http://www.nationalpost.com/news/canada ... ?id=622822
Keeping cap on liquor sales
Shannon Kari, National Post Published: Monday, June 30, 2008
National Post Research, Mike Faille, National Post
Singer Corey Hart was promising to "Never Surrender," Pamela Anderson was graduating from a British Columbia high school and the Toronto Maple Leafs finished with the worst record in the National Hockey League in 1985.
At the same time, the newly elected Liberal government in Ontario was promising to bring the liquor distribution laws "into the 1980s" by allowing the sale of wine and six-packs of beer in convenience stores. The proposal was described as an "anti-family con job" by the opposition Conservatives and the NDP, which defeated the bill in the legislature.
But while a Liberal government is again in power in Ontario in 2008, the possibility of beer and wine in corner stores these days is about as remote as the Leafs winning the Stanley Cup. Ontario is not alone. Across the country, Canadians who plan to celebrate the national holiday tomorrow with a libation or two will do so only at the whim of their governments.
Wholesale distribution of alcohol is controlled by the government in every Canadian province. With the exception of Alberta and Quebec, the government is also the primary retailer -- more so than any other democratic country.
Despite studies that indicate a private retail system would increase government revenue by eliminating the cost of operating retail outlets and does not lead to problems with alcohol consumption, there is very little political will to make changes.
"We want to keep the LCBO (Liquor Control Board of Ontario) in public hands," said Sean Hamilton, a spokesman for the Ontario Finance Minister.
"We are not going to sell beer and wine in corner stores," he stressed.
The LCBO and the government-licensed "The Beer Store" (operated by Molson, Labatt and Sleeman) ensure "social responsibility," explained Mr. Hamilton, by making it more difficult for minors to purchase alcohol.
Internal government polling suggests that people in Ontario do not want changes, Mr. Hamilton said. He declined to release the data from the poll or the questions that were asked.
In British Columbia, the government more than doubled the number of licences issued to private retailers in recent years, in addition to the nearly 200 provincially operated outlets. But there is now a moratorium on any new private stores, said Jay Chambers, general manager of the B. C. Liquor Distribution Branch.
"There are no plans to put beverage alcohol in grocery stores," Mr. Chambers said. "The government is comfortable with what is in place," he stated.
Alberta is the only province with a private retail system, although it does not permit sales in grocery or convenience stores. In Quebec, beer and wine is sold in grocery and convenience stores.
The LCBO was established in 1927 to regulate alcohol sales after prohibition was repealed and the government knows best mindset is still alive and well in most of Canada, suggested Mark Hicken, a Vancouver lawyer who runs a wine blog and consults to the industry.
"It goes back to the mentality of Prohibition, that it is a privilege for the government to let us in the stores and buy alcohol products," Mr. Hicken said. "I think the Canadian public would welcome more liberal licensing laws. But they are up against an entrenched bureaucracy," he said.
The opposition to change is steadfast even when the beliefs about the dangers of a private system are debunked by a government study. The Ontario government rejected the findings of a $600,000 study it commissioned in 2005, the same day the report was issued.
The Beverage Alcohol System Review panel concluded the province could generate an extra $200-million annually, enough to build a new 300-bed hospital each year, if the government allowed private retailers to sell alcohol. A private system would increase choice and lower prices for consumers.
The panel noted that in 2004 the per capita net revenues in Alberta were 30% higher than in Ontario.
This is even though Alberta charges a flat markup on alcohol products compared to a percentage of total price in all other provinces. As a result, higher-end products tend to be cheaper in Alberta.
Consumption was highest in Nova Scotia, which has the most government control over distribution and the fewest per capita retail outlets.
Alcohol consumption was no higher in New York State even though it has eight times as many retail outlets per person as in Ontario. The results were similar when comparing Washington State and Oregon to B. C.
Widespread government reluctance to liberalize retail alcohol sales is a constant source of frustration for Dave Bryans, president of the Canadian Convenience Stores Association.
He pointed out that convenience stores have been selling beer and wine in Quebec for 30 years, without any evidence that it has been damaging to young people. "Our stores sell tobacco, lottery tickets and adult material. We can handle beer and wine," Mr. Bryans said.
In cities such as Ottawa many consumers simply travel to Gatineau, Que., where the beer is cheaper and more widely available, Mr. Bryans said.
Along with restrictions on access, consumers across the country are subject to a confusing array of taxes and fees on every bottle of beer, wine or spirits they purchase.
Federal excise tax, GST, provincial sales tax, provincial markups, cost of service fees, deposit fees and often unexplained charges such as a "bottle fee" in Ontario, which is not related to the environment, are all part of the final price at the government retail outlet.
Wine prices in B. C. are some of the highest in North America, Mr. Hicken said.
He suggested increased awareness of government markups and taxes may be the only way to convince the public to apply the necessary political pressure so that one day consumers may go to a single store to purchase a bottle of wine and a steak to grill on the BBQ that night.
"People have become used to high prices. If they knew about all the hidden cos t s , ther e would probably be more anger," he said.
skari@nationalpost.com
(follow the story link for a picture comparing the prices of various alcohol purchases across the country)
