In an earlier post, I promised that I would make the effort to say some good things about the LCBO. So here is my list (although some items still have qualifiers…oh, well):
- There is a reasonably wide selection from all parts of the world with no one region or country especially favoured, in contrast, for example, to the preponderance of French wines in the SAQ (Quebec). Of course, this even-handedness even extends to Ontario and other Canadian wine, which is a bit odd. Imagine a wine shop in Bordeaux not having a comprehensive Bordeaux section!
- Continuing with the Bordeaux theme, the LCBO provides good access to Bordeaux futures, with only a 25% deposit, compared to the 100% demanded elsewhere (e.g. in the U.S.)
- Thorough technical testing and a generous take-back policy ensure that very little contaminated or adulterated wine appears on the shelves. On the other hand, the take-back policy is only generous to the customer. The little-known requirement making the supplier pay back the full retail cost on returns is unconscionable (look here to see how the LCBO instructs agents to pay for all costs associated with “defective” product).
- Food and Drink magazine, at least from a consumer viewpoint, is a well put-together publication, although it is bad news for the rest of the magazine publishing industry, who must put up with a subsidized competitor.
All right, with that out of the way, let’s get on with this post, in which I want to take a closer look at point number 1 – selection. In order to get a better feel for the breadth of the selection at your neighbourhood LCBO, try these experiments the next time you cross its threshold:
- Ask to see the Vintages German wine section. You’ll likely only find a couple of bins. After years of suffering through post-Liebfraumilch trauma, German wines, and Riesling in particular, are finally experiencing a renaissance in most of the wine-drinking world. Try telling that to the LCBO. German wines don’t fall into their wine world view of massive overextracted “blockbusters” that earn 90+ points from all the “right” critics.
- Now try to get a decent half bottle of wine. For a real laugh, look for a half bottle of good German wine!
- Next, let’s say there is a claret or a Chianti Classico that you find you really enjoy. Try to find a vintage other than the current one in the store. In fact, in the regular listings section, wines are not catalogued by vintage. As the vintage changes, the CSPC does not – they don’t care. For the LCBO, wine is a commodity – after all, the SKU on a light bulb doesn’t change from year to year.
- For an additional whimper, visit your neighbourhood delicatessen or other specialty food shop. In Europe, in many parts of the USA, and in most of the rest of the civilized world, that shop would include an inviting wall of fine wines to accompany the excellent breads, cheeses, sauces, and charcuterie…sigh. Unfortunately, we’re stuck with a monopoly. Yes, private specialty stores would add immeasurably to the selection of wines available to the Ontario consumer, but privatization is a whole other topic that I will address in a later post. In the meantime, it is still relevant to this discussion.
So why is the selection at the LCBO so inadequate? Or is it? After all, the management will try to tell you how many thousands of separate listings they have in order to prove they have a wide selection. But that’s equivalent to a ladies’ wear shop telling you that they have a large number of distinct items of apparel, so you’ll find everything you ever want in their shop and you should never need to enter another store. In other words, the biggest and most obvious reason is: it’s a monopoly. Their selection would be laudable if they were simply one chain competing against many other shops and chains with their own selections and specializations. But, outside of Ontario winery stores, those don’t exist.
However, the study of economics tells us that it is possible for monopolies to provide us with a very wide selection. Competitors generally focus on the high volume, high profit lines to stay in business and may ignore small volume specialty products and their niche markets. A monopoly, on the other hand, can afford to stock a wide range of products satisfying all markets. Satisfying niche markets will actually increase their revenues and profits beyond the high runners. In an attempt to be somewhat even-handed, I should say that you can, in fact, see evidence of these trends in the Canadian wine retailing business. In Alberta there are periodic complaints about the lack of selection in many shops, although there are also high quality retailers in the major markets. On the other hand, the LCBO monopoly does broaden its market appeal through its Vintages section. Now they could do a lot better if their own policies and practices didn’t hold them back.
One example is the requirement that any one wine must be acquired in sufficient quantities to be made available throughout the province, at least at the level of Vintages locations. That practice sets a lower limit on quantity and effectively shuts many of the small quality producers out of the Ontario market. There is a solution to this problem – allow Product Consultants to list wines (and other products) in their own store up to some maximum value (e.g. 5-10% of their Vintages Corner budget). These wines could come from agents’ stocks, or there could be a modest budget to allow PC’s to travel once or twice a year to wine regions and to make their own selections. These wines would then go through a process similar to that undergone by any private importer to ensure that they meet LCBO standards. This procedure would also see more limited production Ontario wines make it to the store shelves.
Let me toss out another issue that affects selection. The LCBO seems to be fixated on highly manipulated fruit-forward wines and tends to play down the more terroir-driven food-friendly wines that are making a comeback elsewhere. I have some evidence to support that statement as I recently put together an extensive list of producers of so-called natural or authentic wines (at least those that have some visibility internationally). I came up with 1667 distinct wines from 361 producers. Then I checked for availability – only 46 wines were listed with the LCBO while 117 could be found at the SAQ. Oh well, at least we can now transport wine legally across provincial borders! Check out Free My Grapes.
In the end, the only real solution will be private competition. Don’t hold your breath.
