Provincial booze monopolies

[someone]

Given that the vast majority of threads on the first page are on American politics (it would not be so bad if the threads did not always contain the same arguments made again and again), I thought I would try starting one on a different topic.

Most provinces in Canada currently have government monopolies for liquor and wine retailing (some provinces like Ontario have partial exceptions for Canadian wine). The prices and variety offered differ from province to province. I used to think Ontario was bad until I lived in Newfoundland. Nonetheless, in all cases, I think that the question has to be asked, what business does the government have in the liquor and wine retailing business? Moreover, in Ontario the government allows the major brewers to monopolize the retailing of beer. Even if there is an argument in favour of a government liquor monopoly, does it apply to a private monopoly on beer retailing?

Any thoughts?

 

[Truncador]

I think that the question has to be asked, what business does the government have in the liquor and wine retailing business?

They don't. But in both most of Canada and many US states, they do anyways. It was one of the compromises that helped do away with the Prohibition movement and associated laws. Back in the high age of social government, so-called "social problems" associated with vice and the like (alcoholism, drunken brawls, etc.) were conceived in terms of anarchic, individualistic forces festering outside of, and in opposition to, capital-s Society. Socializing (the term is very revealing) the liquor industry was perceived as a way to forcibly annex the industry to Society and thus neutralize the anarchic anti-social forces perceived to reside therein.

A less Statist solution was the creation of Brewer's Retail in Ontario. Failing of outright nationalization, the social government mind prefers to see things in the hands of monopolistic cartels and huge corporations working in a sort of junior partnership with the State, since corporations are collectivities organized under authority, and less individualistic (and therefore anarchic) than a panoply of small retailers operating with no central direction.

Finally, as a digression, the health education campaign to promote "social drinking" (according to which drinking in a group is somehow less dangerous than drinking alone, because more "social") emerged in one and the same movement, and reflects the exact same reasoning.

If all of this sounds less than perfectly rational- that's because it is. There's no use looking for a technical policy rationale behind it; any such rationale is window-dressing. The driving force was ideological, and the policies obey an ideological, as opposed to technical or scientific, logic.

 

[wollensak]

Get Real

So the reason we have a liquor retailing "monopoly" is becuase our goverments are socialist and opposed to individual liberty?? What a complete crock.

Any study of the prohibition years will show that thousands of people were literally poisoned by adulterated alcohol products during this time. Alcohol is a poison (literally). I suppose we would enjoy more "freedom" if people were allowed to sell booze out of the trunks of their cars.

I think Trunc would probably oppose free heroin programs on the basis that it cuts into addicts freedom of choice.

There are many small breweries and wineries selling their products through the LCBO and Brewer's Retail. You can also buy direct from many wineries.
It's not all "huge corporations".

I suspect the main reason to limit retail sales of alcohol products it to try and keep a lid on underage drinking. Since the leading cause of death for young males is motor-vehicle fatalities, this seems almost "rational" to me.

But then, I don't have access to Trunc's special "Kool-Aid".

 

[Keebler Elf]

To nitpick, I wouldn't say the aim is to limit retail says; I would say it is to restrict the sale of alcohol to those over the age of 19. I'm sure the gov't would love to increase retail sales, as evidenced by all the work it has put into The Liquor Store over the past 10 years.

A major reason for not privatizing alcohol sales is that it is one of the few businesses the gov't runs that actually makes money. Normally, you privatize to reduce costs in an otherwise unprofitable business. This isn't the case for liquor sales.

And, to be frank, I'd rather see alcohol sales restricted rather than sold at every convenience store and supermarket. It's not needed and the Liquor Store and Beer Store are more than up to the task. And the fact that many people share this viewpoint is another reason why the gov't has not privatized it.

Finally, in a perverse sort of way, I'd rather see the gov't making money off booze rather than a private corporation simply b/c alcohol is one of those vices that isn't going to go away and I'd rather not see it marketed to the extent that cigarette sales used to be just to make a quick buck. The public has more leverage over the gov't than it does over a private company.

But, to be honest, the origins of alcohol control (e.g. Prohibition) are no longer a driving factor when it comes to alcohol sales. There are many, many bigger problems for the gov't to deal with than this.

 

[Svend]

Not privatizing because it makes money for the government is a poor reason. They could still keep controls and tax it heavily if they need the money.
Perhaps the government should also step in and sell cigarettes in special stores as the next step.
Why not suggest they take over grocery sales, then they'd really make a killing. After all, overeating and consumption of junk food is a problem - you ever see a toddler drinking a Pepsi? That's child abuse.

 

[Truncador]

I am amazed at how long the corpse of social government keeps twitching, and at the lag in the pace of progress in political thought relative to that of culture and technology. Nobody dresses in up in zoot-suits and dances the Lindy-Hop to Dixieland jazz coming out of the horn of a hand-cranked gramophone. But in the field of politics, many continue to carry on as though stuck in a 1929 time loop

The State should get out of the field of alcohol, as fast as the paperwork can be drawn up, beyond:

-enforcing purity standards

-collecting a reasonable customary tax as a revenue raising instrument (and not to leverage or punish sinful/"unhealthy" behavior, as our moralists and physicians would like)

-enforcing existing laws prohibiting irresponsible conduct under the influence of alcohol

-preventing the sale of alcohol to children. The drinking age should be lowered to 16 in order to make enforcement easier.

