The Liquor Control Board of Ontario is now facing a lawsuit from several prominent alcohol conglomerates only days after ending its first ever province-wide strike.
Spirits Canada filed a court application with the Ontario Superior Court of Justice to declare what it’s calling a “controversial LCBO-pricing term invalid and unenforceable.”
The lawsuit is in response to the LCBO’s “contradictory pricing policies” that were adopted by the retailer last year, allowing for suppliers to be penalized for non-compliance.
Crown Royal, Canadian Club, JP Wiser’s, Forty Creek, Bacardi and El Jimador Tequila are all among the suppliers involved in the lawsuit.
In addition to the lawsuit, the suppliers have also contacted the Competition Bureau of Canada, claiming that the LCBO’s enforcement of its pricing policy is “an abuse of dominance with major anti-competitive implications for pricing and product choice impacting all Canadian consumers.”
The allegations have not been tested in court.
“As spirits suppliers, we have always appreciated our longstanding strategic partnership with the LCBO,” said Spirits Canada president and CEO Cal Bricker in a statement.
“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.”
The suppliers said they’ve been trying to find a path forward with the LCBO outside of court.
The LCBO said in its own statement saying it is “aware of legal action taken by certain suppliers represented by Spirits Canada regarding select product pricing in Ontario.”
However, the Crown corporation called the claims made by Spirits Canada “inaccurate and highly misleading to consumers.”
“The fact is that when suppliers do not honour our legal agreements on consumer protection, the only people that lose are Ontarians,” said the LCBO on Wednesday. “By breaching the terms contained in our Purchase Order Terms and Conditions that require that LCBO receive the same or lower price as other Canadian liquor jurisdictions.”
The LCBO said its customers are unfairly made to pay more for alcohol than other Canadian consumers across the country.
“These are not retroactive tax bills, fines, nor penalties, but rather pricing chargebacks levied in accordance with terms of our long-term contracts,” reads the LCBO statement.
The liquor retailers said that their position remains that it would “not be fair to let a few suppliers gouge Ontario consumers.”
Spirits Canada represents almost 70% of all spirits sold by the LCBO and close to 35% of the retailer’s total products.
The Competition Bureau confirmed to True North it received a complaint, but declined to comment on the application with the Ontario Superior Court of Justice, to which the bureau is not a party.