# Crown Corporation sales = D'oh!



## CubaMark (Feb 16, 2001)

So, I saw this headline....

Ontario ponders sale of Crown corporations to beat down deficit - The Globe and Mail



> The cash-strapped Ontario government is looking into the sale of all or part of its collection of Crown corporations, including the provincial lottery company and the retail monopoly on liquor sales, to raise cash to close a $24.7-billion deficit this year.


...I simply do not understand the willingness of politicians to sell off profitable crown corporations to deal with immediate debt problems. Short-term gain that in the long run weakens the economy and endangers public services.

Nova Scotia Power was privatized by the provincial Tories in 1992 to deal with debt problems. The long-term result? An under-maintained, inferior transmission system, cuts to linemen ranks, demonstrated inability to respond to weather crises, ridiculous profits, overcompensated CEOs, high electricity rates, etc.

The equation is never simply economic: it must also include the value of that service to the public, especially when a Crown Corporation is an essential service (e.g. Hydro).

Ontario will regret this, if it goes ahead...


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## Macfury (Feb 3, 2006)

As long as the sale price of the asset is fair...go for it!


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## Sonal (Oct 2, 2003)

CubaMark said:


> The equation is never simply economic: it must also include the value of that service to the public, especially when a Crown Corporation is an essential service (e.g. Hydro).


Are the liquor stores and the lottery essential services?

I have mixed feeling about this. On the one hand, I see your point about pubic services. On the other hand, the LCBO has some seriously sticky fingers... sure, they are profitable, but considering that they have a near-monopoly on liquor sales you would think they would be more profitable.

There was a study ordered not long ago (by the government) that concludes that the LCBO as it exists today does not deliver the best benefit to Ontario... the government promptly rejected this study.

Strategy for Transforming Ontario's Beverage Alcohol System


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## SINC (Feb 16, 2001)

Privatization of liquor stores in Alberta has been great for consumers. When we had but two stores in our city, every holiday weekend and especially over Christmas and New Years, one was met with long lines and very crowded conditions.

Now that we have 16 liquor stores, one can shop in comfort, take advantage of sale prices and buy wine beer and spirits all in one place. The beer and wine is chilled too! The same in Ontario would likely be welcomed.

I even pay slightly more to shop at one Mom and Pop store that really treats me right.

I draw the line though at the Lottery Corp. If it works like the Western Canadian Lottery partnership, profits from those lotteries go to the community in the form of grants to groups for all kinds of events and causes to help people be it sports or research of celebrations. Putting those profits in the hands of a private business makes no sense at all.


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## MacDoc (Nov 3, 2001)

and have lots of DUI's


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## screature (May 14, 2007)

MacDoc said:


> and have lots of DUI's


What does that have to do with the privatization of liquor sales? 

That is the individual's responsibility not the government's. 

Next you'll be saying the best way to deal with DUI is the return of prohibition.  

However, in the province of Ontario (even though I live in Quebec... perhaps my opinion is formed* because* I live in Quebec). I think the LCBO is a good thing. Not for the reasons you might expect... i.e. paying into the general coffer... but because of the buying power that a state monopoly brings. The LCBO is the single largest purchaser of wine and spirits in the world. As such they get a premium when it comes to purchasing. 

Almost anything that I buy at the SAQ (the Quebec Liquor Control Board) can be purchased more cheaply on the Ontario side. Because I live on the border of Quebec and Ontario the only purchases I make on the Quebec side are convenience purchases, i.e. last minute purchases when I can't afford the time to run over to Ontario.

Also the service that I receive at the LCBO (at least the ones I frequent) is impeccable. I started getting into wine about 15 years ago and I owe a large part of my knowledge to the staff at the Vintages component of the LCBO. Plus their FREE magazine that they release every month is incredible... very informative and the production quality is outstanding.


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## SINC (Feb 16, 2001)

MacDoc said:


> and have lots of DUI's


Like any province, some people abuse alcohol and about 4 in every 100,000 do so in Alberta (hardly an epidemic). There are other provinces with much worse records and many with better.

The point is that 99,996 of every 100,000 people find it convenient and enjoy much better service.


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## MannyP Design (Jun 8, 2000)

screature said:


> What does that have to do with the privatization of liquor sales?
> 
> That is the individual's responsibility not the government's.
> 
> Next you'll be saying the best way to deal with DUI is the return of prohibition.


Apparently MacDoc is of the belief that having more places to purchase alcohol will somehow increase the probability of people driving under the influence...

... just like the proliferation of cellphone-related car accidents. :lmao:


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## Sonal (Oct 2, 2003)

MacDoc said:


> and have lots of DUI's


From the link I posted below:



> Consumption Rates - It is often assumed that beverage alcohol consumption increases as day-to-day operational involvement by government decreases. Grant Thornton's interjurisdictional comparison of consumption rates suggests that the actual reality is more complicated.
> 
> For example, Nova Scotia has about the same consumption rates as Ontario and British Columbia, even through it has a greater government ownership and operational presence in the marketplace. In Alberta, the privatization of retail beverage alcohol sales does not seem to have resulted in significantly higher overall per capita consumption rates than in the other Canadian jurisdictions reviewed (see Figure 3).
> 
> The overall data led us to believe that there is no conclusive link between consumption patterns and the type of control system in place. A variety of control systems have proven effective in maintaining social responsibility.


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## mrjimmy (Nov 8, 2003)

Sorry the entire article is copied here but it was grabbed from a Google cache.

From:Straight Goods - Demon Rum and the Perils of Privatization - Within a year 200 red brick <b style="color:black;background-color:#ff66ff">Alberta</b> government <b style="color:white;background-color:#00aa00">liquor</b> <b style="color:white;backgroun



> *Demon Rum and the Perils of Privatization
> 
> Within a year 200 red brick Alberta government liquor stores were gone, replaced by nearly a thousand private stores, some large, many small, some clean, far too many run down and seedy
> *
> ...


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## hayesk (Mar 5, 2000)

SINC said:


> Privatization of liquor stores in Alberta has been great for consumers. When we had but two stores in our city, every holiday weekend and especially over Christmas and New Years, one was met with long lines and very crowded conditions.
> 
> Now that we have 16 liquor stores, one can shop in comfort, take advantage of sale prices and buy wine beer and spirits all in one place. The beer and wine is chilled too! The same in Ontario would likely be welcomed.


