Raise a glass to privatization

Ontario should follow Alberta’s lead on liquor sales

It is rare to see politicians come up with brave policy in the face of special interest groups. In many cases, politicians will fold rather than fight. But there is a notable exception these days out in Ontario. There, Progressive Conservative Leader Tim Hudak has proposed ending public and private sector monopolies in the sale of liquor.

In Ontario, government liquor stores dominate the market for wine and spirits, while the Beer Store, a private monopoly permitted by the government, dominates most beer retailing.

Predictably, the usual fearmongering has resulted. Some have argued that Ontario will lose billions in revenue should the province privatize its governmentowned liquor stores and open up competition on beer.

Others argue Ontarians will turn into raging drunks if people can pick up a six-pack in the corner store.

If Ontarians need a good example of a province that successfully exited the booze business, they should look west, to Alberta.

In 1993, the Ralph Klein government decided that there are some things a government doesn’t need to do, and being in retail sales is one of them.

So how did Alberta do? Great. As the Alberta Gaming and Liquor Commission points out on its website, before privatization in 1993, there were 208 government liquor stores in Alberta. There were also 530 hotel off-sale sites, such as hotels that could carry and sell limited selections, and 65 private retailers. Those were mostly rural grocery stores allowed to carry a selection of wine, beer and spirits, given the towns or hamlets were not big enough to support a full government liquor store. So Albertans had 803 outlets to choose from, though in reality, only the 208 government stores could be considered full liquor outlets.

Since privatization, the number of private stores in Alberta has jumped to 1,313 from 65; hotel offsales number 467, and other liquor retailers number 114.

Since privatization, product selection has exploded. It now stands at 18,046 types of beer, wine and spirits. Pre-privatization, Albertans were stuck with whatever government bureaucrats deemed necessary for the marketplace, or just 2,200 products.

On another matter, contrary to some claims being made in Ontario right now, Alberta’s government didn’t lose a nickel from the privatization of liquor stores. The markup — a sales tax by any other name — is why the Alberta government has taken in hundreds of millions of dollars every year since privatization. The provincial treasury took in $687 million in revenues last year from its markups applied to liquor products.

As for the notion that private retailers will contribute to alcohol abuse, give us a very large break. Such nasty, antiprivate sector accusations assume only a government worker can sell alcohol responsibly. Believe that and you’ll believe anything.

Ontarians should consider the suggestions of Hudak. From our perspective, the most sensible option is clear: follow the example of Alberta and get out of the business of being in the liquor business.

In 1993, the Ralph Klein government decided that

there are some things a government doesn’t need

to do, and being in retail sales is one of

them.