Over the last year, the LCBO has fined suppliers – including some of the biggest booze conglomerates in the world – well over $100 million, saying that they’d breached the controversial "clause 14."
The individual fines, according to industry sources, have ranged from a few thousand dollars, to well over $1 million.
In May, Spirits Canada threatened to pull some of its products from LCBO shelves, and also said it was considering legal action against the provincial agency.
Spirits Canada said its members are considering everything from pulling some of their products out of Ontario to a potential lawsuit.
Spirits Canada’s members produce roughly 70 per cent of the spirits sold in Ontario, and some of the world’s most widely-recognized alcohol brands, including Crown Royal whisky, Bacardi and Appleton Estate rums, Don Julio tequila, Tanqueray gin and aperitifs such as Campari and Aperol.
After months of conversations with the LCBO over two previous sets of fines, Spirits Canada said its members are concerned that the fines — which can be issued roughly every three months — will continue.
This is a developing story.
Spirits Canada has sued the LCBO, saying the provincial liquor monopoly is unfairly fining suppliers over a contractual clause promising to charge it the lowest price in Canada.
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Some of the biggest booze conglomerates on the planet are taking the LCBO to court, saying the provincial liquor monopoly is unfairly fining suppliers over a contractual clause promising to charge it the lowest price in Canada.
The booze producers — including Diageo, Campari Group, Beam-Suntory and Brown Forman — have also reported the LCBO to the federal Competition Bureau, saying the clause is an abuse of the agency's market dominance and is a restraint of trade.
"We are disappointed that we have had to refer the LCBO's contradictory policies to the courts, but at this time, and amid retaliatory measures by the LCBO, we have been left with no other options," Spirits Canada CEO Cal Bricker said in a press release.
The suit, filed in Ontario Superior Court Tuesday, says the LCBO didn't enforce the clause for a decade, then began actively enforcing it in 2023. Continued enforcement of the clause would result in higher booze prices than necessary across the country, including Ontario, the suit alleges.
"The Disputed Provision would inflate retail liquor prices across Canada to an unreasonable extent, by requiring Suppliers to raise prices they charge in other jurisdictions," the booze companies argue in an application to toss out the clause.
The LCBO didn't immediately respond to a request for comment on the legal action or the Competition Bureau complaint.
The move comes just a day after
LCBO stores opened up following the first strike in the agency’s history.