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HOW THE PRICING OF BEVERAGE ALCOHOL WORKS AT LCBO

March 22, 2024 – LCBO is proud to offer nearly 35,000 products from more than 80 countries. We bring the best of Ontario and the world to our retail and wholesale customers. When it comes to how LCBO products are priced, there are many variables that inform the prices Ontarians see on store shelves. Here’s how LCBO’s product pricing works: 

  • LCBO publishes bi-annual calls for Wines, Spirits, and Ready-to-Drink products. For our Vintages products, we issue product calls bi-monthly. These calls are posted to our Doing Business with LCBO website. 
  • After a submission review process, which includes which includes a multi-step evaluation process, LCBO will issue a notice to purchase, and then purchasing orders for selected products. 
  • It is at this stage that we request pricing for the product from the supplier. 
  • LCBO requires that any product ordered be made available at a price that is equal to or lower than the price made available to any other government liquor board or government liquor purchasing body in Canada. This requirement is outlined in each purchase order fulfilled by suppliers and helps to ensure that retail prices in Ontario remain competitive. 
  • The retail price is calculated based on the landed cost, which includes the supplier quote, freight cost and any duty or excise. If the quote is in a foreign currency, the rate in effect when the purchase order arrived will be applied. 
  • Under the Liquor License and Control Act, the LCBO is required to set minimum retail prices for beverage alcohol categories and revise them on an annual basis based on the three-year average of the Consumer Price Index.  In collaboration with the Ministry of Finance, the LCBO board determines a standard mark-up for each category. The mark-up covers our cost of operations and the profit from sales goes back to the province of Ontario in the form of a dividend for investment in key public programs and services for Ontarians.
  • Our suppliers set their own pricing (subject to minimum retail prices) and have the option to adjust their retail pricing up or down throughout the year in response to currency fluctuations, federal taxes or freight rate changes, or price changes by their competitors. Therefore, any retail price increases are on a product-by-product basis and determined by beverage alcohol producers.
  • The price seen in LCBO stores or online is a combination of the supplier’s price plus import duties, freight, levies, a standard mark-up, HST and container deposit.   

We are committed to working collaboratively with our producers, helping them to be successful, while generating revenue to support key public programs and services for Ontarians, including health care, education and infrastructure at provincial and local levels.