Working With the LCBO: How to Sell Alcohol in the Province of Ontario

In the Province of Ontario, the alcohol beverage market is fully regulated and operated by the Liquor Control Board of Ontario (LCBO). In order to export alcohol to Ontario, you are required to work with the LCBO. As the single largest buyer of alcohol in the world, the LCBO operates approximately 654 retail stores across the province, and has its own set of operating procedures, entirely separate from those of other Canadian provinces. Trayvino Wine Company is fully licensed by the AGCO (Alcohol and Gaming Commission of Ontario) and works with producers and suppliers to export and market their products in Ontario. 

There are four primary channels used to enter the Ontario market: (Duty free is also an option and regulated)

1. Specialty Services

Specialty Services is broken down into two programs. The main one is the Consignment Program (High Volume and Consignment). The LCBO assigns warehouse space to an agent and limits the number of cases which can be held there. The agent is free to import any products, at any price point, within the space limits assigned. Products are then sold by the agent directly to restaurants or private consumers. The second option allows products to be ordered directly for clients on a pre-order basis. The wine is imported specifically for the customer and no additional stock is kept. Wines are required to pass the LCBO Lab testing and some shipping restrictions apply.

2. LCBO Retail 

This channel offers suppliers high volume sales through one of two LCBO divisions:  Wines (previously known as General List) or Vintages. The Vintages program is the fine wine unit of the LCBO, offering customers a premium selection. Products are offered as a one-time release. Products that perform well must still resubmit an application to be released in the future. The Wines program offers suppliers an opportunity of on-going business, providing the product meets an annual sales target preset by the LCBO. Products featured in this category are generally cheaper and more commercial than ones purchased by LCBO Vintages, with strong brand appeal for the consumer.

For both the Vintages and Wines programs, the LCBO periodically announces sets of tenders specifying the types of products they’re looking for and the desired retail price. This can include products of a certain country and/or region, type, grape varietal, price point, etc. In order to participate in LCBO tenders, a supplier must appoint an agent (eg. Trayvino Wine Company), who then participates and processes the application on their behalf. There is no upfront cost or risks associated with participating in a tender. Working with the LCBO and the Government of Ontario also eliminates any risks associated with payments.

In 2019-20, the LCBO Annual Report states total sales of $5.9 billion, with Wines accounting for $1.674 billion.

3. Licencee only Channel

This channel offers the opportunity to have a listing through the LCBO that is exclusive to restaurants, bars and hotels. This channel offers suppliers an opportunity of on-going business, providing the product meets that annual sales targets preset by the LCBO. Products are required to meet the LCBO packaging and shipping criteria for all brands processed in this channel.

4. LCBO Wholesale - Grocery Channel

This channel offers suppliers the opportunity to have products sold through the grocery stores throughout Ontario. In order to apply, the LCBO periodically announces sets of tenders specifying the types of products they’re looking for and the desired retail price. This can include products of a certain country and/or region, type, grape varietal, price point, etc. In order to participate in LCBO tenders, a supplier must appoint an agent (eg. Trayvino Wine Company), who then participates and processes the application on their behalf. There is no upfront cost or risks associated with participating in a tender. Working with the LCBO and the Government of Ontario also eliminates any risks associated with payments.

Working with Trayvino Wine Company LTD
As an wine agent, Trayvino Wine Company participates in tenders and promotes/markets brands on behalf of our suppliers to consumers and in the On-trade(On Premise). We provide guidance through the various requirements of the LCBO including communications, labelling, case specifications, lab work and much more. We offer a proven track record of selling a variety of products, at various price points, to all channels of the LCBO, providing on-going business for our suppliers.

Wineries: you can sign up for iSupplier once you are set up with the LCBO.

Suppliers have online access to their LCBO payment information. iSupplier offers instant access to your Purchase Orders, Invoices and Payment information through a secure, password-protected portal.

iSupplier is a self-service portal that's easy to use and lets you download information in a spreadsheet format.

You will be assigned a user name and password. You may apply for user names and passwords for more than one individual in your organization, however each user name and password is to be used by a single person.

• An on-line User Guide will be available upon receipt of your password.

iSupplier Training Videos (Need browser IE 9+/Firefox/Opera/Chrome/Safari) are available on the LCBO website: http://www.doingbusinesswithlcbo.com/tro/Web-Systems/iSupplier.shtml

LCBO Consignment Program Guidelines

Program Description:

This paper provides an overview of the LCBO Consignment Program. The program enables suppliers and their Ontario agents to provide LCBO customers with convenient access to brands not purchased for sale in LCBO retail outlets. Under the program, the LCBO may place orders with participating suppliers at the request of a participating Ontario agent, arrange shipping, and warehouse product in Ontario. Participating agents may then solicit customer orders for the product, in case lots, and arrange timely delivery to the customer.

In order to ensure appropriate and cost effective management of inventory held in Ontario by the LCBO for this purpose, the LCBO has established eligibility criteria and performance standards for agents and suppliers interested in participating. Ordering privileges are earned (and retained) by an agent achieving specified sales and inventory performance standards for their suppliers’ products.

“Niche-product” exception orders will be allowed but limited to a maximum of 3 orders per month less than 15 cases for skus with a consumer price of $35 a bottle or more (to be seized for retail sale after 30 days). These products are to be included in the agent’s allowable maximum inventories total. The LCBO reserves the right to amend these tier requirements from time to time as needed to meet operational requirements.

LCBO Services and Fees

Participating agents pay fees for storage as indicated below,

Free storage for the first 60 days beginning upon release of items for sale in the warehouse.

$ 1.50 per case per month between days 61 and 90

$ 2.20 per case per month between days 91 and 120

$ 4.10 per case per month between days 120 and 150

$ 6.50 per case per month between days 151 and 180

Where any portion of a Shipment has not been sold within 180 days of the release date, the unsold liquor products may be discounted in price by 25% from the amount originally provided for in the LCBO’s purchase order issued to the supplier and such products may thereafter be resold by the LCBO through it’s normal retail channels or otherwise disposed of in its discretion. Any remaining inventory not acquired for sale through the LCBO retail system may be destroyed or returned to the supplier at the expense of the agent.

If any inventory of an SKU is reduced in price, sent for destruction, returned to the supplier or transferred to another jurisdiction, no new order shall be placed for that SKU for at least 12 months thereafter. Agents will be responsible for additional charges as outlined in schedule, “A” which may be amended from time to time at the discretion of the LCBO. Payments to vendors will be made by the LCBO upon depletion of the purchase order.

Product returns will be accepted by the LCBO up to six months after the sale.

Trade samples may be purchased by the agent at full retail cost.