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September 1, 2011 3:00 PM

McGuinty Government lowering LCBO mark-up on spirits sold at land-based duty free stores

Ontario is lowering the LCBO's mark-up on spirits, low-alcohol spirits and brandy sold in land-based duty free stores to 30 per cent from 50 per cent of the landed cost.

The changes will improve the competitiveness of land-based duty free stores, allowing them to create jobs.

The mark-up reduction is expected to create more than 200 new full-time jobs for Ontarians. It builds on changes made in 2008, when the LCBO lowered the mark-up on imported wine and beer as well as coolers sold at land-based duty free stores.

The land-based duty free stores benefiting from this reduction are those located in Fort Erie (Peace Bridge), Niagara Bridge, Queenston-Lewiston Bridge, Bluewater (Sarnia), Windsor-Ambassador Bridge, Windsor-Detroit Tunnel, Johnstown (east of Brockville), Lansdowne (Thousand Islands), Sault Ste. Marie, and Fort Frances. The change will also apply to airport duty-free stores in Hamilton, Thunder Bay and Ottawa.

The mark-up for spirits sold at LCBO stores will also be lowered to create new economic opportunities for Ontario's distillers while keeping price consistent to consumers.

Both mark-up reductions will come into effect October 10, 2011.

QUICK FACTS

 
  • Economic modelling done by Econometric Research Limited and provided to the government projects that the changes to the markup at land-based duty free stores will create 220 direct and indirect full-time jobs.
  • Sales at Ontario's land-based duty free stores are made to people leaving Canada for America.
  • Spirits companies in Ontario provide employment for over 1,300 people directly and another 4,700 in related industries.
  • Ontario is the centre of the spirits industry in Canada and accounts for 75 per cent of Canadian spirits exports to more than 160 countries around the world.
  • A mark-up reduction is in line with other provinces such as the British Columbia Liquor Distribution Branch, which recently reduced the duty free mark-up rates for spirits, wine, cider and coolers.
  • Ontario's Tax Plan for Jobs and Growth is providing the industry with an annual benefit of up to $5 million.

CONTACTS

  • Kent Williams
    416-212-1439
    nullMinistry of Finance



Ministry of Finance
ontario.ca/finance


 

"The mark-up reductions will be good for Ontario consumers, will help create jobs and boost sales of spirits in our duty free shops while allowing them to better compete with their U.S. counterparts."

 –  Bob Chiarelli
Minister of Infrastructure

"Niagara is home to three land-based duty free stores. This change will help create good jobs in the Niagara Region"

 – Kim Craitor
MPP for Niagara Falls and Parliamentary Assistant to the Minister of Tourism and Culture (Tourism)

"The Ontario Duty Free Association applauds today's decision by the Government of Ontario, which will improve land border duty free industry competitiveness and thereby create new jobs for Ontario, particularly in border communities"

 – Tania Lee
Ontario Duty Free Association

 
 
 
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