The purchase of all Products will be subject to the terms and conditions contained in the Commitment Letter and in the LCBO Purchase Order. Such purchases are also subject to the requirements contained in this document. Special terms negotiated between the Category Director and the Supplier/Agent will be referenced in the Commitment Letter.
Conditions of Purchase Table of
Contents
General Conditions of
Purchase
The Purchase Order
Further Product Testing
Product Allocation to
Stores
Sales Targets
Product Promotions
General Conditions of Purchase
Here are some of the general conditions of purchase:
LCBO Chemical Analysis
The
Supplier or its appointed Agent must provide
the Category Manager with a sample(s) of
the Product for chemical analysis in accordance
with the LCBO Quality Assurance guidelines
for chemical analysis, which reflect the
standards of Health Canada (note alternative
below). If the sample fails analysis, a second
sample may be requested from the Supplier
or its appointed Agent. If the second sample
also fails, then the LCBO may reject the
submission in whole and the commitment letter
will no longer be in effect. LCBO testing
standards for chemical analysis are available
in the LCBO Product Packaging Standards and
Guidelines for Chemical Analysis, available
on the LCBO's web site at www.lcbo.com under
Site Map/Business Information (or under www.lcbotrade.com under Resources/Forms). Print copies may
also be obtained from LCBO Sales & Marketing
Division or Quality Assurance Department.
Acceptable Third Party Certificate
of Analysis
Certificates of Analysis will be accepted
from laboratories with ISO/IEC 17025 accreditation
status. These laboratories must be certified
in the analysis of alcoholic beverages as
described in the LCBO Guidelines for Chemical
Analysis. Each Certificate of Analysis must
be completed, signed and stamped by the Laboratory
and include Quality Control data. Analytical
methods and accreditation documents must
be made available upon request. Proof of
accreditation status must accompany the Certificate
of Analysis. Results shown on such certificate
must fall within the maximum allowable limits
as allowed by LCBO guidelines.
LCBO Label, Consumer Unit and Shipping
Container Approvals
The Supplier is responsible for ensuring
compliance with all applicable packaging
laws/regulations/requirements of both Canada
and Ontario . LCBO label approval does not
indicate compliance with such laws or Standards
but only with LCBO packaging specifications. Where
non-compliance with such laws or with CALJ
Product Identification Standards is discovered
at any time, the Supplier will be totally
responsible for correcting the defect or
face the removal of the Product from store
shelves, whichever is applicable. LCBO testing
standards are available in the LCBO Product
Packaging Standards and Guidelines for Chemical
Analysis available on the LCBO's website
www.lcbo.com under Site Map/Business Information
(or under www.lcbotrade.com under Resources/Forms).
Print copies may also be obtained from LCBO
Sales & Marketing Division or Quality
Assurance Department.
Consumer Unit Label Examination
The Supplier or its appointed Agent
must submit a sample of the label design for
the Product on the LCBO
Request for Label Examination form within
the time stated in the Commitment Letter.
The label must be accepted by the LCBO before
the Product will be purchased.
Shipping Container Examination
The Supplier must also adhere to LCBO
Product Packaging Standards and the Canadian
Association of Liquor Jurisdictions' (CALJ)
Product Identification Standards pertaining
to the distribution of beverage alcohol (available
on the LCBO's web site www.lcbo.com under Site
Map/Business Information/UPC Standards). The
Supplier or its appointed Agent must submit
a sample of the shipping container, complete
with markings, along with a Request
for Shipping Container Examination form (LCB
2102) within the time stated
in the Commitment Letter issued by the LCBO.
This requirement also pertains to all beer
that comes through the LCBO warehouses including
imported SKUs that are exclusive to The Beer
Store. These forms are available on-line
at www.lcbotrade.com.
The Supplier or its appointed Agent will be notified in writing if the label/shipping container is:
- Acceptable
- Requires changes and must be re-submitted for approval
- The submission is rejected.
Failure to submit the label and shipping container examination form within the specified time may result in the submission being rejected in whole.
The Supplier or its appointed Agent will be required to confirm in writing the U.P.C./EAN number and shipping container code (SCC-14).
