Competition watchdog backs recommended reforms to Ontario liquor rules

Published August 19, 2019

In an open letter to Ontario Minister of Finance Rod Phillips, Canada’s competition commissioner, Matthew Boswell, has called on the province to introduce a wholesale liquor pricing system for bars and restaurants.

Time for a better deal for foodservice and hospitality businesses

“Under the current pricing scheme for licensees, bars and restaurants do not benefit from proper wholesale pricing and must purchase from the Liquor Control Board of Ontario (LCBO) and the Beer Store at consumer-level retail prices,” the commissioner stated in the letter. “This drives up prices for consumers, as establishments must add a mark-up on the retail prices to generate a profit.”

He went on to say that: “Ontario’s bars and restaurants are limited to the selection available through the LCBO and the Beer Store. Distribution and warehouse capacity constraints limit the range of products available. This can restrict new and innovative producers’ ability to market their products and limit consumers’ choice.”

The commissioner concluded that “expanding the selection of products available to bars and restaurants through private ordering and consignment programs – which permit producers to sell products not available at LCBO locations and Beer Stores – can allow budding craft breweries and wineries to better market and scale-up their businesses. This can make a wider variety of products available to the hospitality sector and improve the dining experience for both Ontario residents and tourists.”

The letter commended the province for recently undertaking a review of its liquor policies and expressed support for the recommendations laid out in the report produced by Ken Hughes, Ontario Special Advisor for the Beverage Alcohol Review.

Restaurants Canada applauds this message from the Competition Bureau, as well as the willingness to change the status quo that Ontario’s Progressive Conservative government has already demonstrated in the area of liquor policy.

Signs of progress

Since launching its review to modernize Ontario liquor legislation, the province has already moved forward with a number of reforms.

While changes so far have mostly impacted how retail consumers purchase liquor products, the following measures have directly benefited the province’s bars and restaurants:

  • The term “happy hour” can now be used in marketing and signage; and
  • Alcoholic beverages can now be served as early as 9:00 a.m. at all licensed establishments, in line with the new retail service hours for liquor and cannabis.

These red tape reductions have been welcomed as a sign of more good news to come for the foodservice and hospitality community.

If you have any questions or would like more information, you can get in touch with James Rilett, Restaurants Canada Vice President, Central Canada, at jrilett@restaurantscanada.org or 1-800-387-5649 ext. 4241.

 

Marlee Wasser

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