You could have all of that with a crown corporation. In Ottawa, we don't have a problem with lineups, store locations, etc.

And we have variety. With privatization, there's nothing to stop stores from only stocking the most popular products, instead of the best ones. When you privatize, profit is the only driver. When it's a crown corporation, they still strive to deliver a variety of products - profit is a driver but not the only driver.


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## Dr.G. (Aug 4, 2001)

SINC said:


> Like any province, some people abuse alcohol and about 4 in every 100,000 do so in Alberta (hardly an epidemic). There are other provinces with much worse records and many with better.
> 
> The point is that 999,996 of every 100,000 people find it convenient and enjoy much better service.


Sinc, I assume you meant 99,996 out of 100,000 people. Still, with Alberta's current population of 3.5 million, that would mean only about 140 people abuse alcohol. If those figures are accurate, I can't see how any province could have a lower rate. I know that NL has a problem with certain age groups abusing alcohol, and I think that our estimated percentage is 1-2%, which would mean 5,250 to 10,500 people here in NL abuse alcohol.


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## Macfury (Feb 3, 2006)

When I go to the U.S. I'm stunned by the wide variety of choices open to them in private liquor stores. Also, the prices are considerable better. In Ontario, the vintages in which I'm nost interested simply disappear because some bureaucrat decided to change the order list.

We already have private beer sales in Ontario (though not much choice in where we buy it) but this hasn't been fingered as a major cause of DUI.


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## screature (May 14, 2007)

Macfury said:


> When I go to the U.S. I'm stunned by the wide variety of choices open to them in private liquor stores. *Also, the prices are considerable better. *


I have seen that variety too but from my experience that is more true of US wines/products, not international wines/products. 

Also the reason for the price differential has to do with duties we pay on US products and taxes that we apply within our jurisdiction.


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## BigDL (Apr 16, 2003)

Dr.G. said:


> Sinc, I assume you meant 99,996 out of 100,000 people. Still, with Alberta's current population of 3.5 million, that would mean only about 140 people abuse alcohol. If those figures are accurate, I can't see how any province could have a lower rate. I know that NL has a problem with certain age groups abusing alcohol, and I think that our estimated percentage is 1-2%, which would mean 5,250 to 10,500 people here in NL abuse alcohol.


I guess the measure of abuse in Alberta is calculated on a basis of only those individual consuming alcohol who don't pass out before reaching the legal definition of abuse.


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## Macfury (Feb 3, 2006)

screature said:


> Also the reason for the price differential has to do with duties we pay on US products and taxes that we apply within our jurisdiction.


Selection varies from store to store, but I understand that the price is often the result of Canadian taxes and regulation. I was shocked recently to see milk selling for 88 cents per litre in Western New York, and Canadian maple syrup selling for less than the price in Ontario.


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## screature (May 14, 2007)

BigDL said:


> I guess the measure of abuse in Alberta is calculated on a basis of only those individual consuming alcohol who don't pass out before reaching the legal definition of abuse.


 What a bunch of nonsense.


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## SINC (Feb 16, 2001)

Dr.G. said:


> Sinc, I assume you meant 99,996 out of 100,000 people. Still, with Alberta's current population of 3.5 million, that would mean only about 140 people abuse alcohol. If those figures are accurate, I can't see how any province could have a lower rate. I know that NL has a problem with certain age groups abusing alcohol, and I think that our estimated percentage is 1-2%, which would mean 5,250 to 10,500 people here in NL abuse alcohol.


Yeah I fixed the typo and the figures are from Stats Can for impaired driving only, not any other type of alcohol abuse. I apologize I should have made that clear, but I was responding to MacDoc's "DUI" post. Here are the Stats Can records with the impaired driving figures per 100,000 population at the bottom of each page:


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## screature (May 14, 2007)

Thanks for the data SINC but the data doesn't reflect favourably on Alberta where the cases of DUI are 3 times that of Ontario per 100,000. Hmmm.....


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## SINC (Feb 16, 2001)

screature said:


> Thanks for the data SINC but the data doesn't reflect favourably on Alberta where the cases of DUI are 3 times that of Ontario per 100,000. Hmmm.....


I admitted that in my original post if you read it again, but then again 4.6 in 100,000 is hardly an epidemic. Don't forget to factor in the rural areas of AB and SK where the rates are 50% higher again. Too far too drive to a liquor store and some will take a chance. It still has nothing to do with privatization. It is a personal decision and too many folks take chances, not just here, but everywhere. By and large the vast majority use the services responsibly.


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## SINC (Feb 16, 2001)

hayesk said:


> With privatization, there's nothing to stop stores from only stocking the most popular products, instead of the best ones. When you privatize, profit is the only driver. When it's a crown corporation, they still strive to deliver a variety of products - profit is a driver but not the only driver.


That would be why Alberta has some very high end liquor and wine stores that stock exotics the government never stocked.


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## screature (May 14, 2007)

SINC said:


> I admitted that in my original post if you read it again, but then again 4.6 in 100,000 is hardly an epidemic. Don't forget to factor in the rural areas of AB and SK where the rates are 50% higher again. Too far too drive to a liquor store and some will take a chance. It still has nothing to do with privatization. It is a personal decision and too many folks take chances, not just here, but everywhere. By and large the vast majority use the services responsibly.


It is very interesting to see the data. In fact AB has the highest rate of DUI in Canada. Whether or not this has anything to do with privatization is debatable. 

I still believe that incidents of DUI are an individual's responsibility and not the Government's, but the data is interesting and may be reflective of other factors. PEI is not far behind and they do not have the same regime as Alberta... There is obviously much more to consider here than meets the eye. Further study is indicated I believe.


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## FeXL (Jan 2, 2004)

hayesk said:


> And we have variety. With privatization, there's nothing to stop stores from only stocking the most popular products, instead of the best ones. When you privatize, profit is the only driver. When it's a crown corporation, they still strive to deliver a variety of products - profit is a driver but not the only driver.


There are small stores, maybe 200-300 sq ft of retail space, that operate on stocking only the most popular products. I can think of two or three like that in Lethbridge.

