Expert panel to review sale and distribution of beverage alcohol in Ontario

Archived Release

Expert panel to review sale and distribution of beverage alcohol in Ontario

Ministry of Finance

Province Ensuring Maximum Value for Taxpayers TORONTO, Jan. 11 - The McGuinty government is appointing an expert panel to review the distribution and sale of beverage alcohol in the province, Finance Minister Greg Sorbara announced today. "The LCBO is not for sale. However, our government made a commitment to undertake a thorough review of major assets," said Sorbara. "This is an opportunity for impartial experts to undertake a comprehensive review of the industry and recommend ways it can work better." The review panel will examine the roles of all the participants in Ontario's beverage alcohol distribution and retail system, including the government-owned Liquor Control Board of Ontario (LCBO), the privately owned Brewers Retail Inc., and the retail stores owned by Ontario wineries. The panel will receive input from the public and stakeholders and make recommendations in spring 2005. "The current system is a patchwork of policies and agreements dating back to the 1920s and the end of prohibition," Sorbara said. "Our government's focus on achieving results means we're reviewing major public assets and services to ensure they're operating efficiently and delivering maximum possible benefits to Ontarians." The government has given the panel five clear principles to guide the review: - Safeguarding socially responsible consumption, storage, distribution and sale of beverage alcohol - Convenience, variety and competitive prices for consumers - Maximizing value to taxpayers - Ensuring responsible reuse and recycling practices - Promoting Ontario's products The panel will be chaired by John Lacey, former vice-chair of the board of the LCBO, and will include: - Suzanne Labarge, former vice-chair and chief risk officer of RBC Financial Group - Ann Dumyn, former vice-president at SNC-Lavalin, Inc., and member of the board of governors of Lakehead University - Gwen Boniface, commissioner of the Ontario Provincial Police For more information about the panel, please visit www.beveragealcoholreview.on.ca. Backgrounder ------------------------------------------------------------------------- REVIEWING ONTARIO'S BEVERAGE ALCOHOL SYSTEM The government is reviewing provincial assets and services to ensure that the people of Ontario are getting the best possible service and value. Ontario's beverage alcohol system comprises the public and private entities - the LCBO, The Beer Store and wine retail stores - that are involved in the warehousing, distribution and retailing of beverage alcohol in the province. The system is a patchwork of policies and agreements dating back to the 1920s and the end of prohibition. Over the last 75 years, changing social attitudes, market conditions and public policy have led other jurisdictions to alter the way that they wholesale, distribute and sell alcohol. For the first time in decades, the Ontario government is taking a comprehensive look at the system to ensure it is delivering maximum possible benefits to Ontarians. How the review will work An independent panel will look at the existing system and also examine best practices and models from other jurisdictions. The panel's report, to be submitted to government by spring 2005, will be based on these guiding principles: - Safeguarding socially responsible consumption, storage, distribution and sale of beverage alcohol - Convenience, variety and competitive prices for consumers - Maximizing value to taxpayers - Ensuring responsible reuse and recycling practices - Promoting Ontario's products The panel will be asked to provide advice and recommendations on: - How to optimize the wholesale, sale and distribution of beverage alcohol to consumers while protecting public interests - How to provide responsible consumer access to points of sale - The appropriate roles and responsibilities of government in the beverage alcohol marketplace - Any related matters that the panel feels are appropriate with respect to Ontario's beverage alcohol wholesale, retail and distribution system During the review, the panel will receive input from the public and stakeholders with an interest in Ontario's beverage alcohol system. The panel's report will be made public before any decisions are made. Beverage Alcohol System Review Panel John Lacey, Chair John Lacey served as a member of the board of directors of the Liquor Control Board of Ontario (LCBO) from 1996 to 2001, and as vice-chair of the board in 2001-2002. Currently chairman of Alderwoods Group Inc., he is a seasoned professional in the corporate sector with more than 37 years of experience in senior executive positions. From January 1999 to January 2002, he was chairman of the board of directors of Loewen Group, of which he was a director from December 1998. Lacey has served as president and chief executive officer of the Oshawa Group, president and CEO of Western International Communications (WIC); president and CEO of Scott's Hospitality Inc.; and vice- president, operations, Loblaws Companies Ltd. Gwen Boniface As Commissioner of the Ontario Provincial Police (O.P.P.), Gwen Boniface leads more than 7,000 uniform and civilian members of the O.P.P. Commissioner Boniface earned a Bachelor of Arts degree from York University and a Bachelor of Laws degree at Osgoode Hall Law School. She was called to the Bar in Ontario during 1990, and is a member of the Law Society of Upper Canada. In 1997, she was appointed to the Law Commission of Canada, an independent federal law reform agency