Letter: The other cost of privatizing liquor outlets

Source: Joyce Neufeld, Estavan Mercury, August 17, 2016

The Sask. Party government privatization plans for 40 liquor stores include 36 in rural communities. They generated $32.63M in revenue in 2014. This is a profit that will now go to the private sector and which we, the taxpayers, will have to make up.  What the Wall government does not want made clear are the financial and human costs to our rural communities.  We are told that about 150 employees earning about $6M in total wages, are losing their government jobs. How many will be exercising their seniority and move away from small towns already reeling from the loss of grain elevators, banks, post offices, school and hospital closures? … While most of these communities will, no doubt, lose at least some families, the smaller ones will also end up with abandoned store buildings. There are no guarantees the privateers will use the existing government buildings. Abandoned buildings mean lost property taxes for communities already facing shrinking tax bases. …

Related:

Government booze stores cheaper, safer
Source: Michelle Gawronsky, Winnipeg Free Press, August 10, 2015

Studies of privatization in Alberta have shown privatization has led to higher prices as small businesses are being bought out by large corporations that charge more. Further, there has been a decrease in consumer choice (specialty products that don’t sell in high volumes don’t get shelf space), and an increase in social and policing costs — sales first, safety later. David Campanella and Greg Flanagan’s 2012 study: The economic and social consequences of liquor privatization in Western Canada, takes a closer look at these comparators for British Columbia, Alberta and Saskatchewan. In a price survey of common types and brands of liquor in these jurisdictions, they found B.C.’s private stores consistently averaged the highest price out of all, with private stores in Alberta “close behind.” Publicly owned stores in B.C. had the lowest prices for the items measured, followed by the Saskatchewan Liquor and Gaming Authority. A 2014 Global News study found beer in Alberta’s private stores was significantly more expensive than it was in Manitoba. And a 2014 Beer Store report, Convenience Store Alcohol Would Drive Prices Up, Government Revenue Down, found deregulated alcohol sales in Ontario “would drive up prices, harm communities and lead to hundreds of millions of dollars in lost tax revenue.” What did it say about selection? “There would be no benefit to offset the risks of deregulation. Not on price, or selection.” Ontario’s Beer Stores stock up to 330 brands, while the selection in Alberta is less than half that number.

Alcohol Retailing Deregulation: Implications for Ontario
Source: The Beer Store, February 10, 2014

The issue of alcohol sales in corner stores and gas stations is once again in the news in Ontario. Proponents of deregulated alcohol sales claim that deregulation will lower consumer prices, increase product choice, generate higher government revenues while at the same time improving responsible sales practices. While such claims may sound enticing, a review of the deregulation experiences of other North American jurisdictions shows that this combination of outcomes has never been realized anywhere in practice. In fact, increased availability of alcohol in jurisdictions that have deregulated liquor retailing has been accompanied by significant increases in consumer prices, a general reduction in product selection and lower government alcohol tax revenues. The following paper compares the performance of Ontario’s existing beverage alcohol retail system across a variety of factors to liquor retailing systems that have undergone varying degrees of retail deregulation with a particular focus on Alberta and British Columbia given the robustness of available data on those markets. Factors examined include expected impacts on consumer prices, government revenues, product selection, availability of liquor and responsible sales practices.

Read Full Report Here

Impaired Judgement: The Economic and Social Consequences of Liquor Privatization in Western Canada
Source: David Campanella and David Flanagan, Canadian Centre for Policy Alternatives, 2012

In Alberta and British Columbia, liquor retail privatization has meant higher liquor prices but lower government revenue. Moreover, the increased availability of alcohol brought on by privatization and its lax regulation contravene recognized methods for protecting public health. In light of Premier Brad Wall’s recent decision to move Saskatchewan towards a hybrid private/public model along the lines of British Columbia, these social and economic consequences of liquor privatization must be front and centre in any debate over the future of public liquor delivery in Saskatchewan.

View the Full Report Here.