You may have seen media coverage related to LCBO collecting monies owed from some suppliers, in relation to a breach of contractual obligations. LCBO has posted a formal statement, and we’d like to provide you with some additional context.
LCBO cannot negotiate pricing with suppliers, as doing so could compromise the fairness and transparency of our purchasing process as a public entity, and so, and as is standard for retailers with significant purchasing power, we take measures to ensure we offer Ontarians competitive pricing. As you are aware, Section 14 in our Purchase Order Terms and Conditions outlines the requirement that any product ordered be made available at a price that is equal to or lower than it is made available to any other government liquor board or government liquor purchasing body in Canada. This has been in place for many years, is reinforced in various ways, and we appreciate that it is followed by most of our suppliers.
We found reason to believe that a small number of suppliers were not in compliance with this requirement and are working directly with them to meet the terms of their legal contract with LCBO. These are not “fines,” rather amounts owed to LCBO based on contractual obligations.
We want to thank over 90 per cent of our suppliers for whom this has never been an issue. We also want to thank the majority of suppliers who we had reason to believe were out of compliance and have been working directly with us to remediate the issue, either by confirmation that we received the required price or working on payment conditions to settle the difference in their accounts. We appreciate the acknowledgements we’ve received on the collaborative and flexible nature of this process.
As a Crown agency and as a good business partner, we must treat our suppliers fairly and consistently. We pride ourselves on the strong partnerships we build with our suppliers, as together we deliver the best possible customer experience for Ontarians.
Abhay Garg, VP, Merchandising