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Doing Business in Ontario

Working With the LCBO: How to Sell Alcohol in Ontario

WineBox2In the Province of Ontario, the alcoholic beverage market is fully regulated and operated by the Liquor Control Board of Ontario (LCBO), a government monopoly. In order to export alcohol to Ontario, you are required to work with the LCBO. As the single largest buyer of alcohol in the world, the LCBO operates approximately 639 retail stores across the province, and has its own set of operating procedures, entirely separate from those of other Canadian provinces. Wine Lovers Agency is fully licensed by the Alcohol and Gaming Commission of Ontario and helps producers and suppliers to export and market their products in Ontario, either through LCBO retail stores or directly to Horeca.

 

There are two main channels used to enter the Ontario market:

1. Private Ordering
Private Ordering can be further broken down into two avenues. The main one is the Consignment Program. The LCBO assigns warehouse space to an agent and limits the number of cases which can be held there. The agent is free to import any products, at any price point, within the space limits assigned. Products are then sold by the agent directly to Horeca customers or private consumers. The second option allows products to be ordered directly for clients on a pre-order basis. The wine is imported specifically for the customer and no additional stock is kept.

2. LCBO Retail 

This channel offers suppliers high volume sales through one of two LCBO divisions: Wines (previously known as General List) or Vintages. The Vintages program is the fine wine unit of the LCBO, offering customers a premium selection. Products are offered as a one-time release. Products that perform well must still resubmit an application to be released in the future. The Wines program offers suppliers an opportunity of on-going business, providing the product meets an annual sales target preset by the LCBO. Products featured in this category are generally cheaper and more commercial than ones purchased by LCBO Vintages, with strong brand appeal for the consumer.

For both the Vintages and Wines programs, the LCBO periodically announces sets of tenders specifying the types of products they’re looking for and the desired retail price. This can include products of a certain country and/or region, type, grape varietal, price point, etc. In order to participate in LCBO tenders, a supplier must appoint an agent (eg. Wine Lovers Agency), who then participates and processes the application on their behalf. There is no upfront cost or risks associated with participating in a tender. Working with the LCBO and the Government of Ontario also eliminates any risks associated with payments.

In 2013-14, the LCBO Annual Report states total sales of $4.99 billion, with Wines accounting for $1.334 billion, Spirits $1.967 billion and Beer/Cider $996.4 million.

 

Working With Wine Lovers Agency
As an agent, Wine Lovers Agency Inc. participates in tenders and promotes/markets brands on behalf of our suppliers to consumers and in the On-trade. We provide guidance through the various requirements of the LCBO including labelling, case specifications, lab work and much more. We offer a proven track record of selling a variety of products, at various price points, to both the Vintages and Wines (General List) channels, providing on-going business for our suppliers.

Association Links
www.drinksontario.com
www.lcbo.ca
www.agco.on.ca

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