Ontario liquor store management under the thumb of the Canadian oligarchy

The first ever strike by LCBO workers has come and gone. While workers made some gains from their two-week standoff with the state, Doug Ford moved ahead with his plan to shift some alcohol sales from the LCBO to grocery stores a year early. But it's the behind-the-scenes battle that should get more attention, as LCBO board members applauded Ford's undermining of their own Crown corporation.

LCBO store profits contributes approximately $2.5 billion to Ontario's annual budget. According to OPSEU President J.P. Hornick, outsourcing alcohol sales to grocery stores would divert public funds "to help big box grocery store CEOs get even richer from alcohol sales” while the government loses an important source of revenue without replacing it.

LCBO Leadership "Means Business"

Even LCBO president and CEO George Soleas seems to support Ford's move. In March, he told the Toronto Star that Ford's plan to allow private alcohol sales was "music to [his] ears". No surprise there: the liquor store's big boss is also on the board of directors of the Retail Council of Canada (RCC), alongside representatives from Loblaws, Walmart, Metro and Sobeys.

RCC is a membership based "trade association" that prides itself in being the "strongest retail voice in Canada". They represent the interests of the owners of more than 143,000 storefronts in all retail formats, including department, grocery, specialty, discount, independent retailers, online merchants and quick service restaurants.

The RCC has publicly endorsed Ford's move to give contracts to the big grocers. Hornrick told PressProgress that OPSEU considers Soleas' position on the RCC board a "clear conflict of interest" and a "betrayal of the public trust".

Hornrick added that "during the past seven years that Soleas has been both the President and CEO of the LCBO and an RCC board member, there has been more and more privatization of alcohol sales in Ontario." 

Soleas, among others, referred to his love of "competition" when making his endorsement of these plans. What is left out is that this competition is with grocery monopolies that have a knack for eliminating or buying out their competitors.

But Soleas is not alone in representing the Canadian oligarchy in the administration of the state-owned enterprise: Claudia Hepburn, first cousin of Loblaws poster child Galen Weston Jr., has been an LCBO board member since 2021.

Hepburn is also the former Director of Education Policy for the Fraser Institute, a prominent "think tank" that has published articles arguing for the complete privatization of the LCBO.

But there is more. She serves on the board of C.D Howe Institute, another prominent "think tank" that (surprise, surprise) has several articles denoucing OPSEU's decisions to strike. The articles do not stop there as there are several pieces arguing for the need to privatize alcohol sales and create more competition for alcohol sales.

How does LCBO make money for Ontario?

In 2023, LCBO's gross revenue was $7.41 billion. Of this, there was a net income of $2.46 billion which went directly into the budget of the province of Ontario's administration. The remainder of the gross income goes towards things like wages, costs and operations. 

The LCBO earns profits on their alcohol the same way any other business does, by marking up the product more than what they purchased it for from their suppliers. All their alcohol is sold at a standardized price, which can be seen on the LCBO website. Currently, LCBO is both a seller and a wholesaler but makes more in profit when it is sold from their own store

LCBO still earns a profit on the alcohol sold in licensed grocery stores, albeit with a lower return. For a $14 bottle of wine the LCBO earns $5.97 if it's sold at an LCBO store, versus $4.75 if it's sold at a grocery store. As such, if LCBO functions as only a wholesaler, the LCBO earns less in profits.

Currently, LCBO net profits are paid to the Ontario government in the form of an annual dividend which helps fund local and provincial public programs and services. However, this fact has not stopped Ford from redirecting profits away from LCBO retail stores into private retails, with no word on an alternate plan to maintain revenue for public programs and services. 

Economic Freedom... For Grocery Billionaires

Doug Ford's association with Canadian CEOs and billionaires has not gone unnoticed. In fact, a website by the name of "So Fund Me" has been launched to highlight Ford's decisions that underscore his support for privatization. The website calls on Ford to "stop gutting the services we all rely on. Stop padding the pockets of your billionaire buddies. Put Ontario before billionaires. NOW."

Ontario's Voters Coalition also published a timeline outlining Doug Ford's policy choices favoring CEOS, friends, and important PC Donors. One of many examples listed was Loblaws CEO Galen Weston meeting with Doug Ford, in August 2018, with concerns about the plan to raise the minimum wage. Shortly after, Doug Ford passed Bill 47 which cancelled the very same wage increase. 

LCBO workers who were on the picket lines expressed similar sentiment. Noah, a worker at the Sauble Beach LCBO, frustratedly explained, "I think Doug Ford has one agenda and that's to help all his CEO buddies; I don't think he's interested in helping us out."

The LCBO's connections with the Canadian oligarchy suggest that the Crown Corporation's top brass is intent on redirecting public funds to the private sector. So, it's not surprising that the LCBO doesn't want to open smaller, more convenient outlets, such as the LCBO's rural branches. These branches would also make alcohol accessible, a key argument the Ontario Conservatives relies on to justify Mr. Ford's decision to sell in the big box grocery store monopolists.

The number of outlets was limited to 400 in the latest agreement with OPSEU, but kiosks or other smaller locations that actually employ LCBO workers could be a solution amenable to both the workers and Ford's intent to increase accessibility of alcohol sales.