This article was migrated from our previous website and, due to its age, some content, images, links, or details may be incomplete or unavailable.
For general inquiries, please contact info@cfig.ca. For questions regarding press releases or media content, please contact marketing@cfig.ca.
For Immediate Release
October 2, 2015, Toronto — New beer licence and credit requirements by both the Liquor Control Board of Ontario (LCBO) and the Province’s Alcohol and Gaming Commission (AGCO) will mean many family-owned independent grocery stores will not have an equal opportunity to be able to bid for the right to sell beer in their stores.
The Province recognized the different challenges faced by independent grocers in a competitive landscape that is dominated by a handful of large corporate chains. That is the reason they set aside, on paper, a certain percentage of licences for independents and established two categories of licences—category A, for chains, and category B for independents. Yet the $7000 fee established by the AGCO does not reflect those differences. The $150,000 Letter of credit unilaterally imposed by the LCBO, will both have a cumulative and disproportionately deeper impact on an independent than a chain.
Obtaining a letter of credit requires that a small grocer, operating on razor thin margins, to essentially ‘park’ $150,000 for the duration of the licence, and can neither borrow nor spend against that $150,000. As well, the grocer must pay the bank approximately $3375 a year.
According to the Canadian Federation of Independent Grocers’ Vice- President of Public Policy, Gary Sands, the imposition of the ‘one size fits all’ fee and letter of credit, “will be a showstopper for many independents. They would be looking at having to sell a huge amount of beer before even recovering the cost of the fees paid to the AGCO and their bank.”
Sands added that this will also not be helpful for the independent craft brewers of Ontario. “Ontario’s craft brewers know there is a lot of symmetry with their businesses and independent grocers,” said Sands. “The independent retail grocery channel is the one that offers the greatest opportunity for growth in the craft beer category.”
CFIG is calling on the Province to revise the fee and credit requirements to be more in line with the realities of retail grocery. Sands said a compromise would be to have a significantly scaled back AGCO fee and eliminate the Credit letter requirement, pointing out that the LCBO agency stores located in grocery outlets, pay no fees nor are they required to provide a Letter of Credit.
About CFIG
The Canadian Federation of Independent Grocers (CFIG) is a non-profit trade association founded in 1962 which continues to be a collaborative community, equipping and enabling independent, franchised and specialty grocers for sustainable success. We act as a strong and united voice for over 4000 independent grocery retailers, across Canada, providing programs for operational excellence and fostering solid relationships among retailers and suppliers.
For more information, contact:
Gary Sands,
Vice-President Public Policy, Canadian Federation of Independent Grocers
E: gsands@cfig.ca T: 416-409-7882 W: www.cfig.ca
