LCBO hastens its own demise

Many observers believe the LCBO workers going on strike at all is just going to put another nail in the coffin of this outdated organization. Photo Credit: Adobe Stock Images. 

The LCBO strike currently underway is the first time the union representing LCBO employees actually proceeded with a strike since the organization came into existence in 1927. On several previous occasions, workers had voted to strike but an agreement was reached in time to prevent workers from walking off the job. This time is different as the union involved, OPSEU, seems to want to have one more kick at the can before it makes the 9,000 workers it represents in LCBO stores completely redundant. 

The LCBO monopoly has been eroded in recent years, starting with the Liberal government of former premier Kathleen Wynne permitting the sale of some alcohol products in large grocery stores. The Ford government’s plans to permit all grocery stores and convenience stores to sell beer, wine and ready-to-drink cocktails as early as this summer has further galvanized the union in an attempt to protect some of its remaining monopoly. One of the product lines the union hopes to maintain a monopoly over is the ready-to-drink cocktail segment, which has seen exponential growth in the last few years. 

The arguments put forward by the union are lame in the extreme. Colleen MacLeod, head of OPSEU’s Liquor Board Employees Division, proclaimed, “Premier Ford is trying to sell us a bad deal, one that hands over more of the alcohol market to big grocers and convenience chains like Loblaws and Circle K.”

Who cares? Certainly not the vast majority of Ontarians who enjoy the ability to pick up some wine or beer while shopping for their weekly groceries. MacLeod also failed to mention the many small, independent businesses that would relish the opportunity to add alcohol products to their other offerings. As has been shown in most countries around the world and in many Canadian provinces, this is a perfectly workable retail model that puts consumers’ interests first, not a relatively small number of union members who are considerably better paid than most retail employees with significantly better benefits. 

President of OPSEU J.P. Hornick further warned that the union was concerned that the government’s plan to open retailing of alcohol would undermine the LCBO as private retailers could sell alcohol at lower prices to consumers. The horror! Consumers actually getting a better deal! Only the ridiculous unions could consider this a bad thing. 

It’s interesting to note that some of the threats the union has made in the past regarding opening up liquor retailing are no longer being used. Formerly, unions would warn of apocalyptic scenarios where irresponsible store owners would recklessly sell booze to minors and alcoholism in general would skyrocket as the retailing of liquor was not as controlled as with the government monopoly. The union had also claimed the Ontario government would not reap the same profits to be spent on social services with a more open retail structure. 

None of these arguments ever held any water. Ontario retailers have been proven to be very responsible vendors of other age-restricted products such as tobacco and no terrible booze crises have taken place in jurisdictions with more liberalized alcohol retailing. Other Canadian provinces who moved away from a government monopoly retail model, such as Alberta, have shown that the government can indeed obtain the same revenue with a more competitive private sector structure, offering more variety to consumers at better prices. 

One of the union’s stated negotiating goals is to achieve a major increase in severance pay, in the hope that it will make laying off thousands of LCBO workers too expensive for the government. It kind of sounds like that old threat, “The beatings will continue until morale improves.” Not exactly a compelling reason for the government to play ball with the union. 

The actual reason the Ontario government did not try to prevent this strike could well be that the LCBO is no longer the monopoly provider of liquor in the province and such a strike won’t have the impact it would have had in the past. In fact, the Ford government even created an online tool to help consumers find locations to purchase alcohol products during the strike, much to the union’s chagrin. As a bonus, many independent breweries and wineries in Ontario could find new customers during the strike. The LCBO has an abysmal record of listing local beer and wine in its stores, and it would be poetic justice if the strike boosted the fortunes of the many qualities independent producers that were never able to obtain shelf space in the LCBO. 

Another odd element of this strike is that the union itself has declared it will end at a certain time. If agreement is not reached by July 19 – two weeks after the strike began – OPSEU has said it will reopen some stores with limited hours. Most union strikes are considered to be infinite until a deal is reached, so having this concession on the union’s part is unusual to say the least. It is also yet another indication the union knows it doesn’t have a strong position and doesn’t want to inconvenience Ontarians too much. In fact, many observers believe the LCBO workers going on strike at all is just going to put another nail in the coffin of this outdated organization. 

It’s very clear that the union doesn’t have a leg to stand on, and even the union reps seem to know that as they have mounted a very weak opposition to the Ford government’s plans to further liberalize alcohol retailing. It’s pretty difficult to argue that an open and competitive distribution system for alcohol that has existed in most parts of the world without issue, often for centuries, will be a disaster for Ontario. Fortunately, the Ford government seems to realize this and continues to promote further liberalization of this market to the benefit of consumers. We can only hope that this pro-market thinking can be contagious for other public services which currently suffer from government monopolization with all of the high costs, reduced efficiencies and union bullying that entails. Fingers crossed.

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