that advises Parliament on how to improve and modernize Canada's laws. She has been the recipient of the Humber College Alumnus of Distinction Award and was invested into the Order of Ontario in 2001, and the Order of Merit of the Police Forces in 2002. Ann Dumyn Ann Dumyn is currently managing partner of the private consulting company Arrawac Associates Inc., and corporate director for Aeroquest International Limited. Dumyn has 35 years experience in business development, relationship facilitation, project management, social responsibility practice and financial services. Between 2000 and 2004, she was vice-president, Aboriginal and northern affairs with SNC-Lavalin Inc., where she developed and managed business opportunities with governments, agencies and corporate partners in the power, mining and infrastructure sectors across Canada. Before joining SNC- Lavalin, Dumyn held a series of senior positions with the Bank of Montreal. She is a member of the board of governors of Lakehead University and a member of the board of directors of Habitat for Humanity, Dufferin-Caledon. Suzanne Labarge Suzanne Labarge is recently retired as vice-chair and chief risk officer of RBC Financial Group. She has more than 30 years experience in commercial and corporate lending, audit, advanced portfolio management and market risk management. Labarge began her career with the Royal Bank, where she served in a number of executive positions. In 1985, she joined the federal government as the assistant auditor-general, and two years later she was appointed deputy superintendent in the federal Office of the Superintendent of Financial Institutions. She returned to the Royal Bank in 1995 as executive vice- president, Corporate Treasury, before assuming the role of vice-chair and chief risk officer of RBC Financial Group in 1998. She also serves on the board of governors for McMaster University, and is a board member and former chair of the Risk Management Association. For more information about the panel, and its mandate, please visit: www.beveragealcoholreview.on.ca. Overview of Ontario's beverage alcohol system Liquor Control Board of Ontario (LCBO) The LCBO, established in 1927, is a self-financing operational enterprise of the Province of Ontario. With 3,280 full-time and 3,283 part-time employees, the LCBO operates 598 corporate stores across Ontario. In addition, the LCBO authorizes 196 agency stores located within existing private retail outlets, typically in remote and rural areas too small to support a corporate store. Alongside its retail operations, the LCBO is also first receiver of all liquor commercially imported into Ontario and enforces uniform and minimum prices. In 2003/04, the LCBO's net sales (not including PST and GST) were $3.3 billion, generating a dividend to government of $1.04 billion. The LCBO's gross sales were $3.9 billion. The LCBO reports to the Minister of Economic Development and Trade. The Beer Store/Brewers Retail Inc. (BRI) Founded in 1927 and initially called Brewers Warehousing, the organization was established as a cooperative of Ontario brewers to distribute its products. Over the years the organization has evolved. Today, The Beer Store sells both domestic and imported products and is owned by Molson Canada, Labatt Breweries of Canada and Sleeman Breweries. In 2003/04, The Beer Store accounted for 84.1 per cent of provincial beer sales by volume, with gross sales of $2.6 billion. With 436 stores across Ontario, the organization has some 1,700 full-time and 4,000 part-time employees. Wine retail stores Ontario has 395 wine retail stores that are owned by the province's licensed wineries. The stores are allowed to sell only the products of the winery that owns them. On-site stores (i.e. located at the winery) number 105; the remaining 290 off-site locations are either stand-alone outlets or housed within a larger retailer. Two wineries, Vincor International Inc. and Andrés Wines Ltd., operate the majority of the off-site stores. Free trade agreements meant that after 1987 no new off-site wine retail stores could be authorized. Wine retail stores account for approximately 36 per cent of Ontario-produced wine sales and 15 per cent of total wine sales in the province. For 2003/04 this translated into gross sales of $182 million. Ontario beverage alcohol manufacturers The sector comprises 125 licensed wineries, 12 licensed distillers and 41 licensed breweries. Regulatory agencies and government oversight The Alcohol and Gaming Commission of Ontario (AGCO) Reporting to the Minister of Consumer and Business Services, AGCO is responsible for administering the Liquor Licence Act, parts of the Liquor Control Act and the Wine Content and Labelling Act, as well as other statutes. It is a quasi-judicial regulatory agency, with a mandate to regulate the sale, service, and consumption of beverage alcohol to promote moderation and responsible use, and to ensure that casino and charitable gaming is conducted in the public interest, by people with integrity, and in a manner that is socially and financially responsible. Vintners Quality Alliance (VQA) Ontario Operating under an administrative agreement with Minister of Consumer and Business Services, VQA Ontario is a not-for-profit corporation with delegated responsibility for administering the Vintners Quality Alliance Act and its regulations. VQA Ontario enforces quality standards and an appellation of origin system for Ontario VQA wines. Disponible en français www.gov.on.ca/FIN/For further information: Contact: Sean Hamilton, Minister's Office, (416) 325-8679; Manuel Alas-Sevillano, Ministry of Finance, (416) 212-2155