You can’t overlook convenient hours if you hope to preserve the obvious benefits of public liquor sales

In Alberta, this kid would be buying Jägermeister and Red Bull. Below: The Parkland study; Saskatchewan Premier Brad Wall.

In one regard, Alberta’s 1993 experiment in liquor store privatization has been a resounding success. To wit: almost everyone thinks it worked.

I was reminded of this reality earlier this week when the Parkland Institute and the Canadian Centre for Policy Alternatives released their study of liquor store privatization – Impaired Judgment, The Economic and Social Consequences of Liquor Privatization in Western Canada – which illustrates how the principal argument advanced for the policy, that booze will cost less, holds neither scotch nor water.

Government liquor stores in Saskatchewan and B.C. had the lowest prices in a comparison of 13 popular alcoholic beverages. Private stores in B.C., where there is a mix of public and private, and in Alberta, where retail sales were completely privatized when Ralph Klein was premier, are on average more expensive, the study by public finance economist Greg Flanagan and public policy researcher David Campanella demonstrated.

By several other measures, the two researchers concluded, liquor store privatization was also a flop. These included $1.4 billion in foregone government revenues, lousy compliance rates with the rules about selling booze to minors and intoxicated people, no way to control the blight of tatty and marginal liquor retailers in Alberta neighbourhoods, and poor controls on the marketing of exploitive low-cost high-alcohol pop-style drinks aimed at young people.

“Strikingly, the tax revenue generated per litre of alcohol sold in Alberta has declined dramatically in the years since privatization,” the researchers wrote in the study’s summary. When it comes to obeying the rules about sales to children and intoxicated people, “audits performed by the B.C. government have since 2003 consistently reported a much higher compliance rate in stores that are publicly-owned (63 per cent) rather than privately-owned (25 per cent).”

Except for the prices – which are hard to estimate when you can’t comparison shop on the same day in more than one province – almost anyone who has been inside any Alberta city’s scores of rundown and dirty liquor stores can attest to the truth of Messrs. Flanagan’s and Campanella’s observations.

Indeed, there’s one more to boot, anecdotally speaking. Except for a few chi-chi wine shops in upscale neighbourhoods, the selection of drinkable products available here in Alberta tends to be terrible – with the stock in most stores running heavily to a few of the most popular brands and the aforementioned sweetened swill aimed at teenaged binge drinkers.

But none of this may matter in the eyes of the public, which in reality has focused on another issue entirely: convenience.

I know this because a couple of years ago I had the opportunity to sit in on an extensive focus group project conducted by a respected independent researcher for a union concerned with public attitudes about privatization.

If you want a snapshot of what the public thinks on a given issue, do a poll. But if you really want to get to the bottom of why they think it, you need to conduct focus groups.

And when you take a magnifying glass in the form of a series of focus groups in several communities to the question of privatization, you find lots of interesting things, which can be boiled down to the propositions that the public is in fact paying attention to the issue, and that they don’t trust privatization proselytizers but they do think it works sometimes.

We don’t want health care to be privatized, respondent after respondent observed in communities throughout Alberta, because we don’t trust private companies and we understand how and why the single-payer system keeps costs down. But privatization does work for some things, was a view almost universally expressed in Alberta focus groups.

Like what? The answer was always the same: liquor stores. And why? Because the hours are better.

In fact, those are the clearly delineated poles of the public’s attitude about privatization in this province: they hate the idea of health care privatization, and they love the idea of liquor store privatization, which in their eyes worked because today the hours are indisputably better.

There’s a lesson here for those of us who believe that the public sector does a better job for many enterprises – liquor sales among them, for the reasons pointed out in the Parkland-CCPA study.

To wit: That part of the argument for continuing the many obvious advantages of public control over retailing of a culturally entrenched intoxicant like alcohol needs to account for the self-evident desire of consumers to be able to buy it at hours that are convenient to them.

We have to make the point that limited hours for liquor sales are a management decision and there is no reason that public liquor stores can’t be open at hours that are more convenient for consumers.

