Questions About #MyWineShop Initiative?

Me too! That’s why I was happy to drive to Toronto to attend the “soft” launch of #mywineshop with other wine bloggers. Kicking the event off was the passionate voice of Ed Madronich, Chair of Wine Council of Ontario (and owner of Flat Rock Cellars), with support provided by Hillary Dawson, President of the Wine Council, and Magdalena Kaiser-Smit, PR Director for the Wine Council.

I’ve read the excellent coverage by Rick Van Sickle (here) and Mike Di Caro (here), as well as many of the articles covering it in the news. Yet I still didn’t understand a few things.

Here’s what I learned on my whirlwind trip to TO tonight:

• This is not a new initiative. It has actually been in the works for almost 7 years. There has been a ton of research into the legal aspects, financial aspects, as well as public opinion. Their detailed research done, they firmly believe that the stars are aligned and the time is right to launch this finally.
• Ed likened the resistance to this movement to the same kind of response seen when Ontario first introduced Sunday shopping. There was a lot of outcry at the time, but how many people haven’t availed themselves of this utility these days?
• This is a Win-Win-Win. The government can stop spending capital to build new stores. The province still gets revenue from the wine sales. And entrepreneurs can offer a product that the LCBO doesn’t have room to stock based on customer demand.
  Ontario has some of the lowest per-capita revenue from alcohol sales in North America, behind all but 2 states.
• The Ontario wine industry drives agriculture, manufacturing, construction, and tourism – it really does spinoff multiple benefits to other industries and that money stays in Ontario. We need the existing wineries to thrive and grow.
• There have been 430 stores generated on MyWineShop.ca. At least 75 different MPPs have had constituents build a store and tick the box to send a letter of support to their local MPP. (Have you?)

The questions I still had, and the answers I got follow:

Q: If the LCBO still gets markup AND taxes, how does the wine store proprietor make any money? Just by charging more?
A: They are proposing a model similar to that with licensees (restaurants) today. Restaurants save 10% on the LCBO markup (for local/VQA wines)…they are proposing in their model that 16% goes to the proprietor. For arguments sake, if the markup is 50% today and the new wine shop owner gets 16%, that means 34% markup $$ still goes to the LCBO, and they don’t have to build any new stores – there is no capital spend, no labour charges, and no additional overhead. A pretty sweet deal for the province, and enough of a margin that a wine shop owner can eke out a business.

Q: How do you deal with the FUD in the news that the province will lose money if this happens?
A: They are going to use the facts. For example, when naysayers state that the province will lose revenues, they show that other provinces that have allowed private wine shops have seen an increase in provincial revenues. At a nominal 365 private wine shops, a conservative estimate is that this small number would add $250M a year to the provincial coffers. With no decrease to their existing revenue stream.

Q: What about those that claim LCBO does a better job of protecting society (keeping booze from minors, controlling sobriety)?
A: Wouldn’t an entrepreneur be the most concerned that nothing happens that would endanger his livelihood? Likely even more so than an employee of a large organization who has little personal concern.(For the record, I have to admit having had no problems being served in LCBO stores from about the age of 17 onwards, and recent sensational news items have shown 14 years olds buying hard liquor in multiple LCBO stores in the disguise of a burka).

Q: What do you say to people who think that there will be wine stores lining the streets, and inebriated folks hanging around every neighbourhood where these shops are located?
A: They are talking about 400-500 stores max. If you count all LCBO stores, private wine shops (the ones owned by 5 big wineries that were grandfathered in the FTA) AND restaurants, there are about 20,000 outlets in the province today where you can get alcohol. 400 shops represents A 2% increase. Hardly sounds like a radical increase in availability.

They are organized. They have done their homework. The time is right. Take 5 minutes and head over to MyWineShop.ca. Build a store, pick the wines you like, and fire a note off to your MPP telling them you support the initiative. Just like Sunday shopping, you’ll soon expect and appreciate the convenience of private wine shops.

If you aren’t on Twitter, I’ve added a few of the tweets from attendees at the event tonight: