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PostPosted: Mon Apr 15, 2013 9:48 am
 


Ontario will get the tax money either way. That's separate from the 1.63 billion in profit they make from selling the stuff.

Doesn't Ontario have both private and public liquor sales? We do in BC. The private outlest can't sell it any cheaper because the wholesale is still exclusively owned by the province. BC wanted to sell off the wholesale portion until people pointed out how stupid that was, since it made money for the province. But the BC Libs will sell their grandma if it can make for a deficit free budgt one year, even if over time the govt actually loses money on the deal. This year, in order to "balance" the budget they're selling off 800 mill of govt assets. What will they do next year if by some miracle they get reelected?


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PostPosted: Mon Apr 15, 2013 9:55 am
 


We only have the LCBO.............that's why we call it a monopoly.


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PostPosted: Mon Apr 15, 2013 9:57 am
 


Lemmy wrote:
Not really. Booze prices didn't rise after privatization. Privatization increased selection, meaning there were more high end products available. That led to an increase in average price. But prices for most products remained about the same. Prices of some products fell.

Also note that government revenues didn't fall in Alberta after privatization. The province still collects excise (and in Ontario, would still collect sales tax as well) on liquor and is still the wholesaler, so they get their cut before the booze even heads out to the privatized retailer.

I still view this a a moral, philosophical issue. It's not the purpose of government to sell liquor. The biggest reason our governments are such clusterfucks is that they're conglomerates. How can we expect them to be good at what they do when there's so many goddamn things that they do? Private business learned way back in the 1980s that conglomerates are inefficient. Specialization breeds efficiency. When our government is involved in the liquor trade, casinos and gaming, running railways and public transit, power generation, hospitals, schools, etc, etc, how can we expect them to be good at any of it?

There's a ton of research supporting the benefits of privatizing the liquor trade. In most cases, not just in the liquor industry, privatization is the preferred scenario. Some important works on privatization, in general, include:
"Privatization: An Economic Analysis" - J. Vickers & G. Yarrow, 1988, MIT;
"The Impact of Privatization: Ownership & Corporate Performance in the UK" - S. Martin & D. Parker, 1997, Rutledge;
"International Handbook on Privatization" - ED: D. Parker & D. Saal, 2003, Edward Elgar;
"The Interdependence Between Ownership Status and Market Structure: The Case of Privatization" - C. Fershtman, Tel Aviv, in Economica (57).


Another thing that privatization did was make a lot of people/corporations richer, because the new liquor stores started paying people minimum wage and still charged roughly the same prices as the old ALCB stores did (largely due to the excise taxes the government still charges).

While the big corporations were kept out of running liquor stores initially by restrictions like separate sales outlets (Safeway/Superstore/Costco/etc could sell booze but had to build separate stores and limits in the numbers of permits granted). However, companies like Liquor World and Liquor Depot sprang up almost overnight and now blanket most, if not all of the province.

We certainly have far more liquor stores nowadays (somewhere around 900) than we used to under the government run system and they are open longer and have better selection overall. If they paid similar wages to the old ALCB, they would have a major positive impact on the economy. At minimum wage, I'm sure they provide a positive benefit, but it's likely far smaller than it used to be. People don't pay nearly as high taxes on $30/year as they do on $60-80k.

Overall, as someone who bought beer under both systems, my reactions are generally mixed. I like the better operating hours and more locations, but question whether having a liquor store every block is that great for society as a whole.


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PostPosted: Mon Apr 15, 2013 10:18 am
 


BeaverFever wrote:
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Significant wholesale discounts and significantly higher prices. Given the LCBO's purchasing power, prices should be considerably lower.


The profit margin goes to the general revenues of the province, (see: $1.6B profit) which is $1.6B that taxpayers don't have to contribute. Would you rather that $1.6B be charged to all Ontarians through the tax system?



Do you think that privatization will result in a net loss for the Province?

You do realize that Ontario will still collect taxes on the sale and distribution, right? All while having much lower labour costs on the LCBO front.


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PostPosted: Mon Apr 15, 2013 10:28 am
 


It would result in a net loss of 1.6 billion, since that is the profit they make on sales.

How is this bad? They pay people a decent wage, which gets recycled into the economy, all while turning a tidy profit which means they need less tax revenue from other sources.

Are you really such a booze hound that lowering the price is so importatnt to you? I thought you were against drugs. Surely you realize lower prices would mean more consumption? What is it about booze that you want people to use more, but are deathly afraid that pot legalization would see an increase in pot use?


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PostPosted: Mon Apr 15, 2013 10:31 am
 


The government would see no monetary benefit from Privatization of the labour force. The net benefit will go to the owners of the company selling. Obviously putting someone else in between the customer and the government will result in a net loss, and if not then the prices will need to rise in order for there to be a profit.


