Upon seeing an LCBO store, visitors to Ontario from former Soviet states are reminded of their “good old Communist days” when all shoe stores, electronics stores, and other shops offered identical goods at nearly identical prices. “But this is Canada,” these visitors point out. “Under what right does the government control the sale of liquor?”
The Ontario government would argue that for the greater good of society government must control the sale of alcohol. But is there really a difference whether liquor is sold in publicly or privately owned stores? Private companies abide by the law, and those that don’t lose their license. Don’t we drink Pepsi from corner stores and buy sausages from hot dog stands?
Consumers have no choice but to purchase anything the LCBO sells at whatever prices it chooses. The LCBO rakes in over a billion dollars in profits for the provincial budget, making it an “amazingly efficient” enterprise. This hypocritical profit is hardly earned with sweat and blood on the scale of corporations like Dell and Toyota, private companies that have to fight for profits. Next step, the Ontario government should nationalize gas stations, banks and supermarkets in its benign quest for more “efficient” businesses.
If the government wanted the LCBO for tax revenue it could reap just as much or even more under a privatized system. Since Alberta dismantled and privatized their ALCB in 1994, tax revenue from liquor sales galloped from around $400 million to over $500 million.
The number of stores has boomed in Alberta thanks to privatization. Proportionately, Alberta has three times more stores then Quebec and seven times more then Ontario.
It is true that some stores might offer a narrower selection if privatized because in certain cases that makes economic and practical logic. Czech wine might not sell so well at a store located in Chinatown, say, and private stores would respond appropriately to these trends with specialization. The store in the Czech neighbourhood would offer more Czech liquors like absinthe, becherovka, and trestovice, and stores would take a similar unique approach in the Chinese neighbourhood.
Currently, the LCBO uses a dull Soviet approach that sees all stores offer the same selection, irrespective of market conditions and consumer tastes. To illustrate, in 2004 the total number of different alcoholic products available in privatized Alberta was 11,575, compared to monopolist Ontario’s 3,449.
The LCBO is proud that their customer service is unmatched because their employees are better trained and more knowledgeable than those in the private sector. Yet there is no reason why the private firms would not offer the same level of customer service if their customers will it and pay for it. Individuals are free to purchase business class airline tickets, but most still go for the economy class. The LCBO claims that just because it provides business class service that must be what consumers want, even though they have no choice in the matter.
In light of the hollow justification for the LCBO’s existence, it’s a wonder that this Soviet-style enterprise manages to survive in supposedly “progressive” Canada. The LCBO’s monopolistic practices have taken citizens hostage. How long will Ontarians take this? For the good of private business everywhere, the LCBO must go the way of the Berlin Wall.