At the other end of the scale are those, like my local fav, that will bring in new product if you ask them to. In the last year alone the owner has brought in 3 different brands of beer and a new brand of bourbon on my request. Customer service like that was never available when the ALCB was running the stores.


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## Macfury (Feb 3, 2006)

I don't understand what DUI has to do with where the liquor is purchased. Would an LCBO follow a customer to his/her car to ensure they weren't entering the car with liquor purchases while inebriated?


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## used to be jwoodget (Aug 22, 2002)

It is simply an issue of what to do with the $24 billion debt. We can barely "afford" it with the current low interest rates and unless this hole is dug out of quickly, it will mean huge debt service charges. So what do you do if you are in government in Ontario and there's a fixed election in 2011? Raise taxes (HST doesn't count as it will not, per se, bring the government of Ontario much more revenue), cut services (health, education, etc. risking strikes and unemployment), borrow more (and effect a downgrade on the credit rating, hence increasing money borrowing costs) or sell assets? It's obvious what they'll do and I expect the Federal Conservatives will do the same.

This short term solution is, in turn, the result of the previous short term solution. At least we'll get to see the outcome of this one. It's impossible to know whether the stimulus spending had any meaningful effect aside from keeping GM and Chrysler plants open a few more months.


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## Adrian. (Nov 28, 2007)

Libertarian arguments are probably the most convincing I have ever heard. Seriously, guys...


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## SINC (Feb 16, 2001)

screature said:


> It is very interesting to see the data. In fact AB has the highest rate of DUI in Canada. Whether or not this has anything to do with privatization is debatable.
> 
> I still believe that incidents of DUI are an individual's responsibility and not the Government's, but the data is interesting and may be reflective of other factors. PEI is not far behind and they do not have the same regime as Alberta... There is obviously much more to consider here than meets the eye. Further study is indicated I believe.


Better look at SK who are fifty percent higher with govt. stores


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## screature (May 14, 2007)

SINC said:


> Better look at SK who are fifty percent higher with govt. stores


Yep, my bad, somehow I missed that ... Sorry.


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## screature (May 14, 2007)

So strictly speaking there seems to be no direct correlation between privatization and rates of DUI... not that I am surprised, but my miss reading of the data was beginning to make me wonder...


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## Sonal (Oct 2, 2003)

Macfury said:


> I don't understand what DUI has to do with where the liquor is purchased. Would an LCBO follow a customer to his/her car to ensure they weren't entering the car with liquor purchases while inebriated?


By law, the LCBO cannot sell you liquor if you are already intoxicated. How much this is enforced, however, is another question, and that doesn't stop someone from walking into the store, sober, buying alcohol and then chugging in and driving. 

But you could still privatize and have the same legal requirement--the Beer Store is private (though it's not exactly a shining example of the benefits of a free market) and they are under the same restriction.


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## screature (May 14, 2007)

Adrian. said:


> Libertarian arguments are probably the most convincing I have ever heard. Seriously, guys...


Rather than being needless obtuse Adrian, why not just come straight out and say what you are saying... every response shouldn't require a trip to Wikipedia in order to decipher what you are saying...

Academia has it's merits but when speaking to the general public it has its pitfalls. Grade 9 eduction is the accepted grade level for universal communications... 

Roll your eyes in your condescending, self righteous, disdain if you must... but at least make a point that is debatable.  rolleyes: for emphasis and irony ).

BTW Libertarian arguments are no more or less convincing than strictly, socialist, communist, anarchist, capitalist, fascist or any other "ist" or "ism" doctrine you care to choose... Any ideal, has its inherent flaws and merits. Real world application of those ideals and compromise, now that is where things begin to get interesting and difficult.


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## Sonal (Oct 2, 2003)

screature said:


> I have seen that variety too but from my experience that is more true of US wines/products, not international wines/products.
> 
> Also the reason for the price differential has to do with duties we pay on US products and taxes that we apply within our jurisdiction.


I don't know... Yellowtail Shiraz is what, $12 in Ontario, and I see it $6 in the US. It's an Australian wine, so both the US and Canada are paying duty on it. But twice the price? 

They have wine for $2-$3 in the US. I have never seen a wine for less than $7-$8 here. 

My understanding is that it's more our taxes on liquor than it is duty.


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## screature (May 14, 2007)

Sonal said:


> I don't know... Yellowtail Shiraz is what, $12 in Ontario, and I see it $6 in the US. It's an Australian wine, so both the US and Canada are paying duty on it. But twice the price?
> 
> They have wine for $2-$3 in the US. I have never seen a wine for less than $7-$8 here.
> 
> My understanding is that it's more our taxes on liquor than it is duty.


We aren't arguing here... it is *both* taxes and duty...  

But I I haven't personally seen that price differential on international wines... (using Vermont pricing as my point of reference.) Then again being that liquor sales in the US are private, who really knows what the individual merchants pricing structure is... they could use certain products as loss leaders just to get customers into their store...


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## Amiga2000HD (Jan 23, 2007)

The Ontario government needs to think hard about these two points and keep their implications in mind if they decide to sell/long term lease out any Crown assets:

1) An asset can only be sold once.
2) Once sold, you no longer retain ownership of that asset.


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## kps (May 4, 2003)

The LCBO is probably one of the best examples of a successful *for profit* public company anywhere on this planet with 80 years of experience in importing and distributing liquors and wine. Privatizing it and selling off its assets would be a huge disservice to Ontario taxpayers in terms of revenue generated, social responsibility and quality control. The province generates 1.4b/yr in revenue from the LCBO. I know that includes the taxes (which they would retain), but there is additional profit in the retail channel.

IMO, if they privatize the LCBO, then they have to get rid of Brewers Retail and allow the sale of beer and wine in grocery stores, variety stores and gas stations. 

There is absolutely no mention as to the model McGuinty intends to use to privatize the corporation. Apparently it's worth 10b, but is he planning to sell everything to one entity or split up the importation/distribution/retail channels among multiple licensees? I mean really, who's got 10b sitting in a bank? (Aside from Apple)

In the past, there were reports suggesting that qualified entities would be *licensed* to import and distribute liquor for a set period of time, after which they would have to re-bid on the license. Will have to see how it goes down. 

