JULIAN HITNER TORONTO WINE CONSULTANT

"For love of everything that is wine"

JULIAN'S FINE WINE BLOG

Another article on LCBO price gouging

Posted by hitnerwine on January 10, 2012 at 3:15 PM

A delightful, to-the-point piece by Toronto Star columnist Martin Regg Cohn on the recent findings of Ontario Auditor General Jim McCarter, on the blatant heavy-handed price gouging of the LCBO. For his part, Mr. Regg Cohn blasts the LBCO for forcing wineries to sell products to the LCBO at an inflated price, just so the latter can charge its Ontario-based customers more.

*

And yet, both Mr. McCarter and Mr. Regg Cohn suggest the LCBO should simply ask producers to charge less and pocket the extra money, themselves, instead of reducing inflated costs to consumers, so the provincial government can rake in even more money; which I am dead set against. And here’s why.

*

In case Ontarians have forgotten, not long ago Mr. McCarter discovered what many Ontario-based wine writers have long known all about, and argued against, for so many years: the heavy-handed price-setting polices of the LCBO, where the consumer is oftentimes forced to pay much more for fine wines and spirits, among other types of alcohol, than other places such as Europe or the United States, when we should actually be paying less on account of the LCBO’s unparalleled purchasing power.

*

For years, the LCBO has defended its pricing strategy with the age-old argument that lower prices contravene its mandate of "social responsibility.” Buried deep on its official public website, the LCBO explains that it sets “minimum prices, since research shows that price affects consumption levels.”

*

Now, if you were a skeptic, like all journalists—and all intelligent people—ought to be, you may probably want to examine such research for yourself. Granted, common sense would dictate that a bottle of vodka costing only a buck would invariably drive alcoholism through the roof, especially with people already suffering from addiction. In short, though it might seem contrary to what I’m trying to impart, I have no objection to minimum prices on alcohol.

*

Still, there must be limits to how these prices are to be set. While dollar-vodka seems grossly irresponsible, why do I have to shell out a minimum of $40 for any bottle of champagne? In the UK, one can buy a bottle of champagne for £15, sometimes even less.

*

Need another example, what about a bottle of Rémy XO? Why do I have to pay a ludicrous $226.80 for a 750-mL bottle, when I can purchase it for up to half that price abroad?

*

And then there’s wine. You wouldn’t believe how many wines, especially premium ones, you could buy cheaper outside of Ontario, not necessarily anywhere else in the country (government-monopolized, as mostly it is) but outside of Canada, where responsible alcohol buyers are treated with more respect. Here’s just one example: at a large liquor store in Buffalo, a bottle of 2006 La Parde de Haut-Bailly costs $31.44. Know what the LCBO price is? $48.00.

*

What can we learn from this? In each and every case, my right to purchase a bottle of champagne, fine Cognac, or premium wine at a reasonable price is being infringed, not because of some patently self-serving "social responsibility" mandate, but because I’m strictly being gouged.

*

That’s the trouble with approaching the matter of price setting with the deeply flawed notion that everyone who buys alcohol just wants to get drunk. What about all those moderate imbibers out there who merely, legitimately want to get a fair deal for the wine, beer, and spirits they purchase? I’m not saying such products should all cost a dollar, but they should at least be in line with what people pay elsewhere.

*

At present, the fact that a government monopoly is charging us so much more, especially for finer products, is simply rubbing salt in the wound.

Categories: None

Post a Comment

Oops!

Oops, you forgot something.

Oops!

The words you entered did not match the given text. Please try again.

Already a member? Sign In

0 Comments