Booze Economics 111: restaurateurs don’t have it any easier than the rest of us

Seems no one likes overpaying for booze. Following last week’s auditor general report, which brought the LCBO’s unusual pricing policies to light, the Canadian Restaurant and Foodservices Association has registered its displeasure, too. In an open letter to Ontario finance minister Dwight Duncan, the CFRA is demanding that restaurant and bar owners be allowed to negotiate wholesale prices with the board. At present, restaurateurs only receive an HST credit, but otherwise pay just as much if not more than consumers would for a given bottle. “We urge you to follow the AG’s lead and undertake a comprehensive review of the antiquated and unfair policies of the LCBO monopoly,” wrote Ron Reaman, vice-president of the Ontario branch. Under the LCBO’s “fixed-pricing” structure, the agency doesn’t haggle with its suppliers, which sometimes means it deliberately pays more than a supplier’s initial offer (confused? See our primer on how it all works). Likewise, it won’t haggle with bulk purchasers, either. For consumers, it’s not much of a choice: overpay at the store or over-overpay at the bar. (In its defense, the agency does claim to offer the lowest retail prices in Canada.) Read the entire story [The Globe and Mail] »