Liquor, merchandise mix in lawsuit threat

In a letter sent this week to the LCBO's senior legal counsel, the group's lawyer argues that the mandate of the LCBO, as set out in the Liquor Control Act, is to monitor the sale of booze, not be a taxpayer-funded competitor for entrepreneurs. "I am asking the LCBO one final time to cease the sales of these non-beverage products relating to gift and home accessories," wrote Patrick Murphy, Ms. Murphy's husband, who represents more than a dozen business owners. "If we do not have this matter resolved shortly, I will be taking instruction from my clients to issue a lawsuit on behalf of them to recover the very substantial damages that are and will be incurred by them."

National Post
November 14, 2003

Liquor, merchandise mix in lawsuit threat
Spa Gift Basket purchased with bottle contains green tea, shea butter body lotion and potpourri: Small business v. LCBO
Michael Friscolanti

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A group of small business owners is threatening to sue Ontario's liquor control board if it continues to sell merchandise — from golf balls to body lotions — that has nothing to do with booze.

The coalition has locked horns with the LCBO before, accusing it of abusing its monopoly on alcohol sales to steal customers from private sector gift shops.

Their battle appeared ended last year when the Ontario Crown corporation agreed to stop selling housewares, such as tablecloths and napkins, at its 14 flagship stores. But the fight has rekindled with the approach of the Christmas season because the LCBO is again offering goods that do not come in a bottle — including gift baskets full of knives, tree ornaments and candles.

"This all just smacks of abuse of power," said Brenda Murphy, who owns Cooker's Mercantile in Goderich.

For years, the LCBO has sold items that go hand in hand with liquor, such as corkscrews and bottle openers.

But the corporation has been accused of moving too deep into the province's $2-billion-a-year gift market. During the holiday shopping rush, for example, customers who purchase a bottle can order a Spa Gift Basket, which contains green tea, shea butter body lotion and potpourri. Another basket, aimed at pasta lovers, comes with a variety of oils, Mediterranean herb paste, and olives bathed in Vermouth.

In a letter sent this week to the LCBO's senior legal counsel, the group's lawyer argues that the mandate of the LCBO, as set out in the Liquor Control Act, is to monitor the sale of booze, not be a taxpayer-funded competitor for entrepreneurs.

"I am asking the LCBO one final time to cease the sales of these non-beverage products relating to gift and home accessories," wrote Patrick Murphy, Ms. Murphy's husband, who represents more than a dozen business owners. "If we do not have this matter resolved shortly, I will be taking instruction from my clients to issue a lawsuit on behalf of them to recover the very substantial damages that are and will be incurred by them."

Chris Layton, a spokesman for the LCBO, said the Crown corporation has no interest in competing with the private sector. The gift baskets, he said, are nothing more than unique forms of packaging — a responsibility that is mandated under the Liquor Control Act.

"It is the same thing as if you wanted to buy a bottle of whiskey and you said: 'Put it in a gift box,' " Mr. Layton said. "It is just gift packaging that accommodates the booze."

Mr. Layton also stressed that the holiday gift baskets can only be purchased over the telephone or online, and they must be bought alongside a bottle of alcohol. He also noted that between October, 2001, and October, 2003, the board sold only $77,400 worth of the baskets.

During the same period, it sold $6-billion worth of booze.

In their previous fights with the LCBO, the store owners complained about the sale of stand-alone items such as platters and napkin rings, which were eventually pulled off the shelves.

While in opposition, Ontario's new Liberal government championed the issue. In November, 2001, Toronto-area MPP Mario Sergio told the provincial legislature the LCBO "siphoned" nearly $6-million from small businesses by selling non-alcoholic items.

Mr. Sergio, now parliamentary assistant to the minister in charge of the department, refused to discuss the issue yesterday.

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© Copyright 2003 National Post


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Risks: Anti-small business, Crown corporation, Monopoly or near-monopolies creates sub-optimal capital allocations, Opportunism (self-interest with deceit), Canada, 20031114 Liquor, merchandise

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