Here is a look into the issues facing the alcohol distribution for Ontario

1. ALCOHOL DISTRIBUTION
MODEL- ONTARIO
BY: PAUL YOUNG, CPA, CGA
MAY 2019

2. PAUL YOUNG - BIO
• CPA, CGA
• Financial Solutions
• SME – Risk Management
• SME – Emerging Technology
• SME – Business Process Change
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. OVERVIEW
• This presentation discusses LCBO and its contribution to finances of
Ontario

4. AGENDA
• 2016-2017 - Annual Report / LCBO
• Labor Contract / Smokey Thomas
• NDP / Horwath

5. NDP / LCBO MODEL
Source - http://torontosun.com/news/provincial/nothing-wrong-with-the-
An NDP government would not
commit to adding wine, beer or
alcoholic cider sales to even one
more grocery store in the
province, but wouldn’t take that
right away from those retailers
that already sell it.
“Decisions on whether or not to
expand the program to other
grocery stores will be made
based on evidence of the
program’s success, so far,” the
NDP said in a statement.
• The goal of government is to maximized
return on assets
• Horwath will support OPSEU as she relies on
union votes
• The franchise option is less costly as the
government would benefit additional
revenue from both franchise revenue as well
as sales of alcohol
• Many small locations already offer outlets as
those locations are two small to offer a
store.
• NDP is never about a business model that
makes sense unless union jobs are included
in the model

6. 2016-2017 ANNUAL REPORT / LCBO
Source - http://www.lcbo.com/content/lcbo/en/corporate-
pages/about/annual-report.html

7. SMOKEY THOMAS / OPSEU
Source - https://opseu.org/news/thomas-lcbo-stop-dragging-things-out-pad-your-profits or
https://files.ontario.ca/en_publicaccounts_annualreport_cfs_2017-9.pdf
Warren (Smokey) Thomas,
President of the Ontario Public
Service Employees Union
(OPSEU), says the employer’s
actions are putting profit before
people and threatening the
safety of workers and the
public, “all in the name of
making a couple extra bucks.”
“There’s no need to drag this
out just to pad the LCBO’s
profits,” said Thomas. “With
the bargaining dates we’ve
added this week, and the five
days we have scheduled next
week, there’s just no need to
go down to the wire if this
employer wants to get a deal.

8. BREWERS
RETAIL F/S
Source -
https://www.thebeerstore.ca/
wp-
content/uploads/2019/04/Op
sReport2017-Final-
secured.pdf
• Headcount is about 7,400.
• Brewers Retail distributes
beer to restaurants, bars,
retail locations, etc.
• There is no evidence by
expanding beer options will
close beer stores down

9. BREWERS RETAIL
• Brewers Retail already charges all locations with fees as part of distribution of alcohol -
https://o.canada.com/business/how-much-price-gouging-at-the-beer-store-costs-bars-and-restaurants
• Brewers Retail F/S - http://www.thebeerstore.ca/about-us/operational-report
• Craft Breweries https://globalnews.ca/news/4381583/cost-produce-craft-beer/ -
• Govt has been looking distribution and retailing of beer for a while - https://www.ontario.ca/page/modernizing-
beer-retailing-and-distribution
• Brewer Retail own a monopoly which means they will fight to give it up - https://torontolife.com/city/toronto-
politics/hard-ontario-start-allowing-beer-sales-convenience-stores/
• ”Howard continues laying out the Beer Store’s case: “The fact that beer prices will be higher.” People pay for
convenience when they shop at any location that is why stores are called Convenient Stores
https://torontosun.com/opinion/columnists/agar-beer-stores-facts-dont-stand-up
• Brewers Retail has done little to stock microbrews, why? https://www.canadianmanufacturing.com/sales-and-
marketing/beer-canada-releases-2018-industry-trends-update-232581/
•
• Source - https://www.slideshare.net/paulyoungcga/ontario-lcbo-and-brewers-retail-issues-facing-alcohol-
distribution

10. LIBERALS / BREWERS RETAIL
• Secret deal -
https://www.thestar.com/news/queenspark/2014/12/09/the_beer_stores_secret_swee
theart_deal_with_lcbo_revealed_cohn.html
• Brewers’ Retail donated to political parties -
https://www.theglobeandmail.com/news/politics/beer-stores-11-million-in-
donations-to-ontario-politicians-under-scrutiny/article22777433/
• Brewers Retail is not supporting craft beer access -
https://bensbeerblog.com/2018/04/15/revisiting-ontarios-master-framework-
agreement-with-the-beer-store/
• Brewers Retail and lobbying - https://www.thespec.com/news-story/5233479-how-
the-beer-store-lobby-wins-friends-and-influences-politicians-cohn/

11. WHAT’S NEXT
• The new PC govt will need to re-look at the contract with
Brewers Retail as part of expanding alcohol sales. FYI –
Contracts are not always set in stone as such there are options
to revisit how beer can be distributed.
• PQ has been offering beer at many locations for years
• Microbreweries are struggling with get their product to
customers - https://www.mnp.ca/en/posts/the-3-beer-
distribution-channels-for-your-micro-brewery