It is fair to say that only large corporations would be successful in obtaining licenses to import and distribute liquor. Perhaps several entities would be licensed, all of which would have to take on the existing union labour in the distribution channel. Do any of you really think that all those LCBO workers are going to be thrown out on the street?Conditionally, they may be forced to take on existing retail leases currently in the LCBO's inventory. Result... increased prices, smaller selection.

At the retail level, small mom&pop operations would probably not fair well considering delivery costs, handling of returns (remember, no more dumping your empty beer, wine, rye and vodka bottles at Brewers Retail).

My final thought...McGuinty is an idiot for even considering this!


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## eMacMan (Nov 27, 2006)

SINC said:


> Privatization of liquor stores in Alberta has been great for consumers. When we had but two stores in our city, every holiday weekend and especially over Christmas and New Years, one was met with long lines and very crowded conditions.
> 
> Now that we have 16 liquor stores, one can shop in comfort, take advantage of sale prices and buy wine beer and spirits all in one place. The beer and wine is chilled too! The same in Ontario would likely be welcomed.
> 
> ...


Of course all of my favourites disappeared from stock and everything else went up in price as the AB government increased liquor taxes to compensate for the lost revenue.beejacon


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## Sonal (Oct 2, 2003)

Amiga2000HD said:


> The Ontario government needs to think hard about these two points and keep their implications in mind if they decide to sell/long term lease out any Crown assets:
> 
> 1) An asset can only be sold once.
> 2) Once sold, you no longer retain ownership of that asset.


For the LCBO, it's been argued that the Ontario government could make more money over the long-term by privatizing the sales and distribution but maintaining government control over regulations, licensing and fees. 

Privatization may not be the right idea for all Crown Corporations, but there are some interesting arguments for privatizing the LCBO.


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## eMacMan (Nov 27, 2006)

In Alberta privatizing power led to huge increases in electric and gas bills. Even in winter the gouge fees often exceed the cost of the energy.


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## kps (May 4, 2003)

Sonal said:


> Privatization may not be the right idea for all Crown Corporations, but there are some interesting arguments for privatizing the LCBO.


IMO, the only Crown Corporations ripe for privatization are those not generating revenue but costing the taxpayers money. The LCBO is not one of them.


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## Macfury (Feb 3, 2006)

kps said:


> IMO, the only Crown Corporations ripe for privatization are those not generating revenue but costing the taxpayers money. The LCBO is not one of them.


Why not take over the pizza industry as well? Ontario could make lots of money for its citizens.


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## Sonal (Oct 2, 2003)

kps said:


> IMO, the only Crown Corporations ripe for privatization are those not generating revenue but costing the taxpayers money. The LCBO is not one of them.


Who wants to a buy a worthless asset? In my experience, there are a lot more buyers for a profitable business than one that is not currently making money, which drives the price up.

It does depend on how they do this--there have been models put forth that under which we could possibly generate MORE revenue for Ontario. That I support. But if it is a situation where we are privatizing and losing future revenue, then I am not really a fan.


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## kps (May 4, 2003)

Sonal said:


> Who wants to a buy a worthless asset? In my experience, there are a lot more buyers for a profitable business than one that is not currently making money, which drives the price up.
> 
> It does depend on how they do this--there have been models put forth that under which we could possibly generate MORE revenue for Ontario. That I support. But if it is a situation where we are privatizing and losing future revenue, then I am not really a fan.


I never said worthless, I said those that cost taxpayers money due to stupidity and mismanagement. I think we may have some of those. LOL

In the hands of the proper investor, they will no doubt turn thing around without screwing the tax payer, but historically, that has never been the case in such ventures.

Do you really trust our current government to chose the correct model?


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## kps (May 4, 2003)

Macfury said:


> Why not take over the pizza industry as well? Ontario could make lots of money for its citizens.


Pizza isn't a controlled commodity, liquor is.


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## Max (Sep 26, 2002)

It's becoming increasingly clear to me that pizza ought to be a controlled commodity. The dang stuff simply wrecks lives.


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## chasMac (Jul 29, 2008)

Max said:


> It's becoming increasingly clear to me that pizza ought to be a controlled commodity. The dang stuff simply wrecks lives.


That habit has nearly bankrupted me; and caused me to do a lot of things I regret.


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## Macfury (Feb 3, 2006)

Max said:


> It's becoming increasingly clear to me that pizza ought to be a controlled commodity. The dang stuff simply wrecks lives.


The LCBO makes money is because it has a near monopoly on liquor sales. If the government had a monopoly on pizza, then pizza sales would be very profitable.

Remember: "Friends don't let friends eat when they're already full."


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## Max (Sep 26, 2002)

I don't disagree that the gov makes money on booze because it's pretty near the only game in town.

But I'm cool with it making money. It's infinitley better than loosing it, yes?

On the other hand, I dig it whenever I'm in Quebec that I can go into a corner store and come out with a bottle of wine or a nice six pack of beer. I find it refreshingly civilized. I don't think it's a recipe for disaster myself. It still comes down to individual choices and individuals being responsible for their actions - including their boozing and their driving while under the influence.

In conclusion, I could go either way on privatizing the LLBO.


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## Macfury (Feb 3, 2006)

Max said:


> I don't disagree that the gov makes money on booze because it's pretty near the only game in town.
> 
> But I'm cool with it making money. It's infinitley better than loosing it, yes?


Sure, but when the only money it makes is the excess it charges you for spirits...


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## Sonal (Oct 2, 2003)

kps said:


> I never said worthless, I said those that cost taxpayers money due to stupidity and mismanagement. I think we may have some of those. LOL
> 
> In the hands of the proper investor, they will no doubt turn thing around without screwing the tax payer, but historically, that has never been the case in such ventures.


Yes, but any investor savvy enough to take a failing business (even if it is failing due to mismanagement) and turn it around successfully is going to be savvy enough to bargain down the price based on the fact that it's not profitable... and they will probably be able to do that fairly easily, because there aren't as many buyers for failing businesses. 

Happens with apartment buildings frequently. (I know the world is not an apartment building, but it makes for easy comparisons.) A profitable, well-run building attracts many buyers and sells at a premium. A poorly managed building that isn't making much money attracts no buyers and sells at a deficit. These could be neighbouring buildings that you'd think should be valued the same less the cost of repairs, but it doesn't seem to work that way.



kps said:


> Do you really trust our current government to chose the correct model?


