Wednesday, May 20, 2009

Liquor Boards Run By Amateurs

Because of the massive profits generated by both the Quebec and Ontario liquor boards, the business plans of both agencies are subject to little government oversight. Managers of the LCBO and the SAQ believe that the profits generated are in some way related to their management acumen, rather than the fact that they run a monopoly that any drug cartel would be jealous of.

The fact is that both organizations are bloated bureaucracies where sound management practices that are normal in private industry, don't apply.
  • After years and years of allowing employees to accept gift from suppliers, the LCBO finally decided it was a bad idea and banned the practice this year. LINK
  • The SAQ is currently running a campaign to warn teens that they can't buy liquor if they are under eighteen. Someone in management should pay attention to their media buys, as the advertisements have been heard on classical music radio stations, hardly a hotbed of teenage listeners. On the other hand, the whole campaign is of dubious value. Is there a teenager that doesn't know the minimum age required to purchase alcohol? LINK (in French)
  • The LCBO recently fired some employees for 'stealing' Air Miles points by sliding their own cards through the reader, when customers didn't present a card. The Air Miles program is designed to keep customers loyal by offering a benefit that competitors can't match. The only problem is that the LCBO is a MONOPOLY and doesn't have competitors. While there are privately owned agency stores, they serve smaller communities where the LCBO doesn't operate. LINK
  • When SAQ employees went on strike, two years ago, the company kept about 10% of the stores open by sending in managers as replacement workers. Sales were hardly affected by the closure of 90% of the locations, as customers went to where they had to go, in order to buy their booze. The company actually made more money during the strike than before and as a result, the union caved. You'd think that management would realize that they really didn't need so many locations and would scale back. Not so, locations are expanding. LCBO employees, who are threatening to strike this summer, should take heed.
  • In a wrongful dismissal suit an LCBO employee claims he was fired for reporting discrepancies in the amount of product leaving the LCBO warehouse and what was delivered to retail locations. According to John Alexopoulos, the LCBO's fired manager of retail accounting, an estimated 55 million dollars of product disappeared, en route. His lawsuit says that after he submitted the report, "harassment and criticism from his supervisor intensified and created a poisoned workplace environment." LINK
  • Nothing beats the SAQ scandal of three years ago when management actually asked suppliers to raise wholesale prices. It seems that retail prices were tied to wholesale prices and when the Canadian dollar rose, prices in the stores fell, thus lowering profits. Someone had the bright idea that if suppliers raised prices, profits would be restored. What about the customers, who would have to pay more? Not a concern for the SAQ. When forced to resign, the chairman of the board, Raymond Boucher, blamed partisan politics along with the media for creating a 'storm' around the liquor commission, calling the controversy "unbalanced" and out of proportion. LINK
  • The removal of bags from the SAQ is another dubious decision, given that the balance of inconvenience falls on the consumer. Asked why they don't accept bottle returns, the SAQ answered that there already enough recycling programs in place. When asked why they don't offer a cork recycling program (which the world-wide supply is suffering an acute shortage of) the Commission's answer was 'We're looking into it.'
  • An LCBO executive (who requested anonymity) says the board continues to turn a blind eye to LCBO internal theft of alcohol. "There is so much nonsense going on in the stores," says the source. "There's so much product going out the door, it's really disgusting." LINK
  • In a rare two for one scandal, the Quebec government is accused of appointing a crony to the Board of directors of the SAQ. After the interim president was fired for a trying to browbeat an SAQ store employee into giving her another Scratch'n Save coupon (she wanted a chance a a higher discount) her replacement was a big Liberal party contributor.
  • How hard is it to sell whiskey, when you're the only one doing so? The LCBO 200 needs over 200 employees that make over $100,000 to do so.

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