A new report says Ontario could make more money from booze sales if it opened up the business to more retailers. The study by the C-D Howe Institute also says more competition would lower prices for consumers.
It says the government is actually foregoing revenue by preserving its virtual monopoly on the sale of alcohol.
It says Western provinces with more competition had seven per cent more per capita in provincial alcohol profits than those with government-run monopolies.
The report recommends that Ontario allow wine and beer sales in grocery and convenience stores and licence other retail outlets to sell beer. It also says the government should allow all wine retailers to have their own off-winery stores.
``These changes would increase the choices available and reduce prices for Ontario consumers, as well as improve the competitiveness of Ontario's smaller wineries and breweries and generate more revenue for the government,'' it said.
Ontario is the only jurisdiction in North America that limits off-site liquor sales to a chain of government stores, a single private beer retailer and a fixed number of off-winery wine stores, the report said.
The publicly owned Liquor Control Board of Ontario, which pours about $2.5 billion into provincial and federal coffers each year, sells hard liquor as well as beer and wine.
The Beer Store, run by three foreign-owned brewers, also has a quasi-monopoly of beer sales and retail distribution. It generates about $1 billion for the province in taxes.
The high costs of the LCBO _ including salaries and benefits for employees _ are unlikely to shrink without more competition, the report said.
The governing Liberals recently allowed Ontario wine sales in farmer's markets and are experimenting with selling domestic wine in a small number of LCBO boutiques in grocery stores. But they have steadfastly refused to open up sales of wine and beer in the vast majority of convenience and grocery stores, citing social responsibility.
Other provinces have moved away from monopolies, the report said. Quebec allows wine and beer sales in grocery and convenience stores, British Columbia will allow liquor sales in grocery stores next year and Alberta privatized the sale of alcohol 20 years ago.
Almost all retail alcohol in New Brunswick, Prince Edward Island, Nova Scotia, Saskatchewan and Manitoba is sold in government-run stores, the report said. But Manitoba and Saskatchewan allow take-away beer sales in licensed hotels and Saskatchewan said it will allow a limited number of privately held stores to sell booze.