Sunday, May 22, 2011

Where I think V.Q.A. stores should be located

I have been reading around the web recently and there has been some discussion about possibly setting up V.Q.A. stores in Ontario. I am all for it but the current politcal climate isn't friendly towards the idea.
The provincial Conservatives would like to set up stores like this and that is fine but I am not in favour of simply privatizing the LCBO and opening up sales to private vendors. I know we pay higher prices because of monopoly markups and high taxes on product but this money goes into Government coffers and we (as a society) have more control over what these funds are used for. The potential for using funds for the benefit of us all is far greater than letting it line the pockets of a few individuals that would own the disribution outlets (after privatization) and after a period of time certain vendors would rise to the top and come to dominate the market by beating out the competition. This means concentration of market share and no real free market. If you look at any of our major sectors in the economy, the industry cycle starts with many competitors and a very real free market. As time passes businesses compete and innovate with the result of winners and losers. The winners drive out or merge with the losers and the number of competing entities in the industry decreases and oligopolies form and true free markets disappear. Just look at personal computers, operating systems, automobiles, energy, radio, Tv and telecommunictions to name a few. So in my view the LCBO should stay and the problems associated with it should be tackled with regulation change and not outright deregulation.
Having said all this I think that V.Q.A stores should take the form of Kiosks like they do with the big wineries that can distribute their product with grand fathered licenses  outside the winery. They could be located in the middle of customer thoroughfares in malls or in  supermarket chains like Loblaws Sobeys or Metro (and in the same stores as the large winery kiosks) or in big box store outlets like Walmart or even Home Depot (if Harvey's or Mc Donalds can sell there so can a V.Q.A. store).
 The LCBO could be mandated to run these stores (and regulated in how they operate so that small family and boutique wineries get a fair shake in acess to them.) or it could be some kind of industry partnership (with regulation to ensure access to the small players). Lets get this done as a start,  then we can look at the bigger issues of large scale private distribution (like wine and beer sold at Macs Milk) 

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