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Ont. Won't Adopt Recommended Sale of Wine and Beer in Supermarts, Sources Say

Posted on: Monday, 18 July 2005, 00:00 CDT

TORONTO (CP) - Beer and wine won't be sold in Ontario grocery stores any time soon despite an independent report that recommends the move, sources say.

The idea is one of several major recommendations to be released Monday by a four-member panel that reviewed Ontario's provincially-run retail booze business. But government sources say the province currently has no intention of allowing grocers to sell beer and wine. "There will be no major policy changes to how alcohol is distributed" one source told The Canadian Press.

The wide-ranging Beverage Alcohol System Review will recommend making beer and wine available at big grocery stores such as Loblaws or Dominion, and at large department stores that also sell food such as Wal-Mart, but not necessarily at corner stores.

The door would be open for the province to change its mind later but for now, sources say the Liberals are reticent about any measures that could potentially make it easier for teenagers to get their hands on alcohol.

It's also unclear whether there is enough public support for loosening up beer and wine sales.

The review, ordered in January by Finance Minister Greg Sorbara, was meant to help the government find ways to squeeze more money out of liquor sales without compromising existing controls.

Much of the buzz surrounding the review - which was first due to be released in the spring - has surrounded the possiblity of a partial spinoff of the province's lucrative liquor agency to private investors.

Sorbara has said all options except the outright sale of the Liquor Control Board of Ontario are on the table.

Despite those denials, the union representing LCBO employees fears privatization plans are in the works because a recent contract offer reduces their job protection, which they say sets the stage for a sale. Workers have threatened to go on strike July 28.

The government already reaps more than $1 billion a year from the LCBO, which has nearly 600 locations across the province.

Sorbara has not ruled out spinning off part of the wine and spirits retailer to investors in the form of an income trust, a scheme whereby investors buy rights to future LCBO profits, allowing the government to rake in potentially billions of dollars up front.

"We will be waiting with interest to see what the report has to say," said LCBO spokesman Chris Layton.

Proponents of privatizing the liquor retailer say it would be better run in private hands, but the LCBO disagrees, pointing to its ever-increasing revenues and an intensive store renovation project.

Other questions surround privately owned Brewers Retail Inc., which operates 436 Beer Store locations in Ontario and is owned by brewing giants Molson, Labatt and Sleeman. Critics have suggested beer sales should be opened up to competition.

Another issue is how to give Ontario consumers more access to products from the province's wineries.

In any event, opposition critics are anxious to seize on the contents of a report that's already long overdue.

The NDP doesn't want an income trust to lead to eventual privatization.

NDP Leader Hampton has wondered if the government will be tempted by an immediate cash windfall in an income trust spinoff that would sacrifice future revenue streams.

"The government is looking for ways - possible privatization, possible income trusts, possible use of more franchise stores - as a way of getting more short-term revenue out of the LCBO, regardless of what the cost may be to taxpayers of the province or what the cost may be to the province 10 or 15 years down the road," Hampton said.

The Conservatives, who while in power looked at a potential LCBO privatization but never pursued it, say proceeds from any offering to investors should be used to pay down provincial debt, not finance increases in spending.

"They need all the cash they can get on the operating side unless they can control spending, and there's no indication they're about to control spending, so off they go," said Conservative critic and former finance minister Jim Flaherty.

In January, former Conservative premier Ernie Eves said that when he looked at possible changes to the LCBO, experts estimated that a 100 per cent sale through an income trust would generate up to $16 billion in proceeds.

Source: Canadian Press

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