Bacardi, Diageo, Campari and More Owe Over $25 Million to Canadian Government, Judge Rules
Canadian-made alcoholic beverages are displayed at an LCBO (Liquor Control Board of Ontario) location. (Photo: Creative Touch Imaging Ltd./NurPhoto via AP)
A judge has ruled that a coalition of the world’s largest spirits companies owes over $35 million CAD (roughly USD $25 million) to the Liquor Control Board of Ontario.
In May, members of trade body Spirits Canada sued the LCBO after they were accused of disobeying the country’s most favorable customer clause, a law that requires sellers to offer their products at the lowest possible price within the country. Liquor companies were hit with millions of dollars in chargebacks after the LCBO discovered several of their products at lower prices on Quebec shelves. Spirits Canada argued that the MFC clause hadn’t been enforced in a decade, accusing the LCBO of “abusing” its market dominance by “clawing back payments.”
Spirits Canada’s membership is a who’s who of industry heavyweights, including Campari Group, Suntory Global Spirits, Bacardi, Jack Daniel’s-owner Brown Forman and Diageo (Don Julio, Guinness and Johnnie Walker). Their products reportedly comprise nearly 70% of all spirits sold at the LCBO.
On Friday, Ontario Superior Court justice Peter Cavanagh rejected the coalition’s argument. If the suppliers did not wish to be bound by the clause, Cavanah contends that they should have requested an amendment.
“The Applicants are sophisticated commercial entities. They were well aware of Ontario’s regulatory framework when they sold their products in Ontario. When they did so, they were required to comply with the Terms and Conditions of their supply contracts with the LCBO,” Cavanagh wrote.
The seven companies behind the suit have been ordered to pay the LCBO $35.9 million. According to the Toronto Star, smaller suppliers who didn’t participate in the suit were also hit with chargebacks in 2024, with amounts reportedly ranging from the low thousands to millions of dollars.
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