News broke last week by Dean Beeby of The Canadian Press that the recent minimum price that beer can be sold in Ontario by the case, up to $25.60 from $24.00, was implemented by the LCBO on the recommendation of the Ministry of Finance. This has sparked some discussion on Bar Towel and quite a few news articles in Toronto.
I’ll let you read the articles about what happened. But there’s a few things troubling about this.
Firstly, the news of the increase wasn’t news at all – at least from the organizations responsible. The LCBO’s spokesperson said that they don’t issue press releases for price increases. This is evident through a search of Canada NewsWire, where they issue releases. But the increase is supposedly part of their “social responsibility” commitment. However, on the LCBO’s What’s New page in their web site’s Social Responsibility section, there’s nothing to be found either. There’s nothing on the Ministry of Finance site or the AGCO’s site as well. The only notice was on the LCBO’s Trade web site, a site meant for industry and not consumers.
It’s unfortunate that it took the investigation of a reporter to get the LCBO to talk about this. If that wasn’t the case they probably wouldn’t have said anything publicly. As the organization that has sole control over alcohol in Ontario this lack of openness is unfortunate.
Secondly, and a big one, is that the price recommendation came from Ontario’s Ministry of Finance. Now it’s very troubling that this wasn’t publicized – it took a request under Ontario’s Freedom of Information act to get this information. But as the reporter of the article pointed out, this raises doubts about the LCBO’s relationship with the government. The LCBO spokesperson says that they make their own pricing decisions. But the Ministry made this recommendation and the LCBO implemented it right away. What could the Ministry ask for next that the LCBO will just put into place? The LCBO, I believe, is supposed to represent the best interests of Ontario consumers. To say that the price increase is for “social responsibility” yet it is rooted in a request from the finance ministry is fishy. The Ministry of Finance’s mandate is to “promote a dynamic, innovative and growing economy and to manage the fiscal, financial and related regulatory affairs of the Province of Ontario”. Therefore this decision is about money, not social responsibility.
Thirdly, and this is where the conspiracy comes in, is the possible involvement of the big brewers in this decision. Discount brands in Ontario have been thriving in recent years – there are frequent “buck a beer” advertising platforms that have been quite successful. Laker, a discount brand in Ontario, even had a web site called abuckabeer.ca – this is now lowestlegalprice.ca. It’s been said that the big brewers have been losing ground and money fighting against discount brands. Having the minimum price raised eliminates a obviously successful marketing tactic but also helps level the playing field between the big brewers’ premium brands and discount brands.
Unfortunately what all this does is continue to highlight is the fact that Ontario doesn’t have an openly competitive market for beer and the force of the government is strongly evident. Remember, the “C” in LCBO is “control”. Don’t forget this – it is a telling reminder of how alcohol is treated in this province.