Pricing Disadvantages
Competitive Disadvantage
Inspection Disadvantages
ORHMA Challenged the Gallonage & Mark Up Fee
Liquor Licence Act Review
Pricing Disadvantage
Wholesale Pricing: That the government implement a true wholesale pricing regime for liquor licensees, and that the amount of the discount should be at least equivalent to the discounts available to the LCBO’s agency store system, i.e. 11.5%, in order to stimulate licensee purchasing power and alleviate fiscal pressures of other programs such as the deposit-return program for wine and spirits containers.
6% Beverage Alcohol Markup Fee: eliminate the mark up fee that liquor sales licensees must pay on purchase of beer, wine or spirits from the LCBO or its authorized agents.
Value-Adds and Price Specials: Permit liquor sales licensees the same product rebates, discounts and specials available to the home consumer and put an end to licensees cross-subsidizing home consumers.
Beer Pricing: Establish a transparent and accountable system for beer pricing in Ontario that fosters more brewer competition, greater selection and more purchasing options for the liquor licensee community. Permit licensees the opportunity to purchase their beer inventories using credit cards.
Licensee Off-Premise Retail Sales: Allow liquor sales licensees to sell beer, wine and spirits at retail to customers for home consumption.
All-Inclusive Travel Packages: The government must assist Ontario’s declining tourism industry by permitting both the accommodation and foodservice sectors all-inclusive travel and dinner packages that include beverage alcohol which is common practice in other tourist destinations and it is a competitive disadvantage.
Free Drink Exemptions: New wording be found that allows for specific circumstances while avoiding situations of abuse. The goal is to remove regulation from an impediment to reasonable growth.
SOP’s: Not only develop but implement a fair “even playing field” with non hospitality premise applicants operating under special occasion permits through the license application process and handling of alcohol service.
Inspection Disadvantages
"Permitting Drunkenness” Definition: The absence of a definition of “drunkenness” places an admitable standard on the hospitality and tourism industry. The Government of Ontario should work with legal experts, the ORHMA and other stakeholders to consider amendments to LLA Regulation 719 that would more clearly define a licence holder’s obligations regarding the safe sale of alcohol to patrons, or to define “drunkenness”. The Government of Ontario and the AGCO produce a public education campaign informing citizens of their responsibilities regarding the consumption of alcohol.
AGCO Inspections: The typical inspection model employed in Ontario is one of strict enforcement. The ORHMA suggests that the Ontario Government move to a compliance based model. The ORHMA would like to see a paradigm shift in enforcement away from a more punitive enforcement approach towards a compliance approach that makes better use of warnings and inspection guides. At present, operators feel targeted by inspections and in the dark on the criteria being employed during the inspection. All of this can be turned around making the process less about catching those breaking the law and more about making sure all operators are able to meet and/or exceed the standards expected of them.
ORHMA Challenged Markup & Gallonage Fee:
The ORHMA successfully challenged Government to eliminate the 12% gallonage fee in its entirety. The elimination of this fee saved the industry approximately $25 million a year.
Prices to liquor licensees for beverage alcohol can end up being greater than those offered to the public due in large part to the imposition of the "gallonage fee". The regular shelf price paid by a consumer for beer, wine and spirits reflects a myriad of different fees, levies, mark-ups and taxes imposed by the provincial and federal governments on a supplier's product. Although licensees do receive a small LCBO discount, the "gallonage fee" took away any price advantage.
The Government ended up applying a 6% markup fee on alcohol purchases. The ORHMA has been advocating to remove this fee. Click on the links below to view related documents:
Liquor License Act Review
The Minister of Consumer and Business Services initiated a review of the Liquor License Act. In 2004 the ORHMA submitted a report of recommendations to the Standing Committee on General Government.
While the Beverage Alcohol System Review's mandate is to examine Ontario's beverage alcohol distribution system in its entirety and to make recommendations to government, the Liquor Licence Act Review focused specifically on the Liquor Licence Act and its regulations and the Alcohol and Gaming Commission of Ontario (AGCO) as its vehicle for implementation. The first round of the review process resulted in earlier amendments to the Liquor Licence Act, among them the Bring Your Own Wine.
Under the authority of the Ministry of Consumer and Business Services, a broad review of the Liquor Licence Act and regulations continued after the Beverage Alcohol System Review panel submitted its recommendations to the Minister of Finance. Consultations with key stakeholder groups, including the ORHMA reconvened in the Fall of 2005. The Ministry did not entertain issues such as extending the hours of sale and service for licensed premises or the legal drinking age.
The ORHMA participated as a key industry stakeholder, actively engaged in the stakeholder discussions and represented the interests of the hospitality industry.