Two weeks ago The Canadian Press had a story about the LCBO raising their price points on wine. The article, based in part on the board’s annual report, ostensibly points to the boomer market as the reason. This was no surprise to me because I have seen the LCBO-monopoly make product decisions against my preference several times.

Then, Friday of that week, the Globe ran a story about the LCBO changing its plans and also dropping the price floor for new products.

LCBO shifting focus to pricier wine, spirits to meet demand of boomers The CP 13 Jan 2008

Sales of wines priced between $12 and $15 drove up sales $17.6 million, says the LCBO’s most recent annual report, which vows to “trade consumers up beyond the $8 price point for a 750 ml bottle.” Wines priced between $15 to $20 jumped by 15 per cent, accounting for $64 million in sales for 2005-06.

[...]

“A single malt will carry a price tag that might be double or triple that of a blended scotch,” said Layton, adding consumers can thank baby boomers for driving this trend.

The Globe article reported a reversal and had to credit its own columns.

LCBO flips anti-plonk policy TGAM Section L Page 1 18 Jan 2008

In a break with a controversial buying strategy that had placed increasing emphasis on premium brands, the Liquor Control Board of Ontario has dropped the price floor for new product submissions, paving the way for a potential cornucopia of cut-rate quaffers costing as little as 6.95 from such value regions as Portugal, Australia and South Africa.

The about-face comes in the wake of consumer complaints received by the LCBO in recent weeks, many prompted by two columns appearing in The Globe and Mail that revealed an explicit policy by the government agency to promote premium-priced wines at the expense of emerging high value imports.

You can read more pieces of the Globe article, which is now behind a pay wall, at Bernie’s blog who cut and pasted more of it. In 2008, wine is going to get cheaper at the LCBO (good news for under $10 fans!)

If the LCBO was trying to serve higher demand for higher priced wines that doesn’t preclude also offering low-price, high-value wines. Part of what the earlier article describes is the monopoly raising the lowest price, essentially forcing people looking for the least expensive bottle to pay a higher price and give a larger margin.