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Wednesday, July 27, 2011
LCBO could teach Capone a few tricks
TORONTO - If only Al Capone could have got some advice on how to run his bootlegging racket from the LCBO.
On a 750 ml bottle of rye, rum, gin, scotch or vodka the markup is obscene. A chart from distillers, secured by the Canadian Taxpayers Federation, reveals a $25 bottle known as a 26er without all of the middlemen and taxation starts out costing the LCBO $5.52.
And that includes the distillers’ production, delivery costs and their profit, too.
Ontario’s alcohol markup numbers are so staggering no wonder the Ontario government will never give it up.
But how does it get to $25?
The first ding on that bottle is $3.51 for federal excise. Then the LCBO marks it up $12.72 and there is a 29-cent bottle levy and a nine-cent environmental levy. Now the price of a bottle is $22.12.
Next comes the 13% HST — $1.11 for the GST part, then another $1.77 for the PST.
It’s almost 400% more than its original cost.
Capone would blush in his grave. He never made those kind of numbers and he had more competition and risk, too.
“A crook is a crook, and there’s something healthy about his frankness in the matter,” the gangster once said. “But any guy who pretends he is enforcing the law and steals on his authority is a swell snake.”
There doesn’t seem to be a lot of interest from the attorney general in taking a look at this price fixing.
Meanwhile the publicly owned LCBO, the largest purchaser and retailer of alcohol in the world, is overloaded with freeloaders, many of whom with familiar names are connected to power players in government.
Just look at this year’s $100,000 a year sunshine list club and you will find 256 LCBO executives on it — topped off by president and CEO Bob Peter’s $431,402.58 to go with $16,263.46 in bonuses.
But even some of the cash or stock people at the stores are earning with benefits, night and Sunday premiums and overtime close to the same money as some cops and teachers.
This is a tough time for most in retail. Not for the LCBO. In the 2010/11 fiscal year the LCBO celebrated on the backs of its sucker and unfairly gouged customers a record profit with revenues of $4.55 billion which after taking out its fat costs turned over $1.55 billion to the incompetent government led by orange-juice drinking Premier Dalton McGuinty.
Now these would be impressive performance numbers if it wasn’t a monopoly which punishes Ontario wineries in favour of foreign products where they can get higher yield.
It means these LCBO fatcats regularly travel and get literally wined and dined by the vineyard, spirit and beer companies and yet in communist style won’t stock popular Ontario and Newfoundland product Crystal Head vodka because it’s in a skull bottle.
“These guys do all right everywhere, I can guarantee you,” said one Toronto LCBO store manager who said most stores brings in profit margins of 40 cents on every dollar.
“The government’s taxation is drinking us under the table,” said Canadian Taxpayers Federation national research director Derek Fildebrandt. “It’s nothing but a heist.”
CTF federal and Ontario director Gregory Thomas pointed out that “Ontario drinkers pay a lot more for liquor than New Yorkers” and what he’d like is transparency where “all the taxes are itemized on every receipt, including the markup charged by the LCBO.”
Capone at least eventually did some prison time. So what is going to be done about this?
Nothing. If McGuinty wins the fall election it will remain as is and it likely will if Tory Leader Tim Hudak becomes premier. He had plenty of opportunity to comment on a poll that shows Ontarians want beer and wine in corner stores but stayed away from it.
Hudak should win the election because of how rotten a premier we have in McGuinty but afraid of making a John Tory mess-up is playing it safe.
Whether it be through privatization or allowing more competition, what he should be saying is he would give back the excess hundred of millions stolen from LCBO consumers.
Even Capone didn’t ding his customers this abusively.