No, but stranger things have happened... :lmao:


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## Max (Sep 26, 2002)

Macfury said:


> Sure, but when the only money it makes is the excess it charges you for spirits...


 
Get your point there. Yeah, it's expensive stuff and it need not be so. 

Perhaps things will change yet again, quite possibly for the better. Remember the good old days? I recall being a teenager lining up at the liquor store on Spadina, having to fill out a little piece of paper with a stub of a pencil... give it to the five hundred year old grizzled gent behind the counter and wait for him to go through the back doors to the enigmatic space beyond where they kept all of the booze. It was positively Soviet! 

Today's world looks almost appealing.


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## Macfury (Feb 3, 2006)

Max said:


> I recall being a teenager lining up at the liquor store on Spadina, having to fill out a little piece of paper with a stub of a pencil... give it to the five hundred year old grizzled gent behind the counter and wait for him to go through the back doors to the enigmatic space beyond where they kept all of the booze. It was positively Soviet!


I was late to the game, but I remember seeing this. The grizzled guy behind the counter at Spadina was probably friends with that old guy who used to work at Grossman's.


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## SINC (Feb 16, 2001)

Max said:


> I dig it whenever I'm in Quebec that I can go into a corner store and come out with a bottle of wine or a nice six pack of beer. I find it refreshingly civilized. I don't think it's a recipe for disaster myself. It still comes down to individual choices and individuals being responsible for their actions - including their boozing and their driving while under the influence.


Welcome to the new Alberta. Civilized and all.


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## ehMax (Feb 17, 2000)

Dalton is a liar. 

I think sale of LCBO would be a *HUGE* mistake. How much money does the LCBO currently make?



> In fiscal 2008-09, we delivered our 15th record dividend – $1.40 billion – to the provincial government. This figure, which does not include taxes, was $55 million (four per cent higher) than the previous year. Our net sales were also a record at $4.27 billion, 4.9 per cent higher than the year before.
> 
> The provincial, federal and municipal governments also received $848 million in taxes, import duties and payments to municipalities.


*Source*

The stores are clean, classy, staff well trained, there is a HUGE selection. There are 4 LCBO stores within easy driving distance of me. 



















The sale would be short term gain for long term loss and a horrible band-aid to make up for errors. 

Dalton is a liar:


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## SINC (Feb 16, 2001)

There are three liquor stores within easy walking distance of my home and 13 more within easy driving distance in our city of 60,000. (One end to the other of the city is four km.)

My favourite beer is $25.40 for 24 cans including tax and deposit. What's yours?


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## ehMax (Feb 17, 2000)

SINC said:


> There are three liquor stores within easy walking distance of my home and 13 more within easy driving distance in our city of 60,000. (One end to the other of the city is four km.)
> 
> My favourite beer is $25.40 for 24 cans including tax and deposit. What's yours?


About the same price. Tons of buck a beer options. 

Cheap booze on every street corner isn't really a bonus to me, but I'm sure alcoholics love it. 

What my main point is, the LCBO brings in tons of revenue every year. Why get rid of the hen, when its laying several golden eggs every year.


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## Macfury (Feb 3, 2006)

ehMax said:


> What my main point is, the LCBO brings in tons of revenue every year. Why get rid of the hen, when its laying several golden eggs every year.


Because the hen is eating too damned many of my silver seeds to produce those golden eggs.


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## ehMax (Feb 17, 2000)

Macfury said:


> Because the hen is eating too damned many of my silver seeds to produce those golden eggs.


What do you mean?


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## SINC (Feb 16, 2001)

ehMax said:


> What my main point is, the LCBO brings in tons of revenue every year. Why get rid of the hen, when its laying several golden eggs every year.


The point you are missing is that the Alberta Liquor And Gaming Commission still strictly controls the distribution of all booze to all private stores. It also still sets the price those stores pay them for the product.

And since selling off all their stores and getting rid of all the high priced union help it took to run them, them are far MORE profitable than they ever were, thus the provincial treasury is way better off.

But so is the public in convenience of shopping and location and store numbers and competition with price cuts from competing stores.

It also gives many small business owners a chance to make a living from liquor sales in business for themselves.


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## Macfury (Feb 3, 2006)

It earns its profits only by charging me for the products I am forced to buy from them. Why should the government profit at our expense when it could sell the liquor at cost, and return its $1.4 billion profit to taxpayers?

If the LCBO business model makes sense, than why not have government take over all gas stations and become the sole agent for gasoline sales? It could potentially make billions of dollars by eliminating competition in the price of gasoline and putting that money into general revenue.


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## ehMax (Feb 17, 2000)

SINC said:


> And since selling off all their stores and getting rid of all the high priced union help it took to run them, them are far MORE profitable than they ever were, thus the provincial treasury is way better off.


Is this truly the case? I don't know, my hunch is that there would be a loss of revenue from liquor sales. 

It would take a lot to convince me that selling the LCBO would be a good idea. It's proven to bring in A LOT of revenue and I still think any short term gain of sale would be at a loss to long term revenue. We are also talking about alcohol which involves very real, social implications of alcoholism and drinking and driving. I like the way it is controlled now by the LCBO. I don't want cheap booze available at every street corner in my city.


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## MacDoc (Nov 3, 2001)

Your views are shared by me and 2/3s of the rest of Ontario.

McGuinty is an idiot.


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## Macfury (Feb 3, 2006)

MacDoc said:


> McGuinty is an idiot.


On this we agree, at least in a general sense.


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## kps (May 4, 2003)

Macfury said:


> The LCBO makes money is because it has a near monopoly on liquor sales. If the government had a monopoly on pizza, then pizza sales would be very profitable.
> 
> Remember: "Friends don't let friends eat when they're already full."


So let's sell the LCBO to a private monopoly, because that is exactly what would happen...except that much of revenue would not go back into the public purse.

The money is in the importation and distribution, not retail...even Al Capone knew that.


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## kps (May 4, 2003)

Macfury said:


> It earns its profits only by charging me for the products I am forced to buy from them. Why should the government profit at our expense when it could sell the liquor at cost, and return its $1.4 billion profit to taxpayers?


