Ontario wine agents are accusing the Ontario Liquor Board of “unfair policies” after California wines were taken from the LCBO shelves almost a month ago due to the current commercial dispute with the US.
The agents say that they are also frustrated by the lack of communication of the LCBO on the existing inventory and still send them in transit of orders imposed before the prohibition.
On March 4, Ontario Doug Ford prime minister announced that the LCBO would take 3,600 alcohol products made in the United States from its shelves in response to US tariffs, urging consumers to support Canadian brands. Other provinces have also followed their example as part of a broader national response to US tariffs imposed on Canadian goods.
While the LCBO says that he has stopped selling American wines to groceries and convenience, “the decision to sell through the existing inventory is at his discretion,” he said in a statement sent by email.
The LCBO calls people or companies of “agents” or companies that are officially approved to work with it under their shipping program. These agents order alcohol of specific suppliers (such as wineries or foreign distilleries) through the LCBO. They pay to store products in LCBO stores and help organize sales, generally selling to bars and restaurants.
Since the prohibition was instituted, agents cannot access any American LCBO product.
“But Costco still has hundreds of California wine cases on its shelves because (unlike me) they can store their wines,” said Mark McFadyen, director of Abcon International Wine Merchants Inc, an importer of Californian wine based in Toronto, in an email to CBC News.
Costco did not respond to the request for CBC News information on its agreement with the LCBO. But the LCBO said: “License retailers are responsible for storing all bought products.”
Concerns with warehouse access and inventory
McFaday sells wines directly to restaurants and through the Vintage section of LCBO. He says he had an “important launch” of a California merlot in the vintage section of Lcbo, which means a special and limited offer of California wine that is generally not available on regular shelves.
Now, you cannot sell California wines to restaurants or even recover them from the warehouse.
The LCBO administers the storage and storage of alcoholic products it sells, until it is distributed to LCBO stores or retailers authorized in Ontario. Agents normally pay for storage. Agents who will no longer have to cover storage costs for US products in LCBO stores from March 4 due to the prohibition were no longer informed. However, agents argue that storage is just one of the many concerns ongoing.
“We do not know how they will handle storage rates in the future. For example, if my wine was stored for 20 days before the ban, will the contest continue from the 21st of April 3? Or will it be restored?” Laura Rapuano said, director of Airen Imports, another importer of American wines based in Toronto. About 60 percent of their income comes from Californian wines.
During the quarter from June to October 2024, the LCBO sold $ 2.24 billion in wine, which represented about 28 percent of its sales that quarter. American wines represented 20 percent of the wine market share of the province.
In addition to storage problems, Rapuano is also concerned about inventory limits.
Ontario is taking 3,600 American products from the LCBO shelves in response to Trump tariffs, with Prime Minister Doug Ford encouraging people to buy Canadian brands.
The agents are restricted in the amount of stock they can have by hand and in transit. Although the LCBO said that “the inventory limits are not affected by the number of American storage products,” Rapuano is concerned that if the new actions of other countries arrive, something that is working on, runs the risk of exceeding the limit and cannot request more products if the prohibition ends.
Impact on restaurants
Ontario restaurants feel the effect of the LCBO decision. Many owners have told agents that they will not put California wines in their menus, even if the US drink prohibition is finally resolved.
Many restaurants are in favor of the ban, according to Tony Elenis, president and CEO of the Hotel & Motel of Ontario Restaurants.
“In general, Ontario restaurants have supported the government’s decision to eliminate alcohol products from American drinks from LCBO listings,” Elenis said.
It will soon be easier for Canadians to buy alcohol from other parts of the country, thanks to an agreement between the provinces and the federal government that is part of a series of changes to encourage internal trade in the face of US tariffs.
He added that some restaurants can still offer California wines, while they have stocks, but many are highlighting the Canadian wines of British Ontario and Columbia.
Some restaurants are resorting to regions such as Australia, New Zealand and France.
However, Rapuano says that importing a new wine is not a night process. It implies finding a supplier, trying the wines, completing the paperwork, obtaining a purchase and shipping order. “You need six to eight months. I can’t change my business model in a month,” he said.
Meanwhile, Rapuano says that he has not yet received a response from the LCBO with respect to the emails that he sent about his concerns. “I also sent an email to Prime Minister Doug Ford, noting that groceries can still sell Florida orange juice, but I can’t sell California wine,” he said.