 

[happygrump]

The current liquor laws in Ontario are, by any measure, outdated and long since past their usefulness.

But it may not make much sense to privatize the LCBO. Hey, even the Harris Tories promised to do that, but decided against it. Privatizing booze retailers has been done in Quebec and Alberta, with mixed results. Some prices went up, some went down. Some services improved, some got worse.

But the hard fact is that in 2001, the LCBO generated sales of $2.7 billion, with a profit of almost $900 million.

That's just operating revenue. That doesn't include the provincial taxes that are applied to the product.

What sense does it make to sell such a profitable enterprise?

 

[happygrump]

The drinking age should be lowered to 16 in order to make enforcement easier.

You're kidding, right?

 

[oldjones]

The drinking age should be lowered to 16 in order to make enforcement easier.

elicited this reply:

You're kidding, right?

A wise teenager once suggested the same to the Premier of Ontario, coupled with raising the driving age to 19 or 20.

Makes sense to me: no more learning how to "hold your booze" from a buncha kids staggering around the buonfire as hammered as you. And after you've actually acquired some maturity, then we allow you to assume the deadly responsibilities that come with poisoning our air by hurling a couple of tons of steel down overcrowded roads at heart stopping speeds.

Just think how many Prom nights end tragically because we do it the other way round.

McGuinty's still "thinking about it"

 

[someone]

I suspect the main reason to limit retail sales of alcohol products it to try and keep a lid on underage drinking. Since the leading cause of death for young males is motor-vehicle fatalities, this seems almost "rational" to me.

I have heard this argument before but I don’t buy it. I started buying alcohol in Ontario when I was 14 or 15. Sometimes bars or restaurants would ask for ID but liquor and beer stores never bothered. I think that this was primarily because bars and restaurants had to worry about losing their liqour licenses but government stores did not face the same threat. It is not that government stores, were trying to make a profit from selling to underage kids. There was just no incentive for their managers to worry about such sales.

 

[happygrump]

...I started buying alcohol in Ontario when I was 14 or 15... There was just no incentive for their managers to worry about such sales.

My experience is identical to yours. However, that was (at least for me) a LOOONNNGGGG time ago, and the potential profit to be made from underage purchasers is far eclipsed by the potential job loss and maybe even criminal charges laid.

In short, it simply doesn't make sense anymore to sell to anyone who even remotely looks underage.

 

[Truncador]

The campaign against underage drinking, as various anecdotes above demonstrate, is of rather recent vintage. The socialization of the alcohol industry was intended, first and foremost, to regulate and limit drinking among married adult men, ostensibly to increase productivity and protect the family from domestic violence, neglect, and disintegration. For example, the reason the Beer Store used to close at 5 was to enable the mother of the household to police the father's drinking habits by effectively putting her in charge of the beer shopping by default (since the guy would be slaving away at the factory during the day and thus unable to do it himself).

 

[someone]

A major reason for not privatizing alcohol sales is that it is one of the few businesses the gov't runs that actually makes money. Normally, you privatize to reduce costs in an otherwise unprofitable business. This isn't the case for liquor sales.

From a public policy perspective, this is actually an argument in favour of privatizing it if it means getting rid of a monopoly (i.e. selling the individual stores and not the corporation intact). The reason monopolies make economic profit is that they charge higher prices and supply a lower quantity than competitive markets. This results in what economists call a deadweight loss (this means that the gain to the monopolist is less than the loss to consumers). The fact that the LCBO makes as much as it does is a sign that the deadweight loss is great.

 

[someone]

Ontario rejects panel's advice to sell LCBO

It seems that Ontario is going to remain in the dark ages for the foreseeable future.

http://www.theglobeandmail.com/servlet/story/RTGAM.20050718.wlcbowine0718/BNStory/National/

 

[slowpoke]

Given that the vast majority of threads on the first page are on American politics (it would not be so bad if the threads did not always contain the same arguments made again and again), I thought I would try starting one on a different topic.

Most provinces in Canada currently have government monopolies for liquor and wine retailing (some provinces like Ontario have partial exceptions for Canadian wine). The prices and variety offered differ from province to province. I used to think Ontario was bad until I lived in Newfoundland. Nonetheless, in all cases, I think that the question has to be asked, what business does the government have in the liquor and wine retailing business? Moreover, in Ontario the government allows the major brewers to monopolize the retailing of beer. Even if there is an argument in favour of a government liquor monopoly, does it apply to a private monopoly on beer retailing?

Any thoughts?

What annoys me more than anything are the antiquated and arbitrary regulations associated with those wine kiosks at most major supermarkets. I think the kiosks are a great idea because they're so convenient but there are restrictions for most wineries that prevent them from having such purely retail outlets

I used to have shares in Magnotta Wines so I got the company blurb every month or two. I learned that, for many years now, start-up wineries couldn't just open up a retail outlet unless they perform at least part of the manufacturing or bottling (I forget the details) on the retail premises. But many years ago, there were many purely retail wine stores from Chateau Gai, London Wines, Brights Wines etc., and (I think) it is the corporate descendants of those original wineries that are still allowed to have purely retail outlets under some arcane grandgather clause. But a new winery has no chance so they have to rely on the LCBO almost exclusively. This is just nonsense.