Because the LCBO is a for-profit enterprise owned by the Province of Ontario. Liquor is not a big stretch from buying other controlled substances and products which are a voluntary form of taxation.. cigarettes and lottery tickets come to mind. Liquor, tobacco and gambling were always controlled and a huge money maker for governments. OLG on the other hand, would probably be a better choice.



> If the LCBO business model makes sense, than why not have government take over all gas stations and become the sole agent for gasoline sales? It could potentially make billions of dollars by eliminating competition in the price of gasoline and putting that money into general revenue.


Because the infrastructure is in place and has been for 80 years. Plus see above.^^^


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## kps (May 4, 2003)

Sonal said:


> Yes, but any investor savvy enough to take a failing business (even if it is failing due to mismanagement) and turn it around successfully is going to be savvy enough to bargain down the price based on the fact that it's not profitable... and they will probably be able to do that fairly easily, because there aren't as many buyers for failing businesses.
> 
> Happens with apartment buildings frequently. (I know the world is not an apartment building, but it makes for easy comparisons.) A profitable, well-run building attracts many buyers and sells at a premium. A poorly managed building that isn't making much money attracts no buyers and sells at a deficit. These could be neighbouring buildings that you'd think should be valued the same less the cost of repairs, but it doesn't seem to work that way.


Except we're not talking about buildings but Crown Corporations which usually have a monopoly in whatever the enterprise (power generation anyone?) happens to be. They are run by government bureaucrats without accountability who couldn't run a hot dog stand. The LCBO is perhaps the only exception in the whole country.


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## Ottawaman (Jan 16, 2005)

> Financial Performance
> 
> $4.27 billion LCBO's net sales and other income in 2008-09
> $1.40 billion Dividend the LCBO transferred to the Government of Ontario for 2008-09 (excluding taxes)
> ...


LCBO | Media Centre


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## imachungry (Sep 19, 2004)

Max said:


> I don't disagree that the gov makes money on booze because it's pretty near the only game in town.
> 
> But I'm cool with it making money. It's infinitley better than loosing it, yes?
> 
> On the other hand, I dig it whenever I'm in Quebec that I can go into a corner store and come out with a bottle of wine or a nice six pack of beer. I find it refreshingly civilized. I don't think it's a recipe for disaster myself. It still comes down to individual choices and individuals being responsible for their actions - including their boozing and their driving while under the influence.


Hey we agree! Let's have a drink and go for a ride! 

The LCBO is a joke--if you're a consumer. If you're a taxpayer, you love it. As a serious wine person, I find it hilarious--seriously hilarious--when people say it's not a big deal to have the government control alcohol. It's a big ****ing deal. Consumer choice is reduced, prices are higher, and the parochialism of Protestant Upper Canada is in place. What you see in the store is a mere fraction of the good stuff from around the world, and corruption in the LCBO has and always will reach to the highest level. 

Consumers have no clue. But I do, because I worked on a project with the LCBO for a year, and my eyes were wide open at the end. With those huge profits and huge buying power comes massive kickbacks, corruption and a system that favours profits over everything else. The consumer is considered last, the taxpayer second, and the higher ups first. 

I could go on for days. In the end, McGuinty is flagpolling to see who shows up to make offers. I would LOVE LOVE LOVE for the LCBO to be privatized. I'm also aware most people couldn't care less about the stupidity of a "LIQUOR CONTROL BOARD" in 2009.

But don't kid yourself: the massive profits come at a massive price.


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## Ottawaman (Jan 16, 2005)

Enough LCBO talk. Ontario Power Generation and Hydro One are bigger fish to fry.




> The Liberal government of Premier Dalton McGuinty recently hired two banks with experience in privatizations, CIBC World Markets Inc. and Goldman Sachs Group Inc., and charged them with writing a blueprint for possible privatization of agencies, investment banking sources said. The sale candidates include icons such as Hydro One Inc., the Ontario Lottery and Gaming Corp., the Liquor Control Board of Ontario and Ontario Power Generation, said the bankers, who asked to remain anonymous because the talks with the government are private.


Ontario ponders sale of Crown corporations to beat down deficit - The Globe and Mail


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## Max (Sep 26, 2002)

Look, if it's beer and hard liquor we're talking about, it's darned serious stuff. Electricity be damned... the drink must flow freely if rioting is to be avoided.

____________________________

I don't know how I feel about all this privatization stuff. Since gov is epic at screwing things up, I have a feeling they'd screw privatization up too, ending up costing taxpayers just as bloody much, albeit in some different accounting column.


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## Ottawaman (Jan 16, 2005)

Max said:


> Look, if it's beer and hard liquor we're talking about, it's darned serious stuff. Electricity be damned... the drink must flow freely if rioting is to be avoided.
> 
> ____________________________
> 
> I don't know how I feel about all this privatization stuff. Since gov is epic at screwing things up, I have a feeling they'd screw privatization up too, ending up costing taxpayers just as bloody much, albeit in some different accounting column.


LOL, so true. When the private for profit hydro providers spike the prices to the point that the average user can no longer pay we will require quality alcohol to numb our senses. 



> The LCBO made $1.4-billion in profit in 2008, almost all of which was handed over to the government in the form of dividends, and it has seen its profit rise for 15 straight years.
> 
> The OLGC put $1.7 billion into provincial coffers last year.
> ------------------
> ...


Community - The Globe and Mail


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## eMacMan (Nov 27, 2006)

Selling or privatizing any profitable Provincial asset makes no sense in an era when the value of those assets are diminished by a weak overall economy. Smells like a buddy with a hand in the provincial coffers.


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## Max (Sep 26, 2002)

My thinking exactly. A bit of the old cronyism, threatening to rear its ugly head.

On the other hand, the provincial coffers are probably empty... what with typical government largesse, corruption, chronic entitlement disease and all - and so the bean-counter cadre must be exerting pressure on squirming pols to do something about it.


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## Vandave (Feb 26, 2005)

SINC said:


> Like any province, some people abuse alcohol and about 4 in every 100,000 do so in Alberta (hardly an epidemic). There are other provinces with much worse records and many with better.


But Alberta should be higher due to demographics. Alberta is the youngest or one of the youngest Provinces. 

In any case, private liquor stores doesn't enter into it.


