11/01/2015 11:03 EST | Updated 11/01/2016 05:12 EDT

LCBO Spent Over $250K Fighting Order To Stop Collecting Personal Info

The LCBO is destroying the personal information of wine, beer and spirit club members that the privacy commissioner said it was wrong to collect — but only after putting up a legal fight.

TORONTO — The Liquor Control Board of Ontario is destroying the personal information of wine, beer and spirit club members that the privacy commissioner said it was wrong to collect — but only after putting up a legal fight that cost more than a quarter of a million dollars.

Now the LCBO is in the process of winding down its wine club program, which allowed enthusiasts belonging to those clubs to buy products that aren't normally available at the LCBO and to get volume discounts.

The Vin de Garde wine club complained to Ontario's Information and Privacy Commissioner in 2012 that the LCBO had started requiring more information beyond members' names and addresses, now including the precise details and quantities of their orders.

The wine club members worried that the LCBO was collecting and tracking their consumption habits, noting that people buy alcohol anonymously in LCBO retail outlets every day.

Consumption was not being tracked, the LCBO said, but it needed the information to process the orders, to be able to recall products and to detect fraud. The LCBO was concerned the wine clubs could stockpile alcohol and illegally resell it.

The LCBO gave evidence of 12 companies that were charged with such violations, but none of those examples was a wine club, the privacy commissioner said.

"The LCBO has not provided my office with much more than anecdotal or hypothetical evidence to support its position that the illegal resale of liquor by wine clubs in this province is so problematic that it necessitates the collection of the personal information of club members," wrote then-privacy commissioner Ann Cavoukian.

Further, the LCBO had managed to process the club's orders since 2004 before requiring the personal information, Cavoukian noted.

She ruled that the information collection violated the Freedom of Information and Protection of Privacy Act, ordering the LCBO to stop collecting it and to destroy what it already had.

The LCBO spent at least $269,845 fighting the order over three years, according to figures disclosed to The Canadian Press through a Freedom of Information request.

The only circumstance in which the commissioner said the LCBO could collect that information is when a wine club member picked up a purchase in person, so the LCBO could confirm that the person picking up the order was the person who placed the order.

A month following the privacy commissioner's 2013 decision the LCBO decided to only allow wine club purchases to be picked up in person. No more deliveries, which is what Vin de Garde's lawyer said was part of the appeal of wine clubs.

"They flouted the order," said Arnold Schwisberg. "What happened as a result of this so-called temporary manoeuvre in 2013, it gutted the wine (club) industry."

Vin de Garde closed and according to the LCBO, there are 31 registered wine, spirits and beer clubs — the exact same number as in 2012.

The LCBO said the process is working well and the agency serves members of several wine clubs that way.

But starting next year, due to a change in private ordering software at the LCBO, it will require anyone purchasing alcohol on behalf of a wine club to get a Manufacturers' Representative Licence from the Alcohol and Gaming Commission of Ontario, said spokeswoman Christine Bujold.

The privacy commissioner, in the reconsideration order, refers to that policy as "a decision to wind down the wine club program."

Schwisberg argued the 2013 policy change may be contempt of court and now that the central case is over, he wants that complaint to proceed.

After the privacy commissioner's original order, LCBO asked the divisional court for a judicial review. The court set the order aside on procedural grounds and sent the matter back to the privacy office. The commissioner's reconsideration decision confirmed the earlier one. The LCBO took that one to divisional court too, but the court dismissed its application.

So the LCBO asked the Court of Appeal to hear the case, but in September the court decided it would not.

Now the LCBO is complying with the original order and destroying the information it collected. It pursued the case through so many steps because it "raised some significant legal issues relating to the application of privacy legislation to certain liquor sales in Ontario," Bujold said.

Schwisberg said the LCBO should not have been collecting the information in the first place.

"They have a monopoly," he said. "But if we're dealing with a government monopoly, by gum that government monopoly should behave fairly and they should not act oppressively when they exercise their powers."

The Crown corporation gives the province approximately $1.8 billion a year in revenue before taxes.


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