Diageo & Campari Lose Case: Facing Millions in LCBO Refunds

Legal Challenge Fails: Spirits Giants to Pay Massive Contractual Damages to LCBO

A Canadian court recently ruled against several international spirits giants, including Diageo, Campari, Beam Suntory, and Brown Forman, in their legal challenge against the pricing rules of the Liquor Control Board of Ontario (LCBO). This ruling means these suppliers must pay significant refunds to the monopolistic agency. At the heart of the dispute is a "minimum price clause" in their contracts, which requires suppliers to ensure that the prices offered to Ontario are no higher than the lowest prices offered elsewhere in Canada.

In his judgment, Judge Cavanagh noted that the companies involved are sophisticated commercial entities that should have been fully aware of the regulatory framework when entering the Ontario market. Although the suppliers argued that the LCBO's sudden enforcement after years of inaction was unfair, the judge maintained that every purchase order contained the same terms and conditions. It is estimated that suppliers representing over 70% of spirits sales in Ontario now face staggering retroactive payments. The clawback began after the LCBO discovered that retail prices for certain products in Quebec were lower than those in Ontario, triggering strict enforcement of the contract terms.

Spirits Canada, the industry association representing the affected distillers, expressed regret over the ruling but noted it looks forward to continuing its collaboration with the LCBO. Meanwhile, the LCBO released a statement confirming the court's decision, emphasizing the importance of supplier partnerships in providing the best customer experience. While the ruling may lead to adjustments in future market pricing strategies, all parties have signaled their intention to continue operating within the province to maintain a stable spirits supply chain.

Additionally, Diageo has resolved a separate dispute with the Ontario government, allowing its products to return to local shelves. Although the group still plans to close its Amherstburg bottling plant, it has committed to investing in Ontario to strengthen the local supply chain. The Premier of Ontario welcomed the commitment, stating that the investment will support local community development and demonstrates the resilience of the partnership between distillers and the government beyond legal disputes.

📅 Release Date: 2026-02-17

🔗 Source: https://www.thedrinksbusiness.com/2026/02/major-spirits-groups-including-diageo-and-campari-face-millions-in-refunds/