The LCBO maintained a quasi-monopoly on the trade in alcoholic beverage sales in Ontario for nearly a century after its creation: for most of this time, LCBO stores were the only retail outlets licensed to sell alcohol in Ontario, with the notable exceptions of beer The Beer Store had a quasi-monopoly on retailing beer during most of this period and a number of wine shops, [ 9 ] which had once been relatively diverse but had largely consolidated into two major chains by the s: the Wine Shop and Wine Rack.
In December , the LCBO authorized some supermarkets to sell cider, wine, and beer within their grocery aisles, substantially weakening their and The Beer Store's long near-monopoly statuses. The LCBO remains the chief supplier of alcoholic beverages to bars and restaurants in Ontario, which are generally required by law to purchase their alcoholic products through the LCBO, The Beer Store, or directly from Ontario wineries and breweries. Beverages sold at bars and restaurants must be consumed on the establishments' premises.
The LCBO was created in with the end of prohibition, which had been introduced in the province in Wineries and breweries were also allowed to sell from their own stores, which were limited in number. In the Ontario prohibition plebiscite , voters chose, narrowly, by a margin of Upon reelection, it introduced the Liquor Control Act as a compromise between the complete prohibition demanded by the temperance movement and the unregulated sale of alcohol. Premier Ferguson stated that the Liquor Control Act was " Ferguson was further quoted as saying the purpose of the LCBO was to "promote temperance sobriety, personal liberty and, above all, to restore respect for the law".
The first chief commissioner of the LCBO was David Blyth Hanna and the first 18 stores were opened on 1 June , all designed with a clear glass store front to "make the process appear apparent and with a complete absence of mystery", according to an LCBO document.
Previously, only wine sales were legal but bootlegged liquor and beer were illegally sold. The business model was a process of "disinterested management"; the product was available but purchases were discouraged and moderation remained key. By the end of , the province had 86 stores and three mail-order facilities. The permit was valid for a year.