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## kps (May 4, 2003)

imachungry said:


> Hey we agree! Let's have a drink and go for a ride!
> 
> The LCBO is a joke--if you're a consumer. If you're a taxpayer, you love it. As a serious wine person, I find it hilarious--seriously hilarious--when people say it's not a big deal to have the government control alcohol. It's a big ****ing deal. Consumer choice is reduced, prices are higher, and the parochialism of Protestant Upper Canada is in place. What you see in the store is a mere fraction of the good stuff from around the world, and corruption in the LCBO has and always will reach to the highest level.


Do you really think it'll be any different when it's a private _monopoly_? I'll say it'll be worse as far as selection and you'll pay through the nose for a custom order. How many SKUs does the LCBO carry now, how many more do you think they could sustain and remain profitable? No one can carry the whole world's selection, and a private enterprise will carry *only* the best sellers. Good luck!



> Consumers have no clue. But I do, because I worked on a project with the LCBO for a year, and my eyes were wide open at the end. With those huge profits and huge buying power comes massive kickbacks, corruption and a system that favours profits over everything else. The consumer is considered last, the taxpayer second, and the higher ups first.


Again, do you really think the kickbacks, corruption and profits will disappear when the LCBO is privatized? LOL, you're dream'n!


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## Macfury (Feb 3, 2006)

I wouldn't support a private monopoly.


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## kps (May 4, 2003)

Macfury said:


> I wouldn't support a private monopoly.


Do you think anyone is going to give McGuinty 10b for the LCBO without it?


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## Ottawaman (Jan 16, 2005)

kps said:


> Do you think anyone is going to give McGuinty 10b for the LCBO without it?


I'd expect more fore something that averages 1.09 a year in profits.


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## kps (May 4, 2003)

Ottawaman said:


> I'd expect more fore something that averages 1.09 a year in profits.


The 10b figure has been tossed around as the asking price. 

I'm tapped out as far as taxes, I can't give no mo'.


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## Ottawaman (Jan 16, 2005)

So selling the profitable parts of the revenue generating system is going to make your taxes go down?


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## kps (May 4, 2003)

Huh?

Have you been following this thread or just posting blind?


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## Ottawaman (Jan 16, 2005)

kps said:


> Huh?
> 
> Have you been following this thread or just posting blind?


I might ask you the same question. 

For example.


> The LCBO is probably one of the best examples of a successful for profit public company anywhere on this planet with 80 years of experience in importing and distributing liquors and wine. Privatizing it and selling off its assets would be a huge disservice to Ontario taxpayers in terms of revenue generated, social responsibility and quality control. The province generates 1.4b/yr in revenue from the LCBO. I know that includes the taxes (which they would retain), but there is additional profit in the retail channel.


See the relevance?


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## Macfury (Feb 3, 2006)

kps said:


> The 10b figure has been tossed around as the asking price.


They'd need to break it in two and have the rival liquor gangs fight it out.


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## kps (May 4, 2003)

Ottawaman said:


> See the relevance?


I still don't follow what taxes you are talking about, liquor, gasoline, income, sales?

Fat chance of any taxes going down, whether they sell anything or not.


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## Ottawaman (Jan 16, 2005)

> Reminded of his past opposition to the 1999 sale of Highway 407 for $3.1 billion as a "fire sale," McGuinty replied: "Did I say that?"
> 
> In fact, he criticized the sale in May 2003, saying: "The Harris-Eves government sold the 407 at a fire sale price. Not only did they sell out taxpayers who owned the highway, they sold out 407 users."
> 
> ...


Liberals ripped for 'fire sale' plan


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## Macfury (Feb 3, 2006)

If government running the LCBO is such a good idea for revenue, why doesn't the LCBO just double the price of liquor? That would solve the deficit in a hurry.


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## Max (Sep 26, 2002)

kps said:


> Do you really think it'll be any different when it's a private _monopoly_? I'll say it'll be worse as far as selection and you'll pay through the nose for a custom order. How many SKUs does the LCBO carry now, how many more do you think they could sustain and remain profitable? No one can carry the whole world's selection, and a private enterprise will carry *only* the best sellers. Good luck!


I'm afraid that's exactly what would happen. Private outlets which only stock the best-selling SKUs and charge the customer punitive money for special orders... orders which need not be considered special under the current system.

In that light, paying a percentage more for booze in stores that are well-stocked and cater to a wide variety of palates and prices doesn't seem so bad after all.

But I also suspect that whoever would be willing to pony up the bread to buy out the LCBO will also be seeking to secure guarantees that they'll be pretty much the only player in town. Monopoly A sells out to Monopoly B.


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## screature (May 14, 2007)

Max said:


> But I also suspect that whoever would be willing to pony up the bread to buy out the LCBO will also be seeking to secure guarantees that they'll be pretty much the only player in town. Monopoly A sells out to Monopoly B.


Yes Max, that is what it would be I am afraid and quite frankly I would prefer it to remain a state monopoly, at least then the province then seems more benefit from a monopoly controlling liquor sales.


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## kps (May 4, 2003)

Macfury said:


> If government running the LCBO is such a good idea for revenue, why doesn't the LCBO just double the price of liquor? That would solve the deficit in a hurry.


Better still, perhaps the LCBO should become the retail pot outlet and change its name to the L&MCBO. That pesky deficit would be cleaned up in 6 months.


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## kps (May 4, 2003)

Macfury said:


> They'd need to break it in two and have the rival liquor gangs fight it out.


Oh, like the cable companies. 

As a side note, didn't Rogers try to buy Cogeco?

There was a privatization report floating around a few years ago which suggested licensing several distributors for a set period of time..something like 10 years.

Think about it, the successful bidder on this 10yr license will immediately start screwing with the prices in order to maximize the ROI and profits. The real battle would be at the retail level where big corporate retailers would duke it out with the "mom&pop" stores, but all the cards would be held by the distributors.


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## Max (Sep 26, 2002)

Screature and Kps, I think we three are in agreement. I think I prefer to keep the current arrangement. In the end, I have absolutely zero confidence that the provincial government wouldn't make a supreme hash out of privatizing it.

On the other hand, if they went with the idea of selling supreme hash, the ROI might pay off very nicely.


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## Lawrence (Mar 11, 2003)

I don't get it, Rather than sell the LCBO,
Why doesn't the Government just sell Liquor licenses to the private sector?

