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It's impossible to ignore the retail tremors caused by the surging loonie. Department stores and supermarkets have slashed hundreds of prices. Numerous automakers are offering incentives such as substantial rebates to sway would-be car buyers from purchasing vehicles stateside.

Yet, there's one entity where it's business as usual these days despite a vibrant Canadian dollar: The Liquor Control Board of Ontario.

Indeed, even though the lion's share of the hooch found on LCBO shelves is sourced from the U.S. and abroad, prices have not noticeably fallen. In some instances prices have inexplicably increased.

The Sun has obtained data from a liquor industry insider indicating the LCBO is not passing along the benefits of a stronger Canadian dollar to Ontario consumers by way of lower prices.

For example, check out the prices of U.S. whiskeys stocked by the LCBO. From December 2006 to November 2007, the price of a 750 ml bottle of Jim Beam Bourbon increased by 3.3% ($23.95 to $24.75). Indeed, every U.S. whiskey carried by the LCBO except for three brands was subjected to a price increase.

The news isn't good for consumers on the wine front, either. Excluding "limited time offer sales" of the 109 foreign wines price-checked, 30 declined in price while 33 remained the same. However, 46 brands were subjected to a price increase. Some of the increases were significant.

The analyst notes prices of foreign-sourced brands should be dropping by 15% given the improvement of the Canadian dollar. "But in real terms, consumers at the LCBO have been hit by an 18% price increase," he notes.

At the same time other liquor boards across Canada are reducing prices. A recent press release from the Societe des alcools du Quebec (SAQ) notes: "In response to the strength of the Canadian dollar and to ensure consumers are able to benefit from it, the SAQ is preparing to adjust the in-outlet retail prices of all continuous replenishment products that it pays for in foreign currencies."

The price adjustments, which took effect in late November, saw the SAQ roll back the prices of almost 600 products. Quebecers are now enjoying price savings ranging from 3.4% to 4.1% across the board.

ROLLBACK PRICES

Not to be outdone, the Nova Scotia Liquor Corp. announced a price rollback on 1,590 products (NSLC stocks 2,162 general list products.) According to NSLC CEO Bret Mitchell, the rollback is all about "passing on the benefits of a stronger Canadian dollar to consumers."

Indeed, in Nova Scotia, some prices were significantly cut. For example, a 1.5 L bottle of Sierra Valley Zinfandel was reduced from $19.74 to $15.99 (a 19% reduction).

But things just don't add up in Ontario -- especially when one considers the LCBO is one of the largest purchasers of beverage alcohol in the world (so it should enjoy bulk discounts with suppliers).

LCBO CEO Bob Peter didn't return repeated calls. However, LCBO spokesman Chris Layton said in a written statement "about 90% of all imported products sold by the LCBO are purchased in Canadian dollars."

This practice, says Layton, has helped to keep prices "stable." But Layton later contradicts himself by noting some brands have indeed been reduced in price and the LCBO expects to cut other prices "in the near future ... [but] at this point I can't be more specific."

So much for price "stability."

The industry insider ridicules the LCBO's pricing rationale as "unbelievable bafflegab ... if they buy imported product in Canadian dollars, those Canadian dollars are worth that much more now than a year ago."

NO INCENTIVE

The sad reality for Ontario consumers is the LCBO has absolutely no incentive to lower prices. In fact, it actually has an incentive to keep prices high. The crown corporation routinely crows about how it delivers one record quarter after another to its ministerial masters. Assuming consumption remains the same, lowering prices would translate into lower sales totals. Also, given the LCBO reports taxes as "revenue" (perhaps the only entity in the world to do so), this acts as a further disincentive to rollback prices.

Bottom line: The LCBO bases its very existence on the premise of "social responsibility." Too bad the social responsibility doesn't translate into a break at the cash register, too.

David Menzies is a freelance writer.

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