Ontario’s pretence at wine reform
The amazing thing about t he Ontario government’s new rules for selling wine in grocery stores isn’t how dazzlingly complicated they are, it’s how hard everyone had to work to make them that way.
It’s billed as a big liberalization. Premier Kathleen Wynne and Finance Minister Charles Sousa trooped out to a luxury grocery store in Wynne’ s Toronto riding Thursday morning to wave some bottles around and say they’re going to do what’s being recommended by their privatization czar, former top TD banker Ed Clark.
He and a panel of experts have been labouring away for well over a year on how on earth we can let Loblaw and Metro and smaller grocers sell wine without destroying everything we hold dear.
Well, now they’ ve got it: They’re going to license them. But not too many.
They’ ll start by auctioning off 70 wine-vending licences — half of which will be full licences and half of which will be restricted ones that let their holders sell a limited selection of wines for three years but will then convert automatically into full licences.
After the market has digested the first 70 licences, but before any more are issued, the province is to assess “the impact on sales of imported and domestic wine in the province, and the i mplications f or the Ontario wine industry. The province should consult with wine and grape grower representatives as part of this process.”
Because God forbid that customer preferences in a marginally freer market should do anything but help our domestic vintners. If it turns out that we’re buying less Ontario wine, the government will have to do something. Or, rather, stop doing something.
But by 2025, if everything goes OK and we haven’t overly offended Constellation Brands Inc., the Amer- ican company that makes more wine in Ontario than anybody else, maybe we’ll be up to 150 licences.
Ontario has 650 LCBO stores now, plus 210 “agency” stores in smaller towns (which already have a perfectly good model that we absolutely cannot under any circumstances replicate), plus 160 winery-owned Wine Racks, plus dozens more stores at wineries themselves. So 150 licences by 2025 is a noticeable number but not enough to destabilize the market — only about one licence for every three municipalities in the province. Over nine years.
Some wine licences will be linked to beer licences and some won’t. So t he place where you buy your bread and milk might sell one, both, or probably neither. They’ l l be “fairly distributed across the province and equitably allocated amongst large and independent grocers,” according to the government.
Also, grocery stores won’t be allowed to charge less than $ 10.95 for a bottle. No picking up a bottle of plonky red at Loblaws to go with a frozen lasagna and a bagged salad for a lazy night in. You’ll have to make a separate stop, because of social responsibility.
There are, at least, provisions so that the big wineries can’t crowd out smaller ones entirely, like minimum shelf-space requirements.
Some years a go, Toronto tried to liberalize its street- food scene. The city wanted variety, a showcase of Toronto’s ethnic diversity, and ideally some stuff healthier than sausages. The health department oversaw the menus. The new vendors could not put up signs. They had to buy standard $ 30,000 vending carts from the city. The city assigned them crummy locations.
It was a fiasco, a legendary failure of good intentions gone wild. The Ontario government seems to see it as a model.
Unlike t he brave solo entrepreneurs who tried to sell empanadas and rotis with a whole big stupid city government sitting on top of them, grocery chains will probably find a way to make money selling alcohol.
“The biggest impact will be on the LCBO, which will have to adapt its business model,” Clark said at the Toronto announcement. It’s “the biggest increase in competition the business has ever faced.”
Except the grocery stores will have to buy all the wine they retail from the LCBO in the first place and will be restricted from undercutting it or selling at much more convenient hours, so we’re not exactly talking about an existential threat.
But it’s simply not clear what problem the Kafka panel’s recommendations are supposed to solve, unless it’s: “How do we say we’ve moved alcohol sales out of the 1950s without actually changing very much?”
NO LOW PRICES, NO CONVENIENT HOURS, FEW FOREIGN WINES.