Yeah, they may have to pay staff more to work later hours. But the Parkland-CCPA research suggests this won’t result in higher retail prices or decreased government revenues – perhaps the contrary. Moreover, the social gains would be significant – far better compliance with the law and more responsible marketing, not to mention a limit on the number of robbery magnets throughout our city neighbourhoods.

We also need to acknowledge that these marketing realities do not come naturally to the government sector, and we have to speak up for paying attention to them and making the effort if the otherwise obviously superior public option is going to be allowed to succeed.

Otherwise, we’d better get used to the reality that privatizers like Premier Brad Wall in Saskatchewan will win this argument and that while residents of that province pay the price in lower revenues, grotty stores that blight their communities and more serious and expensive public health and social consequences, they may well think things have gotten better!

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7 Comments on "You can’t overlook convenient hours if you hope to preserve the obvious benefits of public liquor sales"

  1. Bruce says:

    It’s hard to believe that people can’t see this for themselves. Here in Ontario, any LCBO outlet I have been to and I drink very little, has got more selection than you can shake a stick at. David Frum, if I recall correctly, had made this privatizers argument years ago in the National Pest. More selection, better service and lower prices! Yeah, sure, what he left out was the pink elephants that come with the privatizers scam!

    This idealogical rot has spread from the brain to wallet with so little effort. Talk about being led by the nose and not even realizing it.

    Like a drunk being rolled on a Saturday night!

  2. Martin says:

    I drink a gluten free beer that costs $18-$19 a 6 pack anywhere I have looked in Alberta. I was just in Ontario and was shocked to find it was only $12 there! Robbery!

  3. ray says:

    There might be an argument that liquor stores do not need to be open all hours of the night too and the blight the dirty little run down stores are on our communities should be factored in. I for one do not see a net benefit to having 5 times as many stores, open twice as many hours and with only a third as much choice.

  4. Beijing York says:

    Manitoba’s Liquor Marts are very convenient and their selection is almost as good as Ontario’s LCBOs. Hotels and motels run off-site beer sales but the selection of brands is very limited and their point of sale locations are not where I would want to be after dark. There are also a few wine boutiques with less selection and higher prices. And their hours are not always more convenient except maybe for some holidays.

  5. Paul Turnbull says:

    The price, taxes, and selection arguments are straw men. The real question is why should the government be involved in particular arbitrary retail sector. Asides from sensible regulation on production and who is being sold to, I don’t see any need for the government to be involved alcohol sales. I am always amazed when I travel to the U.S. or Europe or even Quebec at being able to purchase beer and wine in grocery stores and corner stores when I feel like it.

  6. Lars says:

    On the one hand, it makes sense to let the market handle the retail liquor trade, it’s true. But if the investment has been made, why sell it off? I really wonder which Friends of Ralph benefited from that particular sale of assets.
    And it’s funny how the Invisible Hand seems to fumble liquor sales. It was cheaper for me to buy scotch in statist Ontario, with its grotesquely-distorted market and nanny-state tut-tutting about unhealthful vice, than it is in free-enterprise Alberta after privatization. Or is there some deeper wisdom of the market that I’m missing here?
    And how does the free market justify a private liquor store that doesn’t carry scotch at all? Not even a drop. I couldn’t believe my eyes.

  7. Paul Turnbull says:

    You sell it off because there is no public good in the government managing liquor sales. You sell it off because there is no public good in keeping liquor prices artificially low. You sell it off to avoid inanities like a brewery in Jasper that can’t afford to sell it’s product to Jasper restaurants because they’re required to ship it to Edmonton first. Government involvement in any industry should only extend as far as it’s necessary to ensure the public good.

    The free market justifies a liquor store without scotch where the owner can make a profit running the store. There are also stores with only wine. To be frank if you’re having trouble finding liquor in Alberta then you’ve lost the ability to walk another block, there’s pretty much a store for everything now and they’re open until midnight. :)

    Personally I think the Alberta government should back off even more. I’d like to buy my dinner wine while I’m buying my steak, I’d like to be able to go to my neighbourhood corner store and buy some beer on a hot day, and I’d like if the availability of a product wasn’t being vetted by a government run distributer.


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