Monday, August 19, 2013

Convenience Cartel

 Most people think that the government sells all alcoholic beverages in Ontario. That's not exactly true.

The Beer Store (TBS) is a government sanctioned cartel (they call it a consortium) of three private companies (two of which are 98% owners of TBS). TBS is controlled under Ontario's Liquor Control Board Act which gives the LCBO the power to set price floors, set how much beer may be discounted during a "sale," and just about everything else to do with sales and distribution. TBS's employees are all members of United Food and Commercial Workers International Union.

Recently OCSA (Ontario Convenience Stores Association) paid for a study that showed "that the average price difference in a 24-bottle case of beer between (Ontario and Quebec) is about $9.50, or 27 per cent lower in Quebec.  This was blamed on the Ontario cartel, and the study implied that allowing convenience stores to sell beer would lower the Ontario price by creating "efficiencies." What a good idea I thought, at least a start to move away from government imposed monopoly. So I called up a spokesperson for  OCSA to see if they would be interested in providing a speaker and supporting a conference that I'm organizing. I told him the conference was apolitical but would have many libertarians that will support his cause. "No, not interested," and he went on to explain how liquor and beer sales are important income to the provincial treasury, about $1.7 billion in 2012. Right. It was a short phone call.

So what is OCSA trying to accomplish? They have a campaign on Facebook, and here, which purports to argue "Free Our Beer." They're plying the idea that most people want convenience and a bit of a lower cost, which is certainly true. As for competition, they don't really want to "free our beer" they want to get in on the action and become part of the cartel.

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