Why Ontario Premier Doug Ford is at War with the LCBO

The LCBOs that dot Ontario today — generally well-stocked, clean and, some consumers say, overpriced — are the product of a nearly century-old decision that gave the Crown corporation control over the distribution and sale of alcohol in the province.

For years, clear traces of the policies of the moderation era remained throughout the system.

Customers had to apply for a separate liquor license before they could place an order with a vendor, who could refuse any order they thought was too large. Alcohol was not openly displayed. Shops were hidden away from the main streets, and purchases were packaged in discreet paper bags.

Slowly, beginning in the 1950s and ’60s, the LCBO evolved into a more consumer-friendly operation, now offering wine tastings and free samples and publishing a glossy food and drink magazine under the LCBO brand. (However, self-service, where customers can get their favorite alcohol directly from the store, was not fully implemented until the late 1980s.)

Ontario residents could get beer at The Beer Store, owned by the consortium of brewers, and later, in the 1990s, they could get Ontario-produced wine at The Wine Rack, owned by the Ontario Teachers’ Pension Plan.

But overall, the LCBO has a cast-iron monopoly on alcohol sales in Ontario.

While most other provinces, such as Alberta, British Columbia and Prince Edward Island, liberalized alcohol sales and allowed private stores, Ontario largely remained the same.

In 2015, things began to change. The first grocery stores in Ontario were allowed to sell six-packs of beer — a move that was described at the time as the biggest change in alcohol sales since Prohibition.

“It was a small purchase for a politician, but a big step for Ontario beer consumers,” read an article in the Toronto Star about then-Premier Kathleen Wynne’s first-ever purchase of beer in a supermarket.

Today, 450 supermarkets in the province are licensed to sell beer, wine and cider.

So amid the strike, Ontarians aren’t suffering from a completely dry summer. They can still place limited LCBO delivery orders online and buy wine, beer and cider at some stores.

A greater change now awaits us.

Starting this month, supermarkets, convenience stores and wine shops will be allowed to sell wine, beer, cider and ready-made cocktails such as hard seltzers.

OPSEU says ready-to-drink cocktails pose an existential crisis for their business.

“This is our border and we are making history,” said President JP Hornick on the first day of the strike.

“We are here today because of the Ford government’s plan to expand the privatization of alcohol sales… It puts every Ontarian at risk.”

According to OPSEU, the change threatens LCBO’s C$2.5 billion ($1.83 billion; £1.42 billion) net revenue to provincial coffers.

But Mr. Ford argues the plan gives small businesses a chance to enter the market, while still giving the LCBO a significant competitive advantage.

Under the new plan, the LCBO will remain the sole retailer of high-proof spirits such as gin and whisky, as well as the sole wholesaler and primary distributor of alcohol in Ontario.

“Keep in mind that as a wholesaler you make money,” the prime minister said last week.

The proposal also gives Ford a chance to fulfill a promise before the next election, currently scheduled for 2026.

“He campaigned on this,” said Walid Hejazi of the University of Toronto’s Rotman School of Management.

“It’s a winning issue for the Conservatives,” added Mr Hejazi, who noted that he worked as an adviser to the LCBO about 15 years ago.

“The province is proposing a strategy that will lower the price I have to pay and make it easier… who wouldn’t want cheaper alcohol and more convenience?”

Another problem for the LCBO is that the pain of the strike is significantly softened by the limited liberalisation of the liquor sector in the province.

Ontario residents are generally not upset about this. There are hundreds of wineries, grocery stores and beer stores that are still open, where you can buy alcohol.

“What if you go on strike and hardly anyone notices?” read the first line of an editorial in the Globe and Mail.

Public opinion polls appear to reflect this ambivalence, with only 15% of Ontarians saying they were personally affected by the strike.

(A tourism industry group says the strike is affecting the operations of 35% of respondents in the sector, due to limited product availability and slow delivery.)

However, many Ontarians did notice the Conservative prime minister’s interactive map of liquor outlets, which may have irked more voters than the closed stores.

Dr. Adil Shamji, a provincial Liberal politician, said he “regularly” gets calls from constituents asking for help finding doctors, child care or affordable housing.

“Never before, not even after this strike, have people called my office asking if they could help find booze,” he said.

Dr. Shamji said he wants both sides to go back and make a deal, a deal with protection for the LCBO.

Mr Ford says he is prepared to continue negotiating, but will not compromise on canned cocktails.

“If they want to negotiate on (ready-to-drink beverages), the deal is off. I repeat: that ship has sailed,” he said.