Bob Downey, Senior Vice President, Sales & Marketing for the Liquor Control Board of Ontario, has issued a letter that promotes aseptic packaging for wine and announces new filliing capacity in the province.
The LCBO letter announces that it is, “…pleased to advise that new Tetra Pak filling capacity will soon be available in Ontario, to package wine from Ontario and around the world.” (emphasis added).
For a while, critics were miffed at the amount of effort being expended by the LCBO in its push for Tetra Paks. It has staved off a deposit-refund system for 15 years easily without resorting to this kind of activity. This announcement makes the agenda behind the LCBO’s Tetra Pak initiative clear — this isn’t about avoiding a deposit-refund system, avoiding blue box fees or positioning itself as “being green.” This is about the LCBO creating a new wine category that is highly profitable for it.
Consider that this proposed Tetra Pak facility will also package import bulk wines, and also consider that under the federal Importation of Intoxicating Liquors Act the LCBO must be the import agent, which means that it is the de facto brand-owner of the imported bulk wine. In essence, this Tetra Pak agenda is about the LCBO getting into sponsoring the production of products that will be its house-brands in everything but name. If the LCBO manages to have complete discretion in how these bulk imported wines are marked-up for sale they will be enormously “profitable” — bought at low bulk prices and marked-up as “premium” wines. (Note the LCBO’s ongoing communications positioning Tetra Paks as a premium package.)
For Ontario producers this will also mean the LCBO will give preferential treatment in its stores, even if Ontario producers choose Tetra Paks they will have to be price competitive with bulk wine imported cheaply and sold as premium (something very to difficult to do when facing low cost and highly subsidized producers such as those in South America).
Here’s the letter:
March 14, 2006
To All Trade Councils:
I am pleased to advise that new Tetra Pak filling capacity will soon be available in Ontario, to package wine from Ontario and around the world.
A number of suppliers have advised the LCBO that they are interested in offering products in this format but are unable to do so because of a lack of available packaging capacity. In response, the LCBO has been working to facilitate the creation of such capacity in Ontario, so that our suppliers can offer even more choice in this popular and environmentally-friendly package format.
The LCBO continues to encourage suppliers to bring forward products in alternative package formats that generate less waste, as part of our plan to eliminate 10 million kilograms of waste annually.
For more information regarding the LCBO’s product needs please contact the LCBO’s Wines and Vintages business units as you would for or any other new product proposal.
For more information on LCBO’s policies and procedures regarding the use of these facilities for packaging products approved for purchase by the LCBO, please contact Lyle Clarke, Project Leader, LCBO Environmental Strategy at (416) 864-7718 or by e-mail at email@example.com.
Contact information for the two Ontario companies that are establishing such facilities in Ontario are attached, for your information.
Senior Vice President
Sales & Marketing