Supplier Rebate
The Supplier will be required to rebate
to the LCBO twenty-five percent (25%) of
the purchase price with respect to the LCBO
warehouse and store stocks of the Product
if the Product is discontinued, either by
the LCBO or voluntarily by the Supplier.
Additionally, for Beer, the Supplier will be required to rebate 25% of the purchase price on all remaining warehouse and retail inventories approaching the end of its shelf life (six weeks before shelf life expires).
When the conditions of purchase have been met, the LCBO will initiate a Purchase Order to the Supplier, which will outline specific directions for shipping and the dates for shipment arrival at the LCBO.
Failure to ship within the time stipulated may result in a decision not to purchase the Product.
LCBO Purchase Order Document
All Liquor purchases by the LCBO will be
subject to the terms of the LCBO Purchase
Order and these terms may not be changed
or overridden by any Supplier documentation.
The LCBO reserves the right to make amendments
to the standard Purchase Order as necessary,
from time to time.
All Suppliers are responsible for reading the terms of the LCBO Purchase Order submitted at the time of ordering. All Suppliers are also responsible for providing all necessary shipping documents that are to accompany the order.
Please note that each Supplier must indemnify the LCBO for any damages, costs, expenses, etc., which the LCBO suffers as a result of defective Product, including defective or non-compliant packaging.
When the first shipment is received into the LCBO warehouse, and prior to distribution to stores, the shipping container and consumer unit is reviewed. Additionally, randomly selected samples are forwarded to the LCBO Quality Assurance laboratory for chemical analysis and for organoleptic assessment. If the results of testing the consumer unit and the shipping container are not satisfactory, then the LCBO may reject the shipment or may reject the submission in whole and the Supplier will be responsible for the appropriate disposition of the stock. If the Product is un-saleable, the Supplier will be responsible for removing and disposing of the defective stock at the Supplier's expense.
Payment
Suppliers with an
active LCBO account will automatically be
debited $135 per sample (p rice subject to
change) analyzed plus applicable taxes. The
certificate of analysis will constitute proof
of payment through this debit process. One–time
Suppliers will be required to submit a cheque
in the amount of $135 (p rice subject to
change) plus applicable taxes per sample
payable to the LCBO at the time of sample
submission.
Products that are bought by the LCBO may be granted an initial specified store distribution determined by the LCBO. The distribution may be limited to particular regions or to stores that service a particular clientele. If the Product is given a limited distribution designation, then increased store distribution will only be possible with the written approval of the Business Unit Director. For other Products, the Supplier or its appointed Agent may solicit increased distribution from Store Managers and from Category Managers.
At the time of purchase, the Category Manager, in discussion with the Supplier or its appointed Agent, will set Sales Targets for the Product. These targets are customized to the Product, with consideration to retail price, and store distribution. All Products are expected to meet or exceed these Sales Targets, which will be reviewed periodically by the Category Manager as described in the Commitment Letter. Suppliers and their appointed Agents will be held accountable for achieving Sales Targets regardless of the granting or denial of promotional program applications. Failure to meet Sales Targets within the times required by the LCBO will entitle the LCBO to discontinue buying the Product by written notice. Review of Sales Targets will be conducted at the times set out in the LCBO Commitment Letter. Such reviews will also be conducted monthly following completion of the first twelve (12) months of purchase. Suppliers and Agents should be vigilant about maintaining the Sales Targets for their Products, as failure to so maintain will entitle the LCBO to discontinue buying the Product.
The LCBO offers a number of promotional opportunities to feature Products in-store. Suppliers are encouraged to participate in the marketing programs to a degree that is appropriate for the Product. This can be done through consultation with the Category Manager. The promotional programs include:
- Participation in the IMAGE program with featured hero, end aisle, or shelf extender positioning
- In-store sampling
- Value Add
- AIR MILES®
- Limited Time Offers
- Contests
- Shelf Talkers
- Necktag program
Suppliers and their appointed Agents will be held accountable for achieving Sales Targets regardless of the granting or denial of promotional program applications.
Suppliers or their appointed Agents must communicate all Licensee promotions and external advertising liable to impact inventory levels to the Category Manager or designated Inventory Manager.
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