Beer Store claims LCBO blocking rural outlets

The Beer Store complained yesterday that the province's biggest cash cow, the Liquor Control Board of Ontario, is trying to block its efforts to set up agents in small communities. The private company, which has 433 retail stores, is owned by The Brewers of Ontario.

The Toronto Star
January 24, 2002

Beer Store claims LCBO blocking rural outlets
Brewers want access to existing ‘agency stores’
Katherine Harding

LCBO%20logo%20F.jpg

A booze war is brewing over access to rural Ontario.

The Beer Store complained yesterday that the province's biggest cash cow, the Liquor Control Board of Ontario, is trying to block its efforts to set up agents in small communities. The private company, which has 433 retail stores, is owned by The Brewers of Ontario.

Last September, the provincial government permitted the LCBO, a crown corporation, to franchise "agency stores" in communities of up to 3,000 people that can't support a full-service outlet. While more than 100 already exist in Northern Ontario, the decision allows agents to operate in the southern and eastern parts of the province.

The government has already picked more than 30 communities, including Verona and Fitzroy Harbour, as agent sites. But eventually, 150 could be selected by 2003. The extra sales will only add to the LCBO's enormous profits. Last year, its annual report showed that the chain poured $1.1 billion into provincial coffers for 2000-01.

Earlier this month, The Beer Store set up a retailers program to approach existing and eligible agent communities in order to have a similar agreement as the LCBO. But the LCBO doesn't seem to want to share.

According to officials at The Beer Store, the LCBO has sent letters to agents, threatening to terminate its contract if they sign on to sell for The Beer Store.

"For this crown corporation to intimidate these retailers with punitive termination is outrageous," said Beer Store president Lucio Di Clemente.

Officials from the LCBO couldn't be reached for comment yesterday.

Jeff Newton, The Brewers of Ontario's executive director, doesn't understand why the LCBO won't let them "work side-by-side for an agent."

"We should be able to operate in communities the government has said they want to see liquor service in," he said. "We think it's only fair that we can compete for these agents, too. It's not like we are trying to impinge on their wine and spirits business."

The Beer Store will pay agents a commission on sales. On average, they'll receive $3 per case of beer, Newton said. New agents will also receive $10,000 for startup costs, including the cost of signs. Existing agents will receive $2,500.

Newton said neither the LCBO nor the government has contacted the Beer Store to complain about its plans to establish contracts with provincially approved agents.


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