Canada Post's flat rate alcohol delivery fee said to be 'not fair'
Not everyone is toasting the delivery deal struck between Canada Post and the LCBO this week.
Canada Post announced it would give the LCBO a flat rate delivery charge of $12 to ship alcohol through the mail to its customers. That has some small businesses crying foul but analysts say that's just the way it is.
Some small business owners rely on Canada Post, too, and they don't get the same discounted prices, not by a long shot.
Tim Laughlin, for example, is an antique license plate dealer in Windsor, Ont. He has thousands in stock, sells them online and ships to customers through Canada Post.
He says the national mail service rejected his request for a flat rate several times.
When he heard the LCBO was getting a break for shipping liquor, he was upset.
A same-day delivery of a licence plate within in Windsor, for example, would cost him $30.
Canada Post has agreed to ship alcohol to homes across Ontario for $12, plus tax.
The LCBO's website says online orders of alcohol for home delivery will be made within two to three days.
Not 'equal treatment'
"So somebody is paying for that. Is it the rest of us ... the little guy?" Laughlin asked. "This isn't offered to other small businesses and this, to me, is not fair, it's just not what I would call equal treatment."
Online orders for alcohol will be available for pickup at any LCBO store within four to 12 days, free of charge.
'Economies of scale'
CBC Windsor asked the Canada Post just how it came to terms with the LCBO but the a spokesman didn't say.
"Canada Post is pleased to collaborate with LCBO to offer residents of Ontario, regardless of where they live, the opportunity to purchase LCBO products online and have them delivered to their door," Mouktar Abdillahi said in an email.
Ian Lee, a business professor from Carelton University, said the reality is that large corporations can guarantee high volumes. Smaller businesses can't.
"If you're a small business that sends five pieces a week, you just don't have the scale, you don't have the volume, the clout, the market power to negotiate a better price, that's just the dilemma small to mid sized businesses face," he said. "They don't have the economies of scale."
Canada Post is shifting its business strategy, with fewer letters and more parcels being delivered. So some business analysts like Lee understand the LCBO deal.
He said it makes sense for Canada Post to offer a flat rate so the ailing mail service can profit.
"You cannot digitize a bottle of wine or a bottle of scotch. This is the kind of market Canada Post must go after," Lee said.
Union concerns
There is still one possible logistical hurdle for Canada Post: The Canadian Union of Postal Workers.
"We're still in the dark as to what exactly this will look like," CUPW president Mike Palecek said.
He claims Canada Post has not consulted the union on the new deal and he is concerned there may be health and safety issues.
Palecek did say carriers are already trained to check ID and that they will not need Smart Serve certification.
