Ontario consumers.”

The Star further reported that the LCBO also agreed to limit the sale of beer in packages of no more than six containers.

“The Beer Store does not make any profit. It operates on a break-even basis,” the statement read. “Today’s Toronto Star contains many false and inaccurate claims about the Beer Store.”

READ MORE: Wynne to stick with near-monopoly on booze sales but open to some change

An advisory panel looking into finding ways to squeeze more value out of Crown assets recommended in November sweeping changes to improve sales and profits at the government-owned LCBO, which turns over a dividend of about $1.7 billion a year to the province, on top of taxes.

Ontario’s Minister of Finance, Charles Sousa, told reporters at Queen’s Park Tuesday that he wouldn’t say whether any alleged deal between the LCBO and Beer Store would be changed ahead of next year’s budget or as a result of the panel’s findings.

“They’re under discussions now; it’s going to inform the budget, so I’m not going to preclude that work. Let them determine, let them negotiate, let them assess the degree at which we can provide greater benefit to consumers and to taxpayers of the province,” he said.

It said the LCBO should move to a ‘click and collect’ model to allow customers to buy products online – including items from around the world – and be able to pick those products up at the local liquor store.

READ MORE: Panel wants more tax revenue from Beer Store, more selection at LCBO

It also recommended LCBO stores be allowed to sell 12-packs of beer, not just six-packs, and said the agency should increase its service charge for beer for the first time since 1989, noting beer prices jumped 64 per cent during that time.

The panel said the Liberals should negotiate new deals with the foreign-owned Beer Store, which has 447 retail outlets, and with Winery Retail stores, which are owned by six wineries that sell only their own products at 292 off-site stores and 199 on-site outlets.