4.7 billion reasons to love the LCBO

 

May 17, 2012

http://blogs.canada.com/2012/05/17/4-7-billion-reasons-to-love-the-lcbo/

 

Transferring a record $1.55 billion to the Ontario government, the LCBO was able to give 9.9 per cent more than the previous year. According to Kristin Craik, “clearly, as by LCBO’s successful example during the global recession, the alcohol industry thrives in times of strife.” So good was business, the LCBO was able to open 19 new stores and carry out major upgrades to 32 others.

 Here are the figures:

  • Net sales of $4.710 billion for 2011-12, up $218 million or 4.9 per cent over 2010-11
  • Transfer of  a record $1.63 billion dividend to the Ontario government, $80 million or 5.2 per cent more than in 2010-11
  • Net income rose $98 million to $1.658 billion, up 6.3 per cent
  • Vintages’ sales rose 10.2 per cent or $39 million over the previous year to $425 million
  • Wine sales rose 5.7 per cent to $1.66 billion (whites up 6.6 per cent, reds up 5.2 per cent)

“Net sales growth resulted from consumers trading up to premium products, incremental sales from new stores, an appealing product mix and effective marketing,” LCBO president and CEO Bob Peter said in a statement.

It comes as no surprise that the LCBO recorded a record profit for the 17th consecutive year. The only shock is that despite continued consumer unrest and unparalleled Canadian capitalist savvy, no one has been able to do anything about it.

In the past year we’ve seen mobs, movements, protests and sit-ins. A St. Patrick’s Day riot rocked London, Occupy Toronto sat in parks, squares and malls and Quebec students have raged to protest tuition fees. How has the LCBO remained immune to violent demands for change? Well, for one thing, that $1.55 billion deposit into the province’s coffers goes along way towards paying for health care and education, not to mention roads (wink, wink, say no more). And, they have taken social responsibility to an unprecedented educational level. Just don’t ask Martin Cohn or Jan Wong about their take on the issues.

According to the Ontario Auditor General report, the LCBO is not using its buying power to negotiate the best prices. Wine geeks grumble incessantly about the LCBO’s failure to use their top three world buying power to negotiate good deals. While that is certainly true, especially with respect to California imports, there are more wines at competitive prices available, at all times, then I could ever want for my cellar. Winetarians listen up. You don’t need that bottle of overpriced Pontet-Canet, Pahlmeyer or Petrus. Analyze the product offerings, locate the good deals and buy something else.

 
 
Good to go!
 
 
 
Sources:

ottawacitizen.com

businessreviewcanada.com

canadianbusiness.com

 

6 comments on “4.7 billion reasons to love the LCBO

  1. I love your rich words. great stuff. I hope you produce others. I will continue watching

  2. piracetam says:

    salutations from over the ocean. detailed article I shall return for more.

  3. It sounds like you are far more enamored with your government controlled liquor store than I am with mine. While there are certainly some good deals to be had (but mostly in off-vintage or over the hill wines), the vast majority of wine on the shelves is 15-25% higher than in neighboring states (one of which has no sales tax). For me, the PLCB is an abomination….

    • DC,
      I wrote that almost a year ago and at the time I was certainly “on the fence.” I still stand by the notion that the LCBO has had a large hand in developing a wine industry that needed the power and dollars to become something more than parochial. I had also intended the article to be a bit tongue-in-cheek and that those who know would read between the lines and see that I was also poking fun. Unfortunately, as I get older not so many people find me funny….Like you, my colleague Rick VanSickle cried foul at my words. Now a year later, I have a clearer understanding of the big picture. The LCBO, or ‘KGBO’ as Konrad Ejbich refers to our monopoly has to cease and desist. I am a big supporter of the Wine Council of Ontario’s MyWineShop initiative, to add private wine stores in our province. More than that, I am hopeful that Free My Grapes will become a reality and that soon Ontario will follow the lead of other Canadian provinces to allow free and uninhibited delivery of their wines across our unguarded borders. The next provincial election will be a big one. A Conservative majority could mean the end of the LCBO and even a Liberal win could effect at least some bastion of a tiered system. Private wine stores will eventually come to Ontario and hopefully before I get too old.

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