{"id":10280,"date":"2025-10-27T18:52:04","date_gmt":"2025-10-27T18:52:04","guid":{"rendered":"https:\/\/gosnappy.io\/blog\/?p=10280"},"modified":"2025-10-27T19:40:05","modified_gmt":"2025-10-27T19:40:05","slug":"how-lcbo-wholesale-pricing-changes-affect-ontario-restaurants","status":"publish","type":"post","link":"https:\/\/gosnappy.io\/blog\/how-lcbo-wholesale-pricing-changes-affect-ontario-restaurants\/","title":{"rendered":"How LCBO Wholesale Pricing Changes Affect Ontario Restaurants"},"content":{"rendered":"\t\t
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How LCBO Wholesale Pricing Changes Affect Ontario Restaurants\n<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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October 27th, 2025<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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The Liquor Control Board of Ontario (LCBO)<\/a> is overhauling its beverage alcohol wholesale pricing model, moving from the long-standing “LCBO retail minus discount” approach to a new, industry-standard “cost plus” formula, effective January 1, 2026<\/strong>. These changes are part of a broader shift that will see the LCBO become the exclusive wholesaler of beverage alcohol in Ontario.<\/p>

For Ontario\u2019s restaurants, bars, and other hospitality licensees, this change introduces a new, streamlined pricing structure while maintaining some flexibility for beer purchases. Here is what Ontario restaurant operators should know before these changes come into effect.<\/p>

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\u00a0Summary<\/h4>
  • New Pricing Model: <\/strong>The LCBO is switching to a “cost plus” wholesale pricing model, replacing the “retail minus discount” approach, effective January 1, 2026.<\/li>
  • Calculation:<\/strong> The price is based on Landed Cost + Wholesale Mark-up + COSD (if applicable) + HST + Deposit.<\/li>
  • Tiered Mark-ups:<\/strong> Mark-ups vary by product category (Spirits, Wine, RTD, Cider) and ABV as a percentage of landed cost, while Beer mark-ups are volumetric ($\/litre).<\/li>
  • Hospitality Pricing:<\/strong> Hospitality licensees (restaurants\/bars) use the same new structure and rates, but brewers can set a different supplier quote for their sales.<\/li>
  • Supplier Deadline:<\/strong> Alcohol suppliers must submit new quotes by November 20, 2025, to establish pricing under the new model.<\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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    The Move to a Cost-Plus Model<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    The new pricing formula is designed to simplify the current model, which was complex, involving various mark-ups, levies, and fees that tied the wholesale price to the fluctuating LCBO retail price. The new wholesale price will be calculated using a cost-plus formula: Landed Cost + LCBO Wholesale Mark-up + Cost of Service Differential (COSD, if applicable) + HST + Container Deposit<\/strong>.<\/p>

    The Landed Cost<\/strong> is the supplier quote plus Federal excise tax, import duties, and freight.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    New Wholesale Mark-up Rates<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    The new structure establishes five distinct product categories for pricing purposes:<\/p>

    • Spirits<\/li>
    • Wine<\/li>
    • Ready-to-Drink (RTD)<\/li>
    • Cider<\/li>
    • Beer<\/li><\/ul>

      For Spirits, Wine, RTD, and Cider: <\/strong>The wholesale mark-up will be a fixed percentage of the landed cost, with the rate determined by the product category and its Alcohol by Volume (ABV) tier. A Cost of Service Differential (COSD) is then applied volumetrically ($\/litre) after the mark-up for imported products in these categories. For example, wine with an ABV between 7.2% and 18% would be subject to a 73% wholesale mark-up on the landed cost.

      For Beer:<\/strong> The wholesale mark-up is applied on volume ($\/litre). The rate is differentiated based on the brewery type (Manufacturer or Microbrewer) and the format (Packaged or Draught). For a Microbrewer, the packaged beer mark-up is $0.67\/litre, while draught is $0.61\/litre.<\/p><\/div><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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