I travel quite frequently and each time I ponder how much local residents pay for their wine and spirits. On my recent trip across the United States, I went through 10 states – New York, New Jersey, Delaware, Maryland, Washington DC, Virginia and Pennsylvania on the East Coast and California, Nevada and Arizona on the West Coast. Wanting to save money by bringing some alcohol back within the federally stated allowance, I searched the web for an answer as to which state has the lowest price. Several forums pointed to California having the cheapest prices out of the states that I was passing through, so while in San Francisco, I browsed several boutique stores within hotel’s vicinity, only to find them more expensive than LCBO. I knew that there must be larger retailers and so asking a concierge, I was advised to visit BevMo, a large liquor store that is usually cheaper than Safeway food supermarket, but may not be cheaper than Costco for which membership is needed.
Browsing the shelves at BevMo, I noticed that spirits are considerably cheaper than we get at the LCBO, while US produced wines are roughly less than $5 cheaper and wines from the rest of the world are on average the same or more expensive – as summarized in the table below.
Summary of prices at the LCBO, BevMo and Duty Free Shop in Buffalo before entering Canada.
Now with the passions running high from seeing how much more hard liquor costs here, let us indulge in the following debate. We all know, or at least we think we know, that we pay more than our southern neighbours or the Europeans, but really, lets put all of the information on the table and discuss it. I don’t drink hard liquor, so in the discussion here I may have a bias in the points that I’m about to make in regards to hard liquor; as well as I will mainly be focused on wines in the below $30 range – my budget.
The upside of a large monopoly.
As market economy dictates, larger purchases result in cheaper goods and hence we get the lowest prices that we can get; or is it that since the LCBO is the world’s largest purchaser, it causes the prices of those specific products it sells to inflate globally? – pictures herein disprove the latter.
One may point out that Europeans pay as little as €2 per bottle of wine, price that is unobtainable at the LCBO. Though true, the product in debate is often of lower-than-table-wine quality (less than 80 pts), which here can be obtained for under $5 (discounts offered at wineries, make-your-own-wine at the wine Butler etc). However, when it comes to wines that are also sold at the LCBO, the prices are only slightly higher here than in the country of making, once currency conversion and shipping costs are taken into an account.
Sogrape Mateus Rose – picture taken in Spain at a HiperMarket 2011
€3.99 = $5.53 not inclusive taxes or shipping costs; LCBO#166 $9.95
Staying on this continent, LCBO’s prices for the non-US wines are quite comparable (even without currency adjustment) or even more expensive (see picture below), while the US produced wines average $5 less (in the below $30 category). This observation, however, isn’t true across all the states, some states sell more expensive alcohol (wine & spirits) than we do here and moreover, some cities like Manhattan or downtown Las Vegas, charge an arm and a leg regardless the type of alcohol – no government regulated stores there.
Also, looking elsewhere within Canada, Ontarians are paying less for wine (not sure about spirits) than any of the other provinces that allow free market – eg. B.C., Alberta or Quebec (including the wine-producing provinces of B.C. and Quebec).
Left to right:
Wente Morning Fog – BevMo USD$13.04 tax inclusive; LCBO#175430 $16.95
Muga Reserva – BevMo USD$32.61 tax inclusive, LCBO#177345 $23.95
Smirnoff – BevMo USD$10.86/750 ml – LCBO#31757 $25.45; BevMo USD$16.30/1.14 ml – LCBO#131391 $37.85; BevMo USD$17.40/1.75 ml – LCBO#38505 $56.20
The downside of a large monopoly.
As local winery owners and consumers alike would argue, LCBO’s monopoly system makes it hard to access the local goods. Wineries can only retail their products at the winery itself and though Vincor’s Wine Rack, Andrew Peller’s Wine Shop, Magnotta, Chateau des Charmes, etc. have other than on-site retail locations, small wineries simply cannot afford such overhead costs. Also, small producers cannot get their products onto LCBO’s shelves due to low production volumes and the products that make it there, are subject to LCBO’s unfavourable policy – e.g. LCBO can discount the product while the winery is still selling it at its original price. And even though, according to Wine Country Ontario, each bottle of Ontario VQA wine sold in the province, generates $12.29 to the Ontario’s economy (source: http://winecountryontario.ca/media-centre/industry-statistics), the Liquor Control Board of Ontario does little to promote it and counterintuitively, does an excellent job of promoting competition from other wine regions.
Recent movement to allow retailers (supermarkets, convenience stores, etc.) to sell wine and beer (My Wine Shop), is pushing the government to consider such options, and if implemented, such action would surely allow greater exposure of local wines, but unlikely at competitive prices satisfactory to the consumer. LCBO’s response to this movement? A promise of more shelve space, recent ‘Shine ON’ promotion in the recent September 14th Vintages Release and more hype about its ‘Ontario Wines’ section in the online Vintage magazine.
Low cost of expensive alcohol.
Though Ontarian liquor drinkers must reach many times deeper into their valets than our southern neighbours, LCBO’s revenue of $4.9 billion dollars in 2012-13 gave back $2.5 billion to the Ontario government (after all it is government agency), money that funded social projects and positively affected each and every one of us (source http://www.lcbo.com/aboutlcbo/media_centre/faq.shtml). As anyone who has visited the US would agree, the Canadian government (Federal and Provincial) does a pretty good job at keeping less fortunate people off the streets as well as ensuring that city centres don’t become dead zones – aspects quite visible of most US metropolises; not to mention we enjoy universal healthcare, great schools, social programs, etc. – all programs have to be financed somehow.
By no means am I unconditionally loving the LCBO (OK, maybe a little), I merely want to point out that there are good as well as bad aspects of having a liquor monopoly, and it solely depends on from which angle one is looking that determines which aspect has more weight.
Also, I still intent on purchasing hard liquor at the duty-free shop as a more economical present while on my way home from out-of-the-country travels, but I no longer will have the impression that buying wine at the LCBO is much more expensive than elsewhere in the world, nor I will object to spending $5 more on local wine (from LCBO or winery) despite knowing I could get a similar product from other parts of the world for cheaper. After all, though table wine should be a part of the daily diet, high quality wine is a luxury and if we can afford it, which we can, then we should and in turn support ourselves down the road. Bottom line, and as I have been doing, visit the wine country near you and discover the diversity of high quality products and the spectrum of hidden gems and make your afternoon a memorable one. http://grapeselections.com/wineries-of-niagara-peninsula/
Resources herein provide supporting evidence:
BevMo – large liquor store operating within California http://www.bevmo.com/
Quebec’s government run liquor store http://www.saq.com/
WineAlign – Ontario’s largest wine site that expanded into BC and soon will into Quebec – price comparison shows lower prices in Ontario. http://www.winealign.com
Wine Country Ontario http://winecountryontario.ca/media-centre/industry-statistics
My Wine Shop – http://www.mywineshop.ca/
LCBO profit declaration – http://www.lcbo.com/aboutlcbo/media_centre/faq.shtml
Online Vintages Magazine, the Ontario Wines section – http://www.vintages.com/circular/ontario.shtml?topnav