Beverage Alcohol System Review (BASR) Highlights

My latest article for NOW Magazine appears in print today.   Familiar whine (I don’t pick the headlines) recalls an Ontario government-sponsored report that recommended the province rid itself of the LCBO to allow for a more robust, competitive, private system that would actually deliver substantially more revenue to the provincial treasury.

Because the article devotes much of its space to explaining the review, many of the more compelling quotes found in the Strategy for Transforming Ontario’s Beverage Alcohol System aren’t included.

The Liberal government spent more than half a million taxpayer dollars funding a four-person, expert panel, led by no less than a former LCBO Vice-Chair and featuring the then-Commissioner of the OPP.   A whole hell of a lot of consultation and careful consideration went into this.  It deserves a better fate than it received.

Ontario Ministry of Finance Website
It’s all there… if you search for it

For your reading enjoyment, some highlights of what the most seemingly unbiased, consultative review of Ontario’s Beverage Alcohol System had to say about our antediluvian system:

The challenge you put to us was to determine if the beverage alcohol system is delivering the maximum benefits to the people of Ontario. It is not.” – BASR, 2005

If we could go back to the drawing board, no one would design an ideal system this way,” – BASR, 2005

We have found that the current system falls considerably short of generating the maximum return for taxpayers.” – BASR, 2005

“Monopolies lock up economic value, and uncompetitive markets hold back innovation and value creation, leaving untapped revenue ‘on the table.’” – BASR, 2005

After 78 years, change is long overdue. It is time to transform Ontario’s beverage alcohol system for the 21st century.” – BASR, 2005

We conservatively estimate that, following a transition period, this plan would produce at least $200 million more government revenue than the government currently receives from the beverage alcohol system.” – BASR 2005

An open, competitive beverage alcohol system would increase market access, flexibility and opportunities for producers of wine, beer and spirits. Since the present system heavily favours the largest producers, these changes would especially benefit smaller producers.” – BASR 2005

A restructured system would improve market access, opportunity and flexibility for Ontario beverage alcohol producers.” – BASR 2005

For decades, Ontario has made minor repairs to the beverage alcohol system when a complete overhaul was needed. Change is overdue.” – BASR 2005

We believe this revenue, which we estimate to be in excess of $200 million annually, should accrue to the people of Ontario.” – BASR 2005

We expect that this option would encourage mass-market organizations (such as grocery stores) to enter the system. We expect their participation to result in substantial operational efficiencies.” – BASR 2005

A more open marketplace would keep prices competitive and increase selection and convenience for consumers. In order to attract and keep customers, retailers would strive to give consumers what they want.” – BASR 2005

In particular, extensive government ownership and operation of the system are not necessary to maintain social responsibility.” – BASR 2005

In addition, a more flexible and open wholesale system would go a long way towards addressing the access concerns raised with us by small producers and import agents. These stakeholders pointed out that they are at a disadvantage in getting products in front of consumers in the current system.” – BASR 2005

The consumer would be the focus of a transformed beverage alcohol system. Within the bounds set by regulation, consumers would ultimately decide, through the marketplace, what products are offered, where they are sold and how much they cost.” – BASR 2005

Boutique liquor stores might well open in some neighbourhoods. For example, stores could specialize in product categories such as Ontario VQA wines, single malt Scotch or craft beers.” – BASR 2005

It is probable that the new licensees would have much lower operating costs than the LCBO” – BASR 2005

Apart from the emphasis on social responsibility, the most powerful theme was the need to increase access, opportunity and flexibility in the system. All but the biggest producers worry about barriers to the market that cast a shadow over their future ability to reach customers and to respond to changing consumer expectations.” – BASR 2005

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