LCBO strike in Ontario: What you need to know

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Nearly two weeks into the battle between striking LCBO workers and the province, the Ontario Public Service Employees Union (OPSEU) announced it had a counterproposal to the government’s last offer and the two sides returned to the bargaining table.

The development came two days after the Ford government said it was pressing full speed ahead with its expanded privatization plans and that it would no longer temporarily reopen some LCBO stores starting on July 14. Instead, it would focus on moving product and improving its online shopping experience, through which it has been servicing both business customers and consumers.

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Since the LCBO’s approximately 9,000 workers walked off the job on July 5, Ontarians have been busy parsing the parties’ public statements while wondering just how long and dry their summer might be. The Financial Post took stock of the ongoing dispute and explains where the LCBO is at, where it’s headed, and where a person might find a drink in this province.

How did we get here?

The strike started after a breakdown in contract negotiations between LCBO management and OPSEU, over concerns about Premier Doug Ford’s accelerated plan to expand the sale of alcohol to private businesses. Since then, the LCBO’s 680 retail stores have been shuttered, while its back-end operations have been crippled due to limited personnel.

The workers fear the privatization plan will result in job losses, as 70 per cent of LCBO employees are casual with no guaranteed hours, access to permanent part-time jobs or benefits. OPSEU has said it isn’t opposed to the expansion, provided the plan protects current jobs and includes measures to ensure the LCBO can better compete with the private sector — such as opening more stores, increasing hours of operation, and creating more positions. Union representatives claim these demands have been largely ignored.

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In the meantime, the Ford government is doubling down on its privatization plans, allowing licensed grocery stores to begin selling ready-to-drink (RTD) alcoholic beverages two weeks ahead of the previously announced start date of August 1. The province also sped up the licence application process for smaller retailers and convenience stores, which have a scheduled rollout date of September 5. There are currently 449 licensed grocers selling beer, wine and cider in Ontario.

“Doug Ford just wants to make life better for his wealthy friends,” said Colleen MacLeod, chair of the OPSEU bargaining team, in a press address. MacLeod said that Ford is “wasting upwards of a billion dollars of Ontario’s money” by handing it over to big chains like Circle K and 7-Eleven Inc.

Can Ontarians still buy from the LCBO?

At the strike’s outset, the government said it would reopen 32 of its stores for limited hours Friday through Sunday beginning July 19. Perhaps fearing picket lines and a deluge of customers — and perhaps pressuring the union back to the table — it will instead reallocate personnel to bolster its online sales operations.

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“This pivot means that we will be able to improve how we serve Ontario bars and restaurants to help increase product selection, availability, and expedited delivery,” an LCBO statement read.

Consumers and retail customers are encouraged to continue ordering booze through the LCBO website, with free home delivery and no minimum quantities or spend required. However, customers should expect delays in shipping.

A view through a window into a LCBO store in Toronto. The Ontario government decided against reopening some stores during the strike.

Where else can you buy alcohol?

The Ford government has spun the LCBO closures as an opportunity for people to buy local and support Ontario businesses. It recently rolled out a map of all retail locations to help customers find nearby stores.

In addition to grocery stores, consumers can purchase wine and beer off sales from bars, pubs and restaurants, depending on how much inventory is available. They can also buy beer from the Beer Store and local breweries; wine from the Wine Rack retailers or direct from wineries and independent wine merchants and distributors. The only way to purchase hard liquor, however, is through a local distillery or the LCBO and its partner convenience outlets (see below). The LCBO will retain its monopoly on spirits after the expanded privatization.

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Are any LCBO stores open in the province?

City dwellers visiting rural towns during the summer might be surprised to find an open and fully stocked LCBO in their travels. Once known as LCBO “agencies” and now called “convenience outlets” (LCOs), these are the government equivalent of franchises — stores that are independently owned and operated and therefore staffed by non-union workers. The agency system, through which local retailers are granted five-year licences, dates back more than 60 years, and was first introduced to service rural and remote areas. There are 389 LCOs in the province, and for the lucky communities they serve it is business as usual.

Additionally, anyone travelling to other provinces this summer is free to bring alcoholic beverages back to Ontario with them, provided it’s only for personal consumption. The Ontario government removed the interprovincial personal exemption limits on alcohol in 2019.

How are restaurants and retailers faring?

While certain smaller restaurants and bars have had to rely on their limited on-site stock to weather the strike, larger establishments and grocery stores managed to stockpile in advance. “These are really some of the larger operators that had the cash flow and the space available to secure product in larger buildings because it’s quite a large inventory to manage,” says Kelly Higginson, chief executive of Restaurants Canada.

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Higginson says that many of the smaller, independent restaurants tend to restock on a daily or as-needed basis, so they are the ones struggling to access and manage alcohol supply. “We have an industry that at the best times operates at slim margins, but right now 47 per cent of operators in Ontario are barely breaking even,” she said.

While some restaurant owners thought the strike could be a boon for business, Higginson says that so far her members are seeing regular sales volumes and any increase in revenue has been negligible. “And now that there is stress around accessing alcohol just to service their guests, restaurants are holding onto whatever supply they can,” she said.

How has the strike affected supply and demand of alcohol?

Restaurants Canada has stayed in close contact with the LCBO throughout the strike and says they have been working diligently to improve contingency plans as well as the availability and distribution of products. Initially, restaurants and other licensees were ordering through the LCBOs wholesale portal, “which seemed to be where there were a lot of challenges or glitches,” Higginson says. “Now everyone is using the same portal and tapping into the same inventory,” though there are still delays in moving things in and out of warehouses and keeping the website and portals up to date — anything that requires extra manual labour.

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On the supply side, the LCBO acknowledged it has had to pause some shipments coming from out of province until it can move existing product more efficiently, and delayed pickups and deliveries to and from its warehouses to limit congestion caused by the strike.

What’s ahead for the LCBO and Ontario drinkers?

Ford recently announced that, as of Oct. 31, every convenience, grocery, and big box store in Ontario will be able to sell beer, cider, wine, and ready-to-drink beverages. RTDs, otherwise known as pre-mixed cocktails, have been the main sticking point in the contract dispute with OPSEU, as the union sees the increased competition from private retailers as an existential threat to the hegemony of the LCBO — and, by extension, a threat to the job security of workers.

The government, meanwhile, sees the granting of RTD licences as a matter of public policy, and not something that falls within the purview of union contract negotiators. It considers the issue of expanded RTD sales as a non-starter at the bargaining table, and likely sped up the licensing process in part to prove the point.

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“Over time, this new, more open marketplace will introduce up to 8,500 new stores where consumers can purchase these products, the largest expansion of consumer choice and convenience since the end of prohibition almost 100 years ago,” the government stated in a recent press release.

While consumers may have easier access to alcohol, skeptics argue “at what cost?” The province is expected to see net revenue losses of $150 to $200 million per year as a result of the changes, at least in the near term, according to internal government and LCBO estimates.

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