Ontario could be paying $20M a year to keep banned U.S. booze in storage | CBC News

"Ontario could be paying roughly $20 million a year to not sell a hefty stockpile of delisted U.S. alcohol it already owns, according to a Brock University operations expert. Michael Armstrong is an associate professor at Brock who studies operations and logistics. He has researched alcohol sales trends as part of his work on how they interact with sales in the cannabis industry. He estimated the annual carrying costs associated with storing $79.1 million worth of delisted U.S. alcohol, including warehousing, insurance, security and tied-up capital, could range from roughly $10 million to $30 million annually."

""We're willing to spend $20 million a year to not sell your booze," he said. "Is that worthwhile? I have no way to judge that." Armstrong said he settled on $20 million as a "ballpark" estimate based on a common industry rule of thumb: annual inventory carrying costs often roughly equal to a quarter of the product's value. "You would find it in an introductory textbook," he said. "If you don't know what your costs are, here's a number that might be in the right realm.""

"The LCBO did not respond by deadline when asked how much taxpayers are spending to store roughly $79.1 million worth of unsold U.S. alcohol. Staff at a Toronto LCBO remove American wine and spirits from store shelves on March 4, 2025. (Evan Mitsui/CBC) In November, records obtained by CBC News through Ontario's freedom of information act revealed the scale of the LCBO's stockpile, though large portions of the documents were heavily redacted. CBC News has contested the redactions by the Crown corporation with Ontario's Information and Privacy Commissioner."

"Armstrong said the LCBO, like the Ontario Cannabis Store, often operates with a high degree of secrecy, though he questioned why broad details about the inventory would need to be confidential. "I don't think there's any particular reason to withhold that informat"

Ontario could pay about $20 million per year to avoid selling a $79.1 million stockpile of delisted U.S. alcohol already owned. Estimated carrying costs include warehousing, insurance, security, and tied-up capital. The estimate is based on an industry rule of thumb that annual inventory carrying costs often approximate one quarter of the product’s value. The LCBO did not provide a response by deadline about how much taxpayers spend to store the alcohol. Records obtained through Ontario’s freedom of information process showed the inventory’s scale, with many parts heavily redacted. The redactions were contested with the Information and Privacy Commissioner. An operations expert questioned why broad inventory details would need confidentiality.

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