Keep the liquor industry in public hands

The pressure to privatize liquor sales is relentless. A new round of debate is currently underway in Manitoba. In this article, the case against privatization is outlined by the leader of the province's largest public sector union.

By Peter Olfert
President
Manitoba Government and General Employees' Union (MGEU/NUPGE)

Winnipeg (20 Jan. 2009) - The issue of privatizing the liquor industry in Manitoba has been raised once again, most notably by the Winnipeg Free Press.

What's often missing from the pro-privatization argument are the negative social consequences that other provinces have experienced, partly because governments in those jurisdictions have placed their faith in the market system and failed to recognize that alcohol is different from other consumer products.

Most people can enjoy a glass of wine with dinner or a beer now and again with no problems. But for others, alcohol abuse contributes to serious health and social problems including liver cirrhosis, cancers and addictions, as well as drinking and driving, and domestic violence.

According to the National Alcohol Strategy Working Group, the economic impact of alcohol-related harm in Canada totals $14.6 billion annually, taking into account the costs associated with lost productivity, health care and law enforcement.

Privatization has resulted in longer operating hours, an increase in the number of liquor outlets and increased consumption in other Canadian jurisdictions.

Hangover in Alberta

For example, 10 years after Alberta privatized the liquor industry, sales outlets in that province more than tripled from 310 to 983. As of 2004, Alberta also had the highest alcohol consumption rate among Canadian provinces and there was a marked increase in the number of alcohol-related criminal offences including liquor store break-ins and sales to minors.

Many say product selection at government stores is lacking but the opposite appears to be true. Private owners simply aren't stocking products that don't sell well, thus limiting selection.

The argument has also been made, again by the Free Press, that if Manitoba Liquor Control Commission (MLCC) stores were really serious about customer convenience, they would have remained open longer on New Year's Eve rather than closing at 6 p.m. Private wine stores also closed at 6 p.m. but could have been open later.

In a joint 2003 submission to Ontario's Beverage Alcohol System Review Panel, the Ontario Public Health Association (OPHA), the Centre for Addiction and Mental Health (CAMH) and Mothers Against Drunk Driving (MADD) concluded that "maintaining public alcohol retail distribution systems with a strong duty of social responsibility is one of the most effective ways of minimizing harm caused by alcohol... (Public systems) are typically more restrained than their private counterparts in promoting alcohol sales and more likely to aggressively challenge and refuse to sell alcohol to underage youth and the already intoxicated."

Last year, more than $220 million went into the Manitoba treasury from revenues generated by the Manitoba Liquor Control Commission. That's hard to replace.

Long-term loss

Yes, privatization of MLCC would likely result in a one-time spike in provincial revenue from taxes on private retailers and the sale of capital assets and licences. Over the long term, however, privatization is likely to result in a net loss of provincial revenue due to reduced revenue from alcohol sales and increased regulation and enforcement costs.

More importantly, government liquor monopolies are recognized as being able to provide a balance between public health and safety concerns, fiscal interests and quality customer service and convenience. They operate in a socially responsible manner, with an emphasis first on community safety, all the while contributing revenue that stays in Manitoba for the benefit of all Manitobans.

Need proof? Recently, in Thompson, the MLCC significantly strengthened a program that places limits on the amount of alcohol customers can buy each day as a result of requests from the City of Thompson and several northern chiefs to reduce bootlegging in dry northern communities.

Would a private retailer give up hundreds of thousands of dollars in profit to aid in the fight against illegal bootlegging?

Majority opposed

A Probe Research omnibus poll that asked Winnipeg adults if they support the sale of liquor, beer or wine in grocery stores found that 56% opposed compared to 37% in favour. MLCC's own customer satisfaction surveys show a 97% satisfaction rating among customers at its stores.

Before we go down the ruinous road of liquor privatization, the Doer government should adopt legislation ensuring that Manitobans are given a voice in any decision that could drastically affect their families, communities, and quality of life. NUPGE

Peter Olfert is president of the Manitoba Government and General Employees' Union (MGEU/NUPGE).