Overview
The LCBO (Liquor Control Board of Ontario) brings in about $2.5 billion each year for the Ontario government. Let’s break down how it earns that money, focusing on retail stores and other sources of revenue.
Main Sources of Revenue
Retail Stores
- Revenue: $5.87 billion (80% of total revenue)
- Description: LCBO’s 680 retail stores and online sales.
Other Sources
- Licensed Establishments (bars, restaurants, venues): $598 million
- Grocery Stores: $410 million
- LCBO Convenience Outlets: $252 million
- The Beer Store: $229 million
- Duty Free and Other: $41.71 million
Gross Sales Revenue Breakdown (2023)
- Total: $7.41 billion
- Retail Stores: $5.87 billion
- Licensed Venues: $598.28 million
- Grocery Stores: $410.12 million
- LCBO Convenience Outlets: $252.01 million
- The Beer Store: $228.74 million
- Duty Free: $25.85 million
- Other: $15.86 million
Net Income
- Total Sales: $7.41 billion
- Product Costs: $3.78 billion (supplier charges, excise tax, freight)
- Expenses: $1.19 billion (labour, administration)
- Net Income: $2.46 billion (goes to the provincial government)
Product Sales Breakdown (2023)
- Spirits: $2.75 billion (Net Margin: $1.61 billion)
- Wine: $2.54 billion (Net Margin: $1.17 billion)
- Beer: $1.41 billion (Net Margin: $568 million)
- Ready-to-Drink Products: $690.58 million (Net Margin: $309 million)
Pricing Examples
Canadian Whisky (750ml)
- Supplied for: $7.13 (including freight)
- Federal Excise: $3.99
- LCBO Markup: $15.54
- Other Levies: $0.38
- HST, Deposit: $3.71
- Shelf Price: $30.75
Ontario Wine (750ml)
- Supplied for: $5.71 (including freight)
- Federal Excise: $0.53
- LCBO Markup: $4.46
- Other Levies: $1.51
- HST, Deposit: $1.79
- Shelf Price: $14.00
Impact of Grocery Store Sales
- LCBO’s Take: Lower in grocery stores due to a 10% wholesale discount
- Example: $14 bottle of wine
- LCBO Store: $5.97
- Grocery Store: $4.75
Future Changes
Convenience Store Sales
- New Plan: All convenience and grocery stores can sell alcohol
- Current Status: LCBO makes more as a retailer than as a wholesaler
- Government’s Claim: Revenue will increase
- Concerns: Less income from grocery store sales compared to LCBO stores
Taxes vs. LCBO Revenue
- Alcohol Taxes in Ontario: $600 million annually
- LCBO Revenue: $2.5 billion annually (excludes alcohol taxes)
- Federal Government: $1.68 billion from excise taxes, customs duties, HST (partly returned to Ontario)
Conclusion
The LCBO significantly contributes to Ontario’s revenue, primarily through its retail stores. However, future changes allowing alcohol sales in more grocery and convenience stores might impact the total revenue. The government claims the changes won’t hurt, but there are concerns about potential revenue loss.
References
- CBC News
- LCBO Annual Report for the 2023 Fiscal Year