(Sept. 22/14) The Ontario government’s sweetheart deal with The Beer Store is not so sweet for restaurateurs or taxpayers. In a presentation to the Premier’s Advisory Council on Government Assets, Restaurants Canada pointed to this deal as a key reason brewers can gouge the restaurant industry.
About the deal
The government agreement restricts the LCBO from selling beer in 12- and 24-packs. As a result, our members can’t buy 24-packs at the LCBO where they would pay the same list price as the public. Instead, licensees are forced into a system where breweries charge them 30 to 50 per cent more than the public price. This inequity costs the province’s restaurants, bars and pubs more than $75 million annually.
Taxpayers also pay the price, as this one-sided agreement leads to at least $500 million in lost revenue for the LCBO.
In our presentation, we questioned the existence of this non-compete clause, given the harm to our members and the province’s stated desire to maximize return on assets. The panel will report its findings to the government by the end of the year.