Trade body Spirits Canada’s members have filed a court application for the dismissal of Liquor Control Board of Ontario (LCBO) pricing penalties issued to suppliers.
Spirits Canada, an industry association with Diageo and Brown-Forman among its members, raised concerns in May that the LCBO was “abusing” its “market dominance” after distillers were hit with a “retroactive tax bill”.
The trade body said its members were “blindsided” by what it called a “staggering multi-million-dollar retroactive tax bill” issued by LCBO.
LCBO claims it was looking for the payments due to lower prices given by suppliers to the state-run alcohol retailer in neighbouring Quebec. The prices had broken the sales agreements between LCBO and suppliers, the Ontario state-run wholesaler and retailer said.
Spirits Canada argued Quebec had “long applied” a lowest retail price system and that Ontario has a mandatory minimum retail price that raises prices each year.
“We are disappointed that we have had to refer the LCBO's contradictory policies to the courts, but at this time, and amid retaliatory measures by the LCBO, we have been left with no other options,” Spirits Canada CEO Cal Bricker said.
In a statement issued yesterday (25 July), LCBO said: “The fact is that when suppliers do not honour our legal agreements on consumer protection, the only people that lose are Ontarians.
“By breaching the terms contained in our purchase order terms and conditions that require that LCBO receive the same or lower price as other Canadian liquor jurisdictions, LCBO customers are unfairly made to pay more for beverage alcohol than other consumers across the country.”
LCBO added: “These are not retroactive tax bills, fines, nor penalties, but rather pricing chargebacks levied in accordance with terms of our long-term contracts.”
Canada has 13 authorities across its ten provinces and three territories tasked with regulating alcohol sales and distribution, of which the LCBO is one.
Earlier this week, workers at LCBO voted to accept a deal on pay and other issues, bringing two weeks of strike action to a close.
