LCBO backs away from Beer Store brawl

The dispute was over a letter the provincially owned liquor board sent earlier this month to all of its small-town alcohol retailers, or agency stores. Signed by Gar Sherwood, a LCBO senior vice-president, it warned agents who sign a similar distribution agreement with The Beer Store would "risk the termination of their current agency store authorization.

The Toronto Star
January 25, 2002

LCBO backs away from Beer Store brawl
Minister signals disapproval over turf dispute
Katherine Harding

LCBO%20logo%20F.jpg

A brawl that broke out between Ontario's booze monopolies — The Beer Store and the Liquor Control Board of Ontario — is due to "a misunderstanding," says the provincial government.

The dispute was over a letter the provincially owned liquor board sent earlier this month to all of its small-town alcohol retailers, or agency stores.

Signed by Gar Sherwood, a LCBO senior vice-president, it warned agents who sign a similar distribution agreement with The Beer Store would "risk the termination of their current agency store authorization."

The Beer Store, which has 433 retail stores, bitterly complained that the LCBO was blocking its entry into rural Ontario. Last fall, Consumer Minister Norm Sterling announced an expansion of its LCBO "agency store" program, which has existed since 1962, and an end to the liquor board's dominance over them.

There are already 108 of these stores operating within established businesses in communities that don't have full-service outlets. By 2003, 150 more will open around the province, allowing shoppers to pick up a bottle of Merlot while they're at the local store getting milk or fish bait.

Sterling's press secretary, Mike Hickinbotham, said the LCBO's letter isn't "consistent with the minister's position" on the issue.

"He wants an open relationship between the two (The Beer Store and the LCBO)," he said. "The minister is on the side of the agent and consumers. Hopefully this will be just a one- to two-day problem."

LCBO spokesperson Bill Kennedy said the board has always wanted to work with The Beer Store on the new arrangement and only sent the letter to remind existing agents that their contract is binding until the new rules come into effect later this year.

"We were faced with a situation where a number of our agents were seeking clarification about what was happening," Kennedy said. "I think (The Beer Store) misunderstood the intent of the letter and the motivation for sending it."

The extra sales from the new agency stores will only add to the LCBO's massive profits. Last year, its annual report showed that the crown corporation poured $1.1 billion into provincial coffers for 2000-01.

But Jeff Newton, executive director of the Brewers of Ontario, said that the LCBO is "back-tracking" from statements in the letter since it was publicized by the media.

Brewers of Ontario is a private company that owns The Beer Store.

"The line that talks about termination is pretty aggressive language," he said.

"(The letter) left the impression with agents that we were doing something that was potentially illegal. And these are people that we are going to ultimately be business partners with."

Newton praised the government for intervening.

"They are trying to sort things out with the LCBO."


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