Through a perverse “fixed markup system”, the Liquor Control Board of Ontario increases its revenues by asking liquor producers to charge the LCBO more. So writes Ontario’s Auditor General in his annual report, released today (see section 3.08, beginning at page 186).
According to the AG, when the LCBO decides to stock a new product, it puts out a “needs letter” to suppliers. For each type of product, the needs letter tells suppliers the range of prices at which the LCBO would like to sell the product. That price is not based upon supply and demand. It is based on pure whim (which might explain, at least in part, why the Lagavulin I used to be able to buy for forty some odd dollars now costs well over $100 per bottle, only a few years later). Don’t stop reading: it gets worse. Much worse.