How an LCBO strike could affect distilleries, breweries

Impact of LCBO strike on distillers and breweries As the deadline for the LCBO strike nears, Spencer Turcotte gets reaction from distillers and breweries in Waterloo Region.

All LCBO stores across the province could shut down this week if workers go on strike, and distilleries are monitoring the situation closely.

Murphy’s Law Distillery in Elmira sees much of their sales through the LCBO.

“We’re a very seasonal business with the LCBO, but I’d say in the makeup of a year, LCBO accounts for 60 per cent of our sales,” said Ben Murphy, Murphy’s Law co-owner.

Murphy said their biggest buyer is the liquor store, so word of a strike is worrisome.

“We’re shipping there constantly and not being able to sell through the hundreds of locations they have would definitely impact our sales and our bottom line,” Murphy said.

While they would be able to sell products through online orders, as well as at the distillery and through various markets, that’s not their preference due to taxation.

“Every jar sold here, we have to pay 61.5 per cent off the gross profit to the Ministry of Finance, which is an Ontario-based taxation. Then we pay 13 per cent to the feds and then on top of all that, we pay an excise tax. So in the grand scheme of things, we pay out about 84 per cent tax,” Murphy said.

What about breweries?

At Innocente Brewing in Waterloo, it’s a slightly different story.

They sell some products at the LCBO too, but they said they make more money selling at the brewery.

“For us, [the strike] would be great because our prices are the same as the price at the LCBO. So if I sell cans for $4 here, I make that $4 instead of the $2.60 that I sell to the LCBO,” said Steve Innocente, president at Innocente Brewing Company.

Innocente takes it a step further saying the longer the strike goes on, the better it could be for his business.

“I could envision your local microbrewery being turned into a local Ontario craft brewer’s beer store,” he said. “So we would start to reach out to people that we know and get a beer from other breweries in.”

What you need to know about the strike

If no deal is reached by 12:01 a.m. on Friday, the LCBO will close all its retail stores for 14 days.

After two weeks, only 30 of the 669 stores it operates will open for in-store shopping. The stores will operate Friday, Saturday and Sunday with limited hours in effect.

If stores are closed for two weeks, the LCBO said it would continue to fulfill wholesale orders and accept orders for free home delivery on its website and mobile app. It added that Specialty Services and Duty-Free will remain operational during the strike.

The union representing LCBO workers has said the primary point of contention at the bargaining table is the Ford government’s expansion of alcohol sales.

Last week, the LCBO extended store hours at its stores, opening early at 9:30 a.m. and many staying open until as late as 10 p.m. to give customers more time to stock up.

-- With files from CP24