TORONTO – The Liquor Control Board of Ontario is losing
more than $73 million a year in sales and $16 million in profits by
allowing private “agency stores” to sell alcohol in small and mid-sized
Ontario communities, according to an independent consultant’s report
released today by the Ontario Public Service Employees Union. OPSEU
represents more than 6,000 unionized LCBO employees.
Replacing 60 to 90 agency stores with publicly-owned
LCBO outlets would mean an additional $250 million to $340 million in
net provincial government revenue over the next 10 years, the report
shows.
“The agency store program was started in the 1960s to
serve small northern communities that couldn’t support a real LCBO
outlet,” said OPSEU president Leah Casselman. “But in the last four
years the government and the LCBO have doubled the number of agency
stores. About two-thirds of the 199 agency stores are now in located in
southern Ontario and almost half are in communities that could easily
support a profitable LCBO store.”
Agency stores are private businesses that are licenced
to sell alcohol in grocery stores, convenience stores and other retail
outlets in communities approved by the provincial government. In May
2006, the McGuinty government announced plans to open another 20 agency
stores, all in southern Ontario.
There are 89 agency stores with annual sales between
$575,000 and $3.3 million that could each be replaced with real LCBO
outlets while generating increased public revenue, the study found.
“In addition to costing the province millions in lost
revenue each year, these private agency stores are short-changing local
communities,” says Jo Ann Fisher, chair of OPSEU’s Liquor Board
Employees Division. “Real LCBO stores provide better service and
selection. They reduce the risk of illegal sales to minors and
intoxicated customers. They also provide a bigger boost to the local
economy.”
Opening new LCBO outlets would inject an average of
$142,000 a year into the local economy of each community in wages, rent,
property taxes and other expenditures, plus another $280,000 to $420,000
in spin-off economic activity, according to the report.
The study LCBO Agency Store Repatriation: A Financial
Analysis was prepared by independent business consultant Russ
Christianson based on agency stores sales data provided by the LCBO.
Christianson has 25 years’ experience in the retail distribution sector
and is president of Rhythm Communications.
