Wise to keep liquor stores public

Premier Brad Wall’s recent about-face on liquor privatization — should he maintain his position — will leave Saskatchewan voters with a profound choice in the next election.

Privatization of our public liquor system will involve substantial tradeoffs for Saskatchewan, and it is important that citizens be aware of what they are trading away and what they are receiving in return if the government decides to move forward with the wholesale privatization of all liquor stores.

The only real advantage to privatization will be that it will give consumers greater access to alcohol. There will be a lot more liquor stores in a lot more places. In Alberta, there were 208 government stores prior to privatization in 1993. By January 2011, there were 1,240 private retail liquor stores.

They also will be open for more hours. Government liquor outlets are restricted to 74 hours per week in Saskatchewan, while private stores are open 112 hours a week in Alberta. (This obviously excludes the availability of private off-sale outlets in Saskatchewan).

As numerous studies have shown, public stores offer more competitive prices on a wider range of products due to economies of scale, and the absence of costs such as advertising or marketing that would burden a private store. Similarly, while some boutique stores in larger urban centres might offer greater selection, the majority of private stores will only offer those products that are proven sellers.

Smaller private stores, particularly in rural areas, simply cannot risk the shelf space on unproven or lesser-known brands. So even if we as a province decide that our highest priority in regulating the sale of alcohol is the satisfaction of the individual consumer, we can see that at least in regards to price and selection, there is a strong case to be made that the public sector is at least equal or even superior to the private sector.

Obviously, satisfaction of consumers is not the sole reason to regulate alcohol sales. We also believe that there is a wider public interest that needs to be served when dealing with a product such as alcohol that leads to a variety of social harms.

There is no doubt that a public system is superior in ameliorating the social harms associated with alcohol. The World Health Organization, the Centre for Addiction and Mental Health, the U.S. Centers for Disease Control and the European Commission all insist that a public monopoly is the best means to reduce the public health harms of alcohol, and strongly oppose privatization based on evidence that it results in increased per capita alcohol consumption — a well-established proxy for excessive consumption and related harms.

In addition to public health concerns, it has been well documented that public liquor stores exercise a much more robust system of liquor law compliance and enforcement in comparison with the private sector. For instance, the percentage of British Columbia government liquor stores requesting the mandatory two pieces of identification in 2008 was 77.5 per cent, while the private liquor stores rate of age identification was only 35.9 per cent.

Now, many critics might argue that there is no reason why a wellregulated private sector cannot achieve the same public health and social responsibility goals as that of a public monopoly. But one other consequence of privatization that’s rarely considered is that it will create a very powerful political constituency that will lobby hard to defend its economic interests.

Private retailers have an economic interest in facilitating higher consumption, which could be impeded by any increase in liquor taxes or more stringent regulations. Since privatization, Alberta has seen private liquor retailers establish a powerfully influential lobby able to roll back government efforts to increase liquor taxes.

The reality is that the interests of the private liquor industry will almost certainly come into conflict with the public interest. Currently, under our public system, concerns such as public health can take priority in government policy. Will we be able to continue to make such issues a priority in the face of a financially powerful group determined to advance its economic interests?

Through privatization, the Saskatchewan people will receive greater convenience in exchange for greater social harms.

If we believe that ease of access to alcohol for the individual consumer should be the No. 1 priority of liquor regulation, then privatization is the way to go. If we believe that there is a greater public interest in regulating alcohol to maximize social welfare and public health, then we must remain committed to our public liquor stores.