The workers at the Liquor Control Board of Ontario (LCBO) have voted to accept a deal and end the strike action that began on 5 July.
An agreement between union officials and the LCBO has addressed demands for increased benefits and pay, as well as grievances related to plans to ease local government restrictions on the sale of alcohol.
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What is the LCBO?
Canada has 13 authorities across its ten provinces and three territories tasked with regulating alcohol sales and distribution, of which LCBO is one.
The LCBO has 669 retail stores in the province of Ontario. It is also the wholesale supplier for on-trade and hospitality venues.
For the financial year ended 31 March 2023, the LCBO posted revenue of C$7.4bn ($5.41bn), up slightly on 2022’s C$7.34bn. The LCBO had a net income of C$2.45bn in 2023.
What were workers demanding?
LCBO employees sought increased pay, called for the extension of opening hours and investment in the monopoly’s warehousing.
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By GlobalDataWorkers demanded a company shift from a “70% casual workforce” to more permanent part-time and full-time positions.
Unusually, the strike was not solely centred on worker benefits and pay. Workers also looked for internal LCBO investment to compete with grocery and big-box stores.
The employees wanted the monopoly to improve its operations, including increasing its logistics and e-commerce capacity.
Roughly 10,000 workers took part in the industrial action. The striking LCBO employees were represented by Ontario Public Service Employees Union (OPSEU).
LCBO and workers strike deal
LCBO and union officials agreed an end to the strike on Friday (19 July). Workers have ratified the deal and have returned to work at LCBO stores and warehouses.
The agreement sees staff at the state-run retailer and wholesaler receive an 8% pay increase over three years.
Additionally, amid Ontario’s plans to ease restrictions on the sale of alcohol, no LCBO stores are to close and there will be a “cap” on the number of agency stores.
LCBO will hire 60 permanent and part-time employees for its warehousing, while also converting 12.5% jobs – amounting to roughly 1,000 workers – from casual positions to permanent or part-time roles.
Staff who are casual or part-time and work more than 1,300 hours will have “improved” access to benefits.
LCBO has agreed to limit its ‘Convenience Outlets’ programme to 400 stores. These outlets allow independent local retailers to sell alcohol in areas where consumers have no easy access to LCBO shops.
It will also limit the contracting out of its warehousing operations and has pledged to increase the volume of products at warehouses serving its retail outlets by 1.25 million cases.
LCBO first made an offer to OPSEU on 4 July, one day before the strike.
Its offer to workers included a 7% wage increase over three years and the conversion of 400 casual jobs to full-time positions.
LCBO also offered to limit the contracting-out of warehousing and increase the volume of products at warehouses serving retail outlets.
The state alcohol seller claimed that “instead of responding to this offer or sitting down to talk about it”, OPSEU held a press conference to discuss the plan to ease restrictions on the sale of RTD beverages and end LCBO’s exclusivity.
OPSEU later responded to LCBO calling its offer “insulting”.
The impact of the industrial action
The strike had a significant impact on LCBO’s ability to operate, particularly when it came to labour-intensive parts of its business such as bricks-and-mortar retail stores.
LCBO initially said it would aim to open 32 stores three days a week if the strike was prolonged. However, the monopoly later said it would be closing all of its retail stores to support its on-trade customers.
LCBO relocated its remaining personnel to parts of the business that supported the supply of beverages to bars, restaurants and other hospitality venues. This led to the closing of LCBO’s 669 retail stores for the duration of the strike.
“Since the strike began, we have been able to serve retail customers through online shopping on LCBO.com, with orders being fulfilled within a week,” an LCBO spokesperson said on 14 July.
The group said that because of the “success” of online and “because of our confidence in our ability to continue serving retail customers online”, it reallocated workers away from its retail units.
However, there were reports that some Canadians were simply purchasing their alcohol from across provincial lines. Quebec’s state-run supplier, the Liquor Crown Corporation, reported a surge in sales along its border with Ontario.
According to media reports from the region, Quebec’s Liquor Crown Corporation reported that “shelves empty quick” and one of the more popular products had been RTDs. The company said it adjusted its operation to meet the increased demand along the border with Ontario.
On its own supply side, the LCBO instructed shipping companies to pause activities including carrier partner pickups to “help reduce congestion” in its warehouses and supply chain.
Ontario plans to expand alcohol sales
The Ontario government and its Premier Doug Ford have plans to expand the alcohol beverage market in the province to increase “choice and convenience for shoppers”.
“By the end of October 2024, every convenience, grocery and big-box store in Ontario will be able to sell beer, cider, wine and ready-to-drink alcoholic beverages if they choose to do so,” Ontario Premier Ford’s office said.
The initial expansion starts with grocery stores in the province being allowed to sell RTDs and large packs of beer.
The change was due to take effect on 1 August but was accelerated, allowing 488 licensed grocery stores to sell the products from 18 July.
OPSEU wants the government to retract its expansion of RTD spirit beverages and once again make them exclusive to LCBO, which is still the sole wholesaler of RTDs to grocery stores.
Ford said he would not budge on the plans to increase alcohol sales in venues outside of the LCBO, according to media reports last week.
Reporting in 2023, the LCBO noted that since its fiscal year 2017-18, beer consumption had decreased by 3%, wine was down 1.5%, while spirit sales grew by 1.3%. However, the LCBO noted that in that five-year period the sale of ready-to-drink coolers and seltzers “accelerated” by 20%.
Industry trade association Spirits Canada CEO Cal Bricker tells Just Drinks the plans to ease restrictions on RTD sales “draws the spirits industry closer to a level playing field that supports Ontarians”.
“However, we believe that the government can take this further,” Bricker added. “This should not be the end of expanding product availability and there is no reason that all spirits products should not be available in every point of sale that other beverage alcohol products are featured.”
According to the Ontario government roadmap for the alcohol expansion, the next milestone will be 5 September, after which all “eligible” convenience stores can sell beer, cider, wine and RTD beverages.
From 31 October, all “eligible” grocery and big-box stores will have access to the alcohol products listed above.
“Our responsible and balanced approach treats Ontario consumers like adults by giving them more choice and convenience, while also supporting Ontario retailers, domestic producers and workers in the alcohol industry,” Ontario Minister of Finance Peter Bethlenfalvy said.
“As we launch this new marketplace, we will continue to meet, consult and work closely with industry partners, local beverage alcohol producers and other stakeholders.”
The Ontario government said LCBO will remain a “public asset” and will continue to operate as a wholesaler and a retailer. It noted that a “full complement of beverages” such as vodka, gin and whisky will continue to be sold “exclusively” through the LCBO.
The beginning of the end of alcohol monopolies?
There are signs the historic alcohol monopoly systems that were established in a number of countries are changing,
In recent months, there have been changes announced to how some Nordic state-run monopolies operate, with both Sweden and Finland relaxing laws.
Last month, the Finnish parliament voted to raise the maximum alcohol content limit for drinks sold in supermarkets from 5.5% to 8% abv. That law came into effect on 10 June.
In a similar move, the Swedish government in June announced plans to allow the sale of “artisanally” produced alcoholic beverages in small quantities at the point of source. Currently, state-owned retailer Systembolaget handles all sales of alcohol above 3.5% abv.
“What a fully modernised alcohol retail system in Ontario looks like in the future is something that remains to be seen,” Spirits Canada CEO Bricker says.
“But a system that continues to promote the responsible and moderate consumption of alcohol, increases business investment, economic contribution, economic competitiveness, reduction of red tape and taxes, and the collaboration between public and private sector should be considerations.”
