Keeping an "I" on the LCBOKeeping an "I" on the LCBOThe carefully nurtured public perception is that The Liquor Control Board of Ontario does a great job of looking out for Ontario wineries - especially the little guys. Over the past few years they have repeatedly committed themselves to target sales of 50% Ontario wine, and each year it seems that the Ontario market share, and selection, decreases. According to LCBO annual reports, the number of Ontario wines they list has decreased from 562 in 1990 to 397 in 2004, a drop of more than 29%. Some of the 397 are only available in about 60 stores. Imported numbers went up from 922 to 1,113, an increase of more than 17%. Ontario wine sales as percentage of LCBO $ wine sales decreased in this period by almost 23% based on 1990 dollar sales. In a company that every year talks about growing the Ontario wine industry, and that brags about making its goals come true, how can this happen?
2004 count 2005 attempted count the aftermath 2006 Toronto Wine & Cheese Show
I believe that the LCBO sees Ontario Wineries as competitors to be either controlled, cherry-picked or eliminated. They are trying to promote "litre" rather than "dollar" values of "Ontario" wines. LCBO includes a $10 litre of "Product of Canada" wine - containing more imported than Ontario-grown wine - as more valuable to their Ontario wine goals than a $30 750 ml bottle of world-class 100% homegrown wine.
This is exacerbated by the ability of the LCBO to see the plans and financial results of these competitors via the Alcohol and Gaming Commission of Ontario, and to take action accordingly. I wonder how well WalMart would do if they had access to the plans and results of all their competitors?
The more that successive governments have demanded dollars from the LCBO as almost their only concern, the more the LCBO has attempted to take market share from the competition. Their only legal commercial wine competition is the domestic wine industry. Given my training I find this to be a dysfunctional arrangement for any government which cares about its taxpayers.
I believe that the existence of the LCBO depends jointly on dollar "dividends" turned over to the province and money spent convincing the general public that the LCBO is warm & cuddly - Friend and Guide to all. {I am not calling for privatization of the LCBO, just a refocusing of goals and spending, cleaning up of management practices and a partial opening of the marketplace combined with an end to dollars-as-job-#1.}
To this end I have been publicly tracking the number of "free" (non-advertising) products that the LCBO has been recommending in their publications as below:
Please click on the publication to see my record of their recommendations:
LCBO Classics Catalogue
LCBO Food and Drink Catalogue
LCBO Vintages Releases
LCBO Price Books (General List)
General Publications (includes above)
Note that the LCBO generally is less supportive of Domestic wines in their top publications (Classics and Vintages) than the free wine press. In early 2006 (Jan 31) both Vintages and Food & Drink are at the lowest support levels of the millenium on an annual basis.
On November 26, 2004 I visited the LCBO Vintages booth, at which I counted 22 imported wines and 2 Ontario wines available for sampling. Staff on duty at the kiosk did not dispute my numbers. Ontario content here: 8.3%.
I followed this up by entering the LCBO on-site store and quietly counted the feet of shelf exposure occupied by Ontario versus imported wines. The result: 28 shelf-feet of Ontario wine, compared to 430 shelf-feet of imported wine, as well as an enormous display showing 12 open cases of Yellow Tail wines from Australia. Ontario content here: 6.1% ignoring the effects of the display.
Introducing myself as a former employee I asked an LCBO employee if he cared to dispute the figures I had calculated. He did not. After I had asked why the domestic wines had so little space, I was informed that there were only 3 domestic wineries at the show (actually more than 15) and that 95% of the wines available at the show were available at the LCBO store (which I doubt but cannot prove). I also noticed that the Ontario wines available were only partly from the wineries attending the show, with the remainder from other wineries. In general, I would say that the individual was upset with my being there, and asking these questions. I made absolutely sure that I did it in a non-menacing fashion. I was after information, not trying to cause aggravation.
Remembering the unpleasant experience of the year before, I handed my card to the employee at the till in the LCBO store and informed her that I wanted to count the shelf space. She went to ask someone in authority and talked to a man at the back of the public area of the store who looked at my card. I was probably 20 feet away, but was easily able to hear him tell her (loudly) that "That's the Ontario wine guy, and he can't have" at which point I could no longer hear him. The first employee returned my card to me, and very politely informed me that I was not allowed to count the shelving.
The man in authority was the same person who had been upset with me the year before. He was still on the floor, and as there was nobody near me I advanced one or two steps towards him and said "Sir I need to have your name." This was not said in any kind of menacing manner, but I did want at least his first name. He covered his nametag up, said "No way, no way" and walked away from me. Not wishing to cause any kind of scene, I took this to mean that
a) the LCBO man was very upset with me, and in no case wanted to discuss anything at this time, and
b) that my presence in the store was most certainly unwelcome.
Naturally I left the store. I had no doubt that he had evicted me.
I was obviously quite upset with this, as the only real reason I had gone to the show was to research this article, one of many I intend to publish. I travelled to the show, paid my entry and parking, and was virtually shut out.
When I left the store, I talked to a few people in the industry that I know, wine writers, winery personnel, others and left very upset. I couldn't believe that LCBO personnel would treat people in such a demeaning fashion in public.
On December 2, 2005 I sent the following email to LCBO FOI:
"As we have discussed by telephone, I was not allowed to count the shelf space at the on-site LCBO store at the Gourmet Wine Show shortly after opening at 2 p.m. on Friday November 18th. In fact the decision-maker refused to even tell me his name, turning his back on me and walking away saying "No way" to my request for his name.