Then we could get Liquor/beer in the corner stores and the Government wouldn't be responsible.


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## Max (Sep 26, 2002)

One of the things about making it legal to sell in places like grocery and corner stores is that you would probably have a lot of variation in what's offered in each outlet. The many places in Quebec I've been to illustrate this... a small corner shop will stock only popular wines and beers because of tight space limitations, whereas a larger grocery store can stock more variety. You still need dedicated specialty stores for wine and beer lovers who want more than the popular, run of the mill stuff, although it should be noted that such institutions need not be government-run. But at least if you're Joe Sixpack who likes popular brands, you can stroll into a depanneur and come out with some beer.... something we can't do here in Ontario.

Sinc, what's it like in Alberta in this regard?

Reminds me... buddy of mine came back to Canada after 16 years abroad in various Western European countries and it struck him how odd it was that Ontario thought the call its beer outlets "The Beer Store." Not merely that it was pretty much the only game in town (that and the LCBO, natch), although that's part of it - but just the prosaic nature of the name. He just said that it really came home that he was back in Canada when he saw those stores.


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## SINC (Feb 16, 2001)

Max said:


> Sinc, what's it like in Alberta in this regard?


Our city of 60,000 just had its 18th liquor store open. They run from very tiny 600 square foot operations to really sophisticated 10,000 square foot operations. The things that they all have in common in terms of stock are cold beer and chilled wines, something the government stores never did. I only go to three of them and that is either because of the people who own them, or the specialty stock.

The smallest store in the city is owned by an east Indian couple who operate with a staff of one at the counter from 10:00 a.m. to 1:00 a.m. (All stores are self serve by the way, You just grab what you want and head for the check out counter.) The stores are very accommodating if you ask for something they don't stock. You can be sure a week later that item will be there for you, but what I notice is the smaller stores seem to cater to the neighbourhoods they serve. I still make the odd purchase in this small store because when I needed a special brand of beer for an event, he brought it in for me. That is service.

At the other end of the scale, the largest stores in town are quite different. Two of them, Real Canadian Superstore (Loblaws to you folks) carry a huge selection and deeply discount most stock. (This is the only store without any chilled wines or cold beer. All product is warm.) Without question this store and another like it owned by Sobey's grocery chain are the two busiest stores in town, often with long lineups at the four check out counters. They stock anything and everything. I should note that the booze is not sold in the grocery store itself. The law states that liquor sales in a grocery store must be in a free standing building, not attached or accessible from the grocery store, thus most are at opposite ends of the parking lot. The same goes for the sale of cigarettes and tobacco. It too cannot be sold inside a store that has a pharmacy, so kiosks in enlarged foyer areas are common.

The third large store is pretty chic and also owned by an east Indian couple. It is plush yet comfortable at the same time. It has a section in the middle of the store that is sunken and circular and is surrounded by shelves open to the back so stock can be pushed onto the shelves from the warehouse to the retail area. The rounded shelves take up three quarters of the circle and any high end booze you can think of are in this section. They have a huge walk in beer and wine cooler that has to be 20 x 50 feet with local and imported beer galore. The balance of the store is dedicated to wines by country and colour. A long shelf similar to supermarket rows with red on one side, white on the other and clearly labelled "France" or whatever on a sign above the shelving.

A special section is dedicated to sparkling wines and champagnes. They also sell gift bags, openers, cork screws and the like which are placed on row ends, again supermarket style. Their prices are higher than the grocery store outlets, but people seem willing to shop there for the pleasant atmosphere and easy of shopping due to the excellent layout.

Most of the rest of the stores are in neighbourhood strip malls and generally serve local cliental who enjoy not having to go downtown. Instead it is a nice walk form their homes.


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## Macfury (Feb 3, 2006)

dolawren said:


> I don't get it, Rather than sell the LCBO,
> Why doesn't the Government just sell Liquor licenses to the private sector?
> 
> Then we could get Liquor/beer in the corner stores and the Government wouldn't be responsible.


This is the best idea of all.

SINC: The idea of ordering in special product is the most appealing idea of all. I would say that 75% of the LCBO products I have really enjoyed are discontinued or simply "unavailable" for no reason that the staff can articulate.

Max: I would happily see corner stores selling popular brands and specialty stores offering niche products, even if the niche products were sold at only a few stores. As is, I have to go to the LCBO at Yonge and Summerhill to pick up certain products unavailable anywhere else in the city.


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## Max (Sep 26, 2002)

Macfury said:


> This is the best idea of all.
> 
> SINC: The idea of ordering in special product is the most appealing idea of all. I would say that 75% of the LCBO products I have really enjoyed are discontinued or simply "unavailable" for no reason that the staff can articulate.
> 
> Max: I would happily see corner stores selling popular brands and specialty stores offering niche products, even if the niche products were sold at only a few stores. As is, I have to go to the LCBO at Yonge and Summerhill to pick up certain products unavailable anywhere else in the city.


Similar situation here, MF. If I want something special it's off to the Queen's Quay location because it's a massive store and has the biggest selection in the centre core, at least down by the lake. Been a long time since I've been to the Summerville location.

In any case, I really can't see the problem with selling beer and wine out of corner stores. Not as if the sky is going to come down or anything.


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## ehMax (Feb 17, 2000)

Previous Tory Premier *has same thoughts as me*. 



> Former Conservative premier Ernie Eves says the cash-strapped Ontario government could have a hard time getting a decent price for the Liquor Control Board, an agency that generates billions in profits that the Liberals haven't ruled out selling.
> 
> Facing a $24.7-billion deficit, the largest in the province's history, the government has hired two banks to review assets such as Hydro One and the LBCO. The latter, which has 610 stores, turned over $1.4 billion in profit to the government last spring, the 15th straight record profit.
> 
> ...





> The Liberal's latest review of assets seems to mirror almost exactly what the Conservatives did in 2001-02, said Eves, who cautioned against unloading a revenue generating agency like the LCBO just to help trim the deficit.
> 
> *"There's nothing wrong with looking at your various options, but I don't think, as a general principle, you should be selling assets that produce a great deal of money just for dealing with an in-year deficit problem," he said.*
> 
> "The issue is: What are you going to do to control your spending in next year's budget?"


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