Scott Stinson: Well, it could be worse. At least Stellantis doesn't make wine
Under Doug Ford, Ontario is "Open For Business." But conditions apply.
By: Scott Stinson
It’s a good thing for Stellantis that the automaker doesn’t also produce wine.
The car company announced last week that it was shifting planned production of Jeep vehicles from Brampton to Illinois, which brought the requisite statement from Ontario Premier Doug Ford about his disappointment over the decision, his intention to keep fighting for local workers, and his desire to withhold subsidies if the company is not going to meet job commitments. All perfectly normal things for a premier to say.
Now, if Stellantis were also in, say, the Cabernet business, Ford would have had a different reaction entirely. Such was the case when the U.K.-based alcoholic beverage giant Diageo announced that it would close a Crown Royal bottling facility in southwestern Ontario in order to streamline production elsewhere.
Ford theatrically poured out an entire bottle of Crown Royal — a stunt that takes longer than you might think — and vowed that if Diageo went ahead with the plant closure scheduled for February, he would use the power of the provincial liquor monopoly to metaphorically whack the booze company over the head.
The LCBO, one of the biggest purchasers of alcohol in the world due to the fact that it is the sole buyer for a province of more than 16 million people, will pull Crown Royal off its shelves, Ford said, “as soon as the last person leaves that plant.”
Then came the even bigger threat: “Then we’ll look at Smirnoff next.”
Nice business you got there, fellas. Be a shame if anything should happen to it.
Until a few months ago, I don’t think it would ever have crossed Ford’s mind to use the LCBO as a cudgel to beat companies that displease him. If anything, the premier had been on a path toward weakening the LCBO’s market dominance, by finally allowing the retail sale of beer, wine and ready-to-drink cocktails at grocery and convenience stores.
But then Donald Trump’s trade war happened, Ford went angry like the Hulk in his determination to fight back, and one of the few concrete actions he could take was to haul American booze off the shelves of the LCBO. This made for a comical few weeks in the spring, when Trump’s tariffs were on, off, and on again, and poor LCBO staffers kept having to stock and then remove all the Californian wines and Kentucky bourbons, but the massive retail operation has kept all U.S. products out of its stores for months now.
It’s been able to do this largely because, let’s be honest here, no one needs to be quite that choosy about alcohol. There is plenty of product available for Ontarians from other parts of the world not led by Donald Trump. I am resolutely pro-bourbon, but I can admit that other whiskies fill that need just fine.
Ford’s use of the LCBO in the trade war hasn’t forced any concessions from Trump, but it has certainly got the attention of state leaders in places like Kentucky and Tennessee, who would very much like the Ontario market to be open to them again.
But the premier’s fight with Diageo is something else entirely. The company’s decision to shutter production in Amherstburg, right next to the U.S. border, is unrelated to Trump and his tariff talk; it’s just doing that thing that big companies often do, which is cutting costs by consolidating operations. That’s unfortunate, obviously, for the workers at the plant, but it’s hardly unusual: much of Ontario’s manufacturing job base has disappeared in recent decades due to automation and overseas shifts. A premier who made so much of his early years in office about Ontario being Open for Business — he even made highway signs! — should know that it’s not very pro-business for a government to threaten a company because it doesn’t like a decision it made about its internal supply chain.
It’s also worth wondering where all of this might go. Ford can threaten to make Crown Royal a bootleg product in Ontario — a throwback of sorts to the Prohibition era, but with the roles reversed — and he reportedly mentioned Smirnoff (also produced by Diageo) as a possible target because it’s a big, recognizable brand. (And if ever there was a tipple that was fungible, it’s vodka. No one is going to pitch a fit if they have to swap Absolut for Smirnoff.) But Diageo makes all kinds of stuff: Johnnie Walker Scotch, Baileys Irish cream, Guinness, Don Julio tequila, Captain Morgan rum, among dozens of other brands. Is he going to make all of that forbidden, province-wide, if Diageo doesn’t cede to his wishes on a single bottling plant? The LCBO also has a duty to, you know, its customers. As does the province to companies that operate in it.
Attracting business to your province, after all, isn’t just about offering tax breaks and incentives. It’s about providing a comfortable investment environment, where companies are left to make market-based decisions without fear of government interference.
Threatening Diageo’s sales, via the province’s arm’s-length liquor agency, seems like the furthest thing from that. It’s the kind of thing, to be honest, that Donald Trump would do.
Scott Stinson writes from suburban Toronto.
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Maybe, just maybe Ford being a doodoo head will precipitate the well-deserved death of the LCBO, this monopolistic monstrosity that charges more because it can.
It’s almost as bad as the mobility and milk cartels and has no place in the 21st century.
It's so weird that Ontario even still has a liquor retail monopoly that is run by civil servants.
Why? Surely the private sector can perform this service much more efficiently and/or cheaper, therefore ultimately bringing in more net tax revenue.
Most of the rest of the world including provinces such as Alberta and Saskatchewan do not see this as so important of a business it can only be performed by the government.
Perhaps Ford would be more pro business if he trusted business to do what business does best and got out of its way? But then we wouldn't earn our well deserved reputation of being overly bureaucratic and risk adverse.