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Privatizing the LCBO may not be a bad idea

December 2012

I think it is a little early to summarily dismiss the idea of privatizing entities like the LCBO.  Yes, it does generate billions in revenues for the provincial government, but what is wrong with examining how efficiently is the LCBO run?   When you consider how much money the LCBO spends on overhead (their costs), could a privately run LCBO actually see increased profits for both the government AND shareholders, some of whom may include pension funds, RRSPs, RESPs, or other investment funds?

The LCBO has brightly lit, pleasantly decorated stores with products carefully displayed on shelves with bright, colourful displays promoting their products.  The Beer Store outlets, in contrast, are like walking into a warehouse.  Product displays are little more than copies of the bottle labels posted on the wall with corresponding prices.  Some stores keep their beer in the back, but those who allow customers to serve themselves simply stack the beer cases on skids or directly on the floor.  How many more billions in profits could the LCBO generate for the province if they reverted to this business model (LCBO outlets used to be like warehouses)?  The Beer Store is run by the private sector, who are obviously concerend about maximizing profits by limiting expenses, as any private business should be.  Profits are not a dirty word.  Like I said, profits and dividends benefit pension funds, RRSPs, RESPs, or other investment funds held by private citizens.

Do we really need frills with the LCBO?  Does the LCBO really need to spend as much money as they do on advertising when they are pretty much a monopoly (wine sales excluded, of course)?  The LCBO has been frequently accused of not getting the best possible prices from their suppliers, with accusations even extending to the point that the LCBO asking suppliers to charge them more money

I really don’t mean to offend anyone who works at the LCBO, but most positions in the average store could be classed as unskilled labour.  Is it really fair that they make more than a clerk at a variety store or grocery store.  I do realize that The Beer Store pays good wages too, but that’s private money made by a private company, so they can pay whatever their shareholders allow.

I have no idea if it is a good idea to privatize the LCBO (or OLG), but we should examine it.

About the author

Bruce Forsyth

Bruce Forsyth served in the Royal Canadian Navy Reserve for 13 years (1987-2000). He served with units in Toronto, Hamilton & Windsor and worked or trained at CFB Esquimalt, CFB Halifax, CFB Petawawa, CFB Kingston, CFB Toronto, Camp Borden, The Burwash Training Area and LFCA Training Centre Meaford.

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