12/15/2014 12:48 EST | Updated 12/15/2014 12:59 EST

LCBO-Beer Store Deal's Revelation Leads To $1.4-Billion Class-Action Lawsuit


A Burlington, Ont., pub owner has launched a class-action lawsuit over a secretive deal between the province’s monopoly liquor retailer and its monopoly beer retailer.

The lawsuit, filed Friday in the Ontario Superior Court, seeks $1.4 billion from the LCBO and Brewers Retail, owner of the Beer Store chain, the Globe and Mail reports.

The lawsuit has to be certified by the court, but if approved, presumably anyone who has shopped at the LCBO or the Beer Store since the secret deal was enacted in 2000 could join the legal action.

The Toronto Star revealed last week that the LCBO and Brewers Retail signed an agreement in June, 2000, that — among other things — would see the LCBO only sell six-packs of beer, giving the Beer Store the entire market for 12-packs and 24-packs.

That prompted Restaurants Canada, the principal restaurant industry group in the country, to call for an investigation by the Competition Bureau. It also called for the deal to be cancelled immediately.

"We have known of the existence of an agreement for years, but we did not know the depth of the complicity," said Restaurants Canada’s VP for Ontario, James Rilett. "This agreement fixes prices, territories and products."

Though the deal was made under the Progressive Conservative government of Mike Harris, it continued to be enforced under the Liberal governments of Dalton McGuinty and Kathleen Wynne, the Globe reports.

David Hughes, owner of The Poacher, a pub in Burlington, launched the class-action suit after hearing “much anger and concern from both my colleagues in the restaurant business and my customers about these revelations,” according to a statement quoted by the Toronto Star.

The suit, filed by law firm Siskinds LLP, alleges the LCBO and Brewers Retail engaged in a “conspiracy to fix, raise, maintain or stabilize prices of beer in Ontario” and “participated in illegal and secretive discussions and made agreements relating to prices and distribution areas of beer in Ontario,” according to the Globe.

Beer Store president Ted Moroz denied the chain fixes prices.

“Individual brewers independently set their own prices which are approved by the LCBO on a weekly basis,” he said, as quoted by the Globe.

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