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PostPosted: Mon Apr 15, 2013 10:41 am
 


bootlegga wrote:


We certainly have far more liquor stores nowadays (somewhere around 900) than we used to under the government run system and they are open longer and have better selection overall. If they paid similar wages to the old ALCB, they would have a major positive impact on the economy. At minimum wage, I'm sure they provide a positive benefit, but it's likely far smaller than it used to be. People don't pay nearly as high taxes on $30/year as they do on $60-80k.

Overall, as someone who bought beer under both systems, my reactions are generally mixed. I like the better operating hours and more locations, but question whether having a liquor store every block is that great for society as a whole.


So raising the min wage bad/paying people more than the min wage for no economic reason good? [huh]

Min wage at $10 = $20,800 not 30k btw.


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PostPosted: Mon Apr 15, 2013 10:42 am
 


Regina wrote:
The government would see no monetary benefit from Privatization of the labour force. The net benefit will go to the owners of the company selling. Obviously putting someone else in between the customer and the government will result in a net loss, and if not then the prices will need to rise in order for there to be a profit.


Again, they would see a 1.63 billion loss, as well as the loss of tax revenue as employees are paid less.

The private companies could make a profit and lower prices a bit tho by paying people about half of what the LCBO does. How much profit is the question - how much of labor sales cost is involved in the price of a bottle of booze? I would guess it's fairly small.


Last edited by andyt on Mon Apr 15, 2013 10:43 am, edited 1 time in total.

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PostPosted: Mon Apr 15, 2013 10:42 am
 


The $1.6B of revenue to the province that I'm talking about is not the tax revenue - that is over an above and would not be affected.

The $1.6B is the SALES REVENUE, i.e. the company's profits that are handed over to the government from the LCBO buying wholesale and sells retail.

Example, say LCBO buys vodka for (hypothetically) $19 per bottle and sells for $35 plus tax. The "plus tax" would be the same if LCBO privatized, but the profit from the $16 mark-up that currently goes to public revenue would be lost to the private sector.


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PostPosted: Mon Apr 15, 2013 10:49 am
 


LCBO sells everything they inventory with a markup of 51%-53%. Also if you are a vendor to them (eg. Niagara vineyard) you are not allowed to sell your product cheaper than the LCBO sells it for. Therefore you must raise your price to match theirs. Magnotta wines went through a legal case with them on this issue about 10 years ago.


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PostPosted: Mon Apr 15, 2013 11:13 am
 


BeaverFever wrote:
The $1.6B of revenue to the province that I'm talking about is not the tax revenue - that is over an above and would not be affected.

The $1.6B is the SALES REVENUE, i.e. the company's profits that are handed over to the government from the LCBO buying wholesale and sells retail.

Example, say LCBO buys vodka for (hypothetically) $19 per bottle and sells for $35 plus tax. The "plus tax" would be the same if LCBO privatized, but the profit from the $16 mark-up that currently goes to public revenue would be lost to the private sector.



I know what you're talking about, but your so far off.

The money won't just disappear. It'll come in via sales taxes, income taxes, business taxes, etc.

Private small business will profit from the sales and in turn, pay taxes, employees, etc in the process.


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PostPosted: Mon Apr 15, 2013 11:20 am
 


OnTheIce wrote:

I know what you're talking about, but your so far off.



He's heard that before..............


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PostPosted: Mon Apr 15, 2013 11:32 am
 


OnTheIce wrote:


I know what you're talking about, but your so far off.

The money won't just disappear. It'll come in via sales taxes, income taxes, business taxes, etc.

Private small business will profit from the sales and in turn, pay taxes, employees, etc in the process.


That's crazy logic. The govt now makes 1.6 billion profit directly. You're if sales are privatized the govt will get this money back indirectly in taxes. If so, where's the profit for the private sector? Crazy logic.


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PostPosted: Mon Apr 15, 2013 11:41 am
 


andyt wrote:
OnTheIce wrote:


I know what you're talking about, but your so far off.

The money won't just disappear. It'll come in via sales taxes, income taxes, business taxes, etc.

Private small business will profit from the sales and in turn, pay taxes, employees, etc in the process.


That's crazy logic. The govt now makes 1.6 billion profit directly. You're if sales are privatized the govt will get this money back indirectly in taxes. If so, where's the profit for the private sector? Crazy logic.


Facepalm.


If that's the case, why isn't the government involved in every business and industry?


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PostPosted: Mon Apr 15, 2013 11:48 am
 


So what you're saying is that private business would increase sales and profits so much that the government would continue to get 1.6 billion on revenu from it? That's a face palm. And if it were to happen, how much extra booze would that represent - how much more would Ontarians have to drink to make it come about? (Because you're saying that private enterprise would lower prices, thus their margin, so they'd have to make it up on volume) And would that be a good thing?

You've twice now evaded why you want Ontarians to pay less/consume more for this particular drug, when you're so freaked out about legalizing pot.


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