Why I can’t afford to sell at the LCBO

two clear wine glasses on brown wooden table

I’ve had many people ask why I don’t sell my cider at the LCBO or tell me that I should get it listed with them and I’ve debated with myself about writing this article but I feel that people should know how important it is to support your local businesses and this is certainly the case with small cideries (not just mine) in Ontario.

The truth is, I can’t afford to sell it with the LCBO. I’m a small producer, like really small so I can’t guarantee a quantity to get general listed, available to any LCBO in Ontario. But what about the local LCBOs? Again, here I have debated. On one hand, it is a great way to market myself and let people know I exist in the area. On the other hand, if I sold my products with the LCBO, they keep 41%. As an example, if I sell a product for $10, they get $4.15 and I get $5.21. (There are other taxes and the bottle deposit in there that make up the balance.) Granted they would incur the overhead and labour to sell it for me but $5.21 doesn’t leave me with a lot to cover my own expenses. You know, the expenses to actually make the cider considering the empty bottle itself is close to $1.50 to buy. 

Now, you may be thinking, why don’t you sell it at restaurants? Great idea and again I would love to…. However cider is in a funny (not really funny at all) taxation category in that it is considered a wine. That isn’t the bad part, I mean cider is made like a wine, so that’s understandable and when they made the laws surrounding alcohol, cider wasn’t really a big thing so lumping it in with wine worked… at the time. The catch is, in order to not be taxed at a high rate, cider needs to be classified as VQA, (Vintners Quality Alliance), meaning it needs to be made with 100% Ontario grapes. Now, I don’t know about you, but I’m pretty sure apples will never be grapes and thereby never qualify for a lower tax rate. So if I sold my cider to a restaurant I owe the LCBO 38% of the selling price rather than 20% if it were VQA. Using my $10 example, if I sell to a restaurant, rather than keeping $7.02 if it were classified as VQA, I get to keep $5.33, which is slightly better than selling at the LCBO but still not great. 

Now, surely, surely the government would know this and do something to make it more fair. In fact, I even wrote to provincial members of government to highlight this. But a) only two people ever wrote back (thank you) and b) they mention The Small Cidery and Small Distillery Program as the solution and then pass me off to another department to ‘help’. Surprise, no one got back to me. The problem with their ‘solution’ is that it is a pool of money and any small cider producer (under 3 million liters is considered small) that sells to a restaurant will get up to $0 .74/liter back. Problem solved right? No. There is a cap to the money. As more and more producers sell to restaurants, the pool of money gets smaller and smaller and you might only get $0.40/L back. It does help but certainly doesn’t solve the unfair taxation that cider faces. And this program doesn’t apply to selling at the LCBO. 

I’m not saying cider should not be taxed, that will never, ever happen. I’m not naive to believe that. But why is it taking so long to make a simple change? It is so frustrating to many in the cider industry that we have been asking for equal taxation and have been asking for YEARS and still nothing has happened. Why can’t they amend the law to make cider that is made with 100% Ontario apples be taxed like a VQA wines? Or have cider taxed like craft beer? If the government can change the law to make a buck a beer happen, why is it taking so long to make taxation fair for the cider industry? 

This is why I can’t afford to sell with the LCBO. Not because I wouldn’t like to but because I’m small and unless I vastly increase my output (I’m one person here so not likely) there is no way that it is economical for me to do so. And let me be very clear, I have NOTHING against the LCBO or the people that work there, it is the laws that they have to enforce I have issue with.

This is why it is SO important to support your local cidery (or any local business) no matter where you are in Ontario but if you’re in Windsor/Essex, stop by! 

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