I would like to know, by email, the percentage of shelf space that was occupied by Ontario wine versus imported wine. I would be willing to accept, as surrogate thereto, the number of cases of Ontario wine that were shipped to the show compared to the number of cases of imported wine."
Upon calling them afterwards I was told that they would try to get this information to me. I was later telephoned (Dec 7) to tell me that I would need to send in a cheque for $5.00 and a request under FOI for the information. This was received, cashed and the next correspondence was that I would need to pay $49.00 for the information that I wanted. As time passed I was certainly getting less happy. Still, I did not (and as of Jan 31 06 have not) file an official complaint about the treatment at the store.
I sent the request back with a cheque for $49 asking for the information. Nothing happened until January 19, 2006 when I was called and was told that as there really wasn't serious processing to do, the fee was being waived. The cheque and the information below were promptly returned to me by courier on January 24th. The official response to this request is as follows:
Display space at temporary LCBO "kiosks" located onsite at consumer and trade shows is allocated to reflect the selection of products being offered for sale by all show participants. Onsite "kiosks" at shows do not follow LCBO plannogram guidelines used in our corporate stores when it comes to product allocation. Show sponsors (who make the largest financial contribution to the show) normally have the most significant product offerings in their own displays at such shows and this is reflected in the LCBO "kiosk".
Since this year's Gourmet Food and Wine Show was sponsored by Wines of South Africa, the number of wines available for tasting and sale from this country at the onsite LCBO "kiosk" was greater than those from other participating countries and growing regions. Only wines featured at the show were offered for sale at the LCBO "kiosk", regardless of their country of origin.
That said, according to LCBO staff involved with the setup and management of the Gourmet Food & Wine Show "kiosk," between 35 and 46 linear feet of shelf space were devoted to Ontario wines. This approximated the shelf space alloted to other countries and growing regions, with the exception of South Africa. A total of 209 wines were offered for sale at the onsite "kiosk." Of these 37 were Ontario wines (24 General Purchase items and 13 from Vintages).
Some Ontario wines available at the show were "winery only" products not sold by the LCBO. These wines were not available at the LCBO "kiosk". As well, certain Ontario wines displayed in the LCBO "kiosk" were only available in limited quantities and these sold out prior to the final day of the show.
The store seemed to be the same size and in the same location as in 2004. I wasn't there long enough to notice any special displays and I deliberately wasn't looking at anything until permission had been granted. If indeed there were 37 of 209 wines that would add up to 17.7% of the brands available. In both cases the total is nowhere near 50%, and there is no way to verify the information.
My final comments involve a question and a statement:
How would Florida taxpayers react if the Florida government gave more than 80% of their orange display space to California oranges?? There is a serious problem when the Ontario government is pushing mainly imported products as evidenced by tracking the publications above, and something is sadly out of control. I think that all Ontario taxpayers should be keeping an eye on this and other government organizations to see just how they actually operate.
As long as there is an LCBO and I have eyes "I" will be watching them.
On March 26, 2006 I paid my admission to the Toronto Wine & Cheese Show. I counted the Vintages Booth (as best I could) to find 4 Domestic and about 25 Imported wines open for sampling - or about 13.8%. Still nowhere near the 50/50 goal, but better than offered through the Vintages Releases. After taking a number of Tums and fortifying myself for possible abusive behaviour, I went into the on-site store. This time I did not identify myself, and walked around, quickly counting the shelf space. (I was neither recognized nor kicked out of the store this time!) This time the split was about 51 feet of domestic wine compared to 299 feet of imported, or about 14.6%. Certainly an improvement from the 6.1% shown at the 2004 Gourmet Show, but certainly nowhere near the 50/50 split... I'll be showing up at some shows from time to time, and reporting results.
2004 To see what the LCBO actually does in public, I attended Toronto's Gourmet Food and Wine Expo. where the LCBO runs both a Vintages booth and an on-site store. This is a premium annual public event at which the LCBO wants to put its best foot forward.
2005 On Nov 26, 2005 I revisited the two booths. The Vintages booth was busy and I could not get an exact count, but my best estimate was 5 Ontario against 25 imports. I confirmed this rough estimate with a staff member who was friendly and helpful. This improved the 8.3% from the year before to 16.7% (higher than Vintages in any year since the Millenium), but it was also certainly nowhere near the 50% level.
The following week I telephoned the LCBO Freedom of Information Office, asking what their policy was concerning such things as looking at shelf space. The people at FOI are more than helpful, polite and professional. Within a few days I was told that there is no formal policy, and they saw no objection to a person looking over LCBO stores (at least the public area) as long as the person doing so was not a nuisance of some kind. I came away with the impression that they agreed it would be better for me to identify myself upon entering the premises.
"Ontario Wine Representation - LCBO "Kiosk" at the Gourmet Food & Wine Show
I have some comments on the information provided by the LCBO. If true, the footage of Ontario wine increased slightly compared to the previous year, and if the overall size of the store wine section were the same the percentage would have increased from about 6% to a maximum 10% of the shelf space. In any case I can't be sure because I wasn't allowed to look. One remark above makes me think that the LCBO sees Ontario as the same as any other region rather than something special.
Larry Paterson, January 31, 2006.
