LET THEM COMPETE

Brad Wall’s speculations on privatizing all government-owned liquor stores shows that even though he represents a political party that espouses free enterprise principles, he does not understand how they work.

The premier says the new private stores will give customers more selection and better service, and cost taxpayers less money.

This new entry into liquor marketing is weighted heavily in favour of private vendors. They can advertise products, offer discounts on products, and stock the stores with a wider selection of products that cater to the demographics of the urban area where they are located.

Government stores cannot advertise or offer price discounts, and can only order from a limited list of products that are stocked to cater to a provincewide demographic.

When a private store advertises a few products at a discounted price, customers will go there to save on those products. While there, they will buy other undiscounted products. This is good for the private store, but draws customers away from the government stores.

The fact that the government stores must compete with private stores for customers, yet are not allowed the same leeway in advertising and pricing, dooms them to failure.

Private stores will thrive under these rules, while public stores lose market share and profitability. These losses will then be used to show that the private stores are better, and further the argument for selling government stores.

The government should allow managers at its stores to price match and expand