Pricing Updates December 2020 Effective March 2021

Please be advised of the following updates and changes:

Minimum Retail Price Increases

On Monday, March 1, 2021, the minimum retail prices (MRP) for beverage alcohol categories will increase in accordance with Ontario Regulation 116/10 under the Liquor Control Act (see attachment #1). Please note beer rates remain unchanged from the current rates. These updated rates reflect recent amendments to the regulation governing minimum prices. Similar increases to minimum prices took place in past years. The regulation requires minimum prices to be increased by the three-year average of the Consumer Price Index. Updated pricing calculators can be found here.

For suppliers who wish to re-quote, please note the following key dates:

Monday, January 11, 2021 -revised wholesale quote deadline

Monday, February 1, 2021 -wholesale quote revisions effective

Monday, March 1, 2021 -retail price effective

Quotes must be e-mailed to pricing@lcbo.com.

Imported Spirit Pricing (excluding ready-to-drink products)

To align with the new MRP’s, imported spirit suppliers may also request their retail price(s) be forced up. Use the template (attachment #2) to note any SKUs which have impacts to their upcoming LTO’s, price band status, floor price, etc. due to the new MRP’s and require forcing up. This document along with a new quote letter must be submitted to merchandisingsupport@lcbo.com and pricing@lcbo.com by Monday, January 11, 2021. The new retail prices for these products will be forced up on Monday, March 1, 2021. Upon purchase order receipt, prices will be recalculated based on revised quote and rates.

If the LCBO does not receive a revised quote, it will be assumed that the supplier does not wish to have the retail price forced up as stated above. The new retail price will be calculated according to the regular quote increase schedule based on purchase order receipt. Please note that in this latter circumstance, it is possible that any approved Limited Time Offers (LTO) will be cancelled should they fall below the new minimum retail prices.

Limited Time Offers (LTO)

For impacted products participating in the LTO program in P13, the retail price will need to be forced up beginning P12 – February 1, 2021 to meet MRP. Suppliers should review P13 and future LCBO promotional programs to ensure that they adhere to the new minimum floor prices. Products on upcoming promotion falling below minimum retail floor price will be cancelled if not adjusted accordingly. Please work with your category representative should you have any questions on this process.

Spirits Price Bands

Please find attached a list of the new corresponding spirits price bands (attachment#3). To ensure that your product is classified in the appropriate price band and/or to notify the Category Manager of any planned changes to retail price, contact ann.patel@lcbo.com for white spirits or peter.cloutier@lcbo.com for brown spirits by Monday January 11, 2021.

LCBO Cost of Service Rates – applicable to ALL beer products

Please be advised that index-linked increases to the LCBO beer in-store and out-of-store cost of service rates will take effect Monday March 1, 2021. The revised rates are listed in the table below and can be found in our updated “March 2021” pricing calculators here.

Fees ($/Litre)	Current	March 1, 2021
In-store cost of service	$0.6612	$0.6718
Out of store cost of service	$0.1789	$0.1818
Out of store cost of service (draught beer)	$0.1111	$0.1129

 

To administer this change for March 1, the submission schedule for beer price changes will be modified as follows:

• Monday, February 8 – submissions and supplier quotes due by 4 p.m. for March 1 effective

• Monday, February 15 – no price change submissions will be accepted

• Monday, February 22 – no beer price changes; price change submissions will be accepted for March 8 effective

• Monday March 1 – new rates and retail prices in effect, regular submission and price change schedule resumes

For brewers of Ontario beer listed at TBS, LCBO or grocery

To maintain the current retail price, no action is required. The product will be re-priced to reflect the change in Cost of Service, and the supplier quote will be reduced accordingly with no change to the retail price. If a change in price is desired on March 1, please submit the updated Beer Price Submission form.

For brewers of imported beer

Retail prices will be adjusted on March 1 to reflect the change in Cost of Service. To maintain the current retail price for March 1, a revised wholesale quote is required along with a completed Beer Price Submission form. The quote must state: “The supplier will pay to reduce the cost of inventory on hand and on order.” Please note: For products listed at TBS, no changes will be made to licensee prices or pack-up prices unless requested by the brewer on the Beer Price Submission form.

All quotes and beer price submission forms must be submitted via email to pricing@lcbo.com by the deadlines indicated above.

Logistics Average Freight Rates (LAFR) Review

The quarterly review of the LAFR is complete and suppliers impacted by this review have already received notification. Any supplier wishing to adjust their quote as a result of this review should consider all the above changes when submitting a revised quote. Please note LAFR requotes submission dates have been extended to sync with the above changes – quotes are due on January 11, 2021 as per above.

Questions regarding pricing may be directed to pricing@lcbo.com to my attention.

Thank you for your continued support and partnership.