August 7, 2020

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It's time to uncork province's monopoly on booze

Hey there, time traveller!
This article was published 20/11/2015 (1722 days ago), so information in it may no longer be current.

It's an exciting time to be a drinker in Manitoba. There's a slew of new breweries opening in the coming year, and the province continues to slowly improve liquor laws.

Premier Greg Selinger announced in Monday's throne speech the NDP hopes to make Manitoba a craft-beer destination. The Manitoba Liberals surprised everyone with their August announcement they would explore ways to lower liquor prices, including potentially lowering taxes or privatization of the Manitoba Liquor & Lotteries retail stores.

Manitoba has Canada's second-largest public sector by percentage of labour, so privatization is a dirty word in many circles. The thing is, it might be a really good idea.

The classic Canadian example of liquor privatization is Alberta, which has had private liquor sales since 1993. Albertans were sold the idea of privatization on the promise of lower prices, more convenience and a wider selection of products. According to statistics this year from the Alberta Gaming and Liquor Commission, there were 208 government stores at the height of the former Alberta Liquor Control Board; there are now more than 2,000 liquor retailers in the province. On the cusp of privatization, consumers could choose from 2,200 products; that number has now ballooned to more than 22,000.

Looking at those numbers, it's safe to say Albertans got a good deal when they sold off their provincial liquor retailer.

Privatizing liquor sales in Alberta led to huge growth in the number of stores, and there's no reason it wouldn't happen in Manitoba. This means more jobs and more convenience for consumers. Allowing the free market to take care of liquor sales opens the door to explore any number of different store formats.

For example, imagine a store that specializes solely in Manitoba-made products, perfect for the coming influx of craft breweries. Currently, only private wine stores can order their own unique products, but wouldn't it be refreshing to have stores specializing in craft beer or premium, hard-to-find spirits? Beer vendors are technically private, but their near-monopoly on sales, standard pricing and uniform product selection don't exactly encourage differentiation.

A common concern of the anti-privatization crowd is the loss of tax revenue, but the numbers once again do not back up that theory. Alberta made $404.8 million in tax revenue in its final full year of the Alberta liquor board; last fiscal year, that number was $766 million. Inflation takes care of some of that disparity, but not all of it. That extra revenue can be spent on health care, education or whatever other social good needs it.

With any changes to liquor regulation, there's always concerns about the impact on society. The theory behind provincially owned liquor retailing is with the government at the helm, it can carefully balance the needs of customers with the social-responsibility mandate.

This has resulted in an organization with two opposing goals: sell alcohol, but also encourage people not to drink it. The main problem with this approach is MLL is very slow to react to changes in what customers want to buy. It led to the political pressure that resulted in private wine stores opening in 1994, and it's the reason Manitoba is so late to the craft-brewery party. With the hassle of running a retail business out of the way, the government would be free to regulate the liquor industry and prioritize the safety and health of Manitobans.

Advocates of the provincial liquor monopoly will cry foul about privatization, suggesting it will lead to sales to minors, endless public drunkenness and anarchy. The thing is, we already trust private businesses not to sell to minors at hotel vendors, restaurants, bars or anywhere that sells cigarettes. Manitoba has some of the highest fines in the country for violating these rules.

Privatization would also result in the loss of standardized, provincewide alcohol pricing, but that isn't a bad thing. In all other retail areas, consumers are used to shopping around for the best prices and paying a premium when they need convenience or are buying specialty products. Some will lament the loss of a swath of unionized retail jobs, but that's a short-term problem. Those well-trained MLL employees will find work at private retailers, and those with a long history at the Crown corporation would no doubt get a healthy severance.

Privatizing liquor sales would result in increased convenience and product selection for consumers. It would increase the number of retail jobs in the province and provide new opportunities for local entrepreneurs. It makes fiscal sense, and it can be done in a socially responsible and safe way.

After 90 years of strict liquor control, it's time for Manitoba to get with the times.


Adrian Trimble is a business student at the University of Winnipeg and a British expat working in web development. He's passionate about design, craft beer and music, and enjoys travelling to breweries far and wide in search of the perfect pint.


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