[bootlegga]

andyt wrote:

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?

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

I never said that - I simply said that when it was government run, the rank and file got paid more and therefore paid higher taxes, while under the current system, they get paid minimum wage and therefore pay less taxes.

I support paying people a career-style wage for a career-style job, not an unskilled minimum wage McJob. Bagging booze is hardly a job worthy of more than minimum wage.

[andyt]

Quote:

Arguments in favour of privatization include that public enterprises are poorly managed, cannot compete in the marketplace, and cannot survive without continued government handouts of taxpayers money. None of these arguments is true in the case of the LCBO. The LCBO is highly profitable, and does not receive nor need any government subsidies.

11. Under liquor control, revenues are greater and prices are lower than under privatization, other things being equal, because of economies of scale. The privately-owned outlets are fragmented, and require higher rates of return on their capital costs than control boards.

12. A study found that in the United States prices were on average more than 11% higher in 27 "private-license states" compared with 16 "monopoly states", and that the treasuries of the monopoly states collected more per capita revenue from alcohol sale than the private-license states. The Ontario Committee on Taxation also found "private retailing system yields on the average a much lower return to the Public treasury"; the Committee had "no doubt as to the superiority of public over private liquor outlets". These findings are supported by recent price comparisons in Alabama and Iowa, and in Alberta.

In the past several years, the value of LCBO sales have been falling partly due to a general trend of falling alcohol consumption, and legal competition from breweries, wineries, and cross-border shopping. Falling sales have also been caused by the growing and significant competition from smuggling and illegal manufacturing. The underground economy in alcoholic products is likely to grow under privatization.

20. It is highly plausible that increased availability of alcohol under privatization is likely to increase alcohol abuse. The people of Ontario are against the sale of alcohol beverages in corner stores; and against lowering the legal drinking age of 19 years.

21. The economic and social costs of alcohol have been estimated in 1981 at $5.7 billion in Canada, and $1.7 billion in Ontario. In 1993 prices, the corresponding figures are $9.8 billion in Canada, and $2.9 billion in Ontario. The decontrol of the sale of alcoholic beverages through privatization will almost certainly increase the economic and social costs of alcohol abuse.

22. The LCBO pricing policies are designed to discourage alcohol abuse, generate revenue for the provincial and federal governments, and to support the domestic alcohol beverage industry, especially providing incentive to Ontario wine. The markup and all the provincial and federal taxes and levies account for about 83 cents of every dollar spent on spirits in Ontario. The corresponding figures for wine and beer are 65 cents and 69 cents respectively.

23. Ontario grape growers and wineries will be among the big losers if LCBO is privatized. Ontario wineries are vulnerable to foreign competition because of lack of economies of scale, and consumer perception of product quality which favours imported wine.

25. The most serious implication of a possible LCBO privatization is what will happen to the workforce it now employs given the realities of the job market in Ontario and in the country. The laying off of LCBO employees would mean huge losses to the treasury and economy of Ontario. But the unemployment spillover effect of the LCBO privatization will not be confined to the LCBO employees. The entire alcoholic beverage industries in the province will be affected.

26. Privatization in Alberta has resulted in higher product prices, smaller product selection, higher warehousing and distribution costs, and higher social costs. Alberta Premier Ralph Klein has conceded that the ALCB privatization is "counterproductive".

http://www.yorku.ca/nuri/lcbo.htm

[BeaverFever]

Quote:

Facepalm.


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

That's just an assinine question. Nobody here is saying the primarly purpose every single human enterprise is to primarily generate public revenue. We are talking about one particular enterprise, currently generating public revenue because it is public owned and pointing out that if it were privately owned, it would not generate the same public revenue.

If I buy your business from you, I am going to get the profits from it, not you. Even if we sign a deal where you continue to get a % of profits generated under my ownership (like a tax), you are still not going to be getting the same amount of money as when you got to keep 100% of the profits. What's not to understand?

[OnTheIce]

andyt wrote:

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.

I guess when you don't take into consideration the new jobs, the new business, the decreased government labour costs, the construction costs, etc, you'd come to your conclusions.

I never did say I wanted people to consume more but I would like them to pay less on the open market and let that market decide pricing. The government has no business in the selling of alcohol.

Who says decreased price will result in increased usage? Not me. I'm fairly certain the pro-pot people here have been saying quite the opposite. Lowering the price of pot won't affect usage so why would alcohol usage increase?

[andyt]

Lower prices = more cosumption, especially of the problem drinkers. Somebody who buys the odd bit of booze won't really be influenced by the price. The big drinkers will all of a sudden find it more affordable and go for it. A big part of liquor pricing is the desire by governments to moderate drinking. If he govt can no longer set prices, they'll just raise taxes if they think lower prices contribute to more alcohol problems. Also, read the report I quoted - prices don't get lower under privatization.

Again, for the govt to realize 1.6 billion in revenue from taxation, the increase in booze sales would have to be much, much higher to make up for the loss of 1.6 billion in direct income.

[dino_bobba_renno]

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.

They made 1.6 billion with a top heavy bureaucracy, if you eliminate that bureaucracy there's plenty of room for profit.

I really don't know what it cost or saved the Alberta gov. when we switched but I think it was a good move for consumers. Before the switch the closest liquor store to me was a 15 to 20 minute drive away, it was only open until 9 or 10, closed on holidays and Sundays, and busier than all hell at any given time you went in there. Now I can drive down to the liquor store which is only a 1/2 block away and is open on holidays and weekends until 2 am.

[BeaverFever]

Quote:

I guess when you don't take into consideration the new jobs, the new business, the

"new" jobs and business net of lost jobs and business from LCBO

Quote:

Lowering the price of pot won't affect usage so why would alcohol usage increase?

Alcohol is addictive. Not too many "Pot-aholics" out there panhandling for marijuana or beating their wives and children in a marijuana-fuelled rage.

[BeaverFever]

Quote:

They made 1.6 billion with a top heavy bureaucracy, if you eliminate that bureaucracy there's plenty of room for profit.

Not by a multitude of 10!!! Remember we're talking about billions of dollars here. The aggregate of all the senior management salaries that are excessive is what, $500,000?

[OnTheIce]

andyt wrote:

Lower prices = more cosumption, especially of the problem drinkers. Somebody who buys the odd bit of booze won't really be influenced by the price. The big drinkers will all of a sudden find it more affordable and go for it. A big part of liquor pricing is the desire by governments to moderate drinking. If he govt can no longer set prices, they'll just raise taxes if they think lower prices contribute to more alcohol problems. Also, read the report I quoted - prices don't get lower under privatization.

Again, for the govt to realize 1.6 billion in revenue from taxation, the increase in booze sales would have to be much, much higher to make up for the loss of 1.6 billion in direct income.

Let's use some evidence from an actual Canadian story: Alberta.

Quote:

In assessing the overall effects of Alberta’s privatization of liquor retailing, one can examine the impacts on the various parties affected by privatization. First, consumers have experienced price increases (on average) for beer, wine, and liquor, but the larger number of liquor store locations under privatization has implied lower transportation and transactions costs for many consumers. Retail price dispersion and retail price competition now exist so that it is possible for consumers to shop around for lower prices.Overall product selection has increased, although consumers might have to shop around for their preferred product(particularly for wine products because a given liquor store
will only sell a fraction of the large number of wines now stocked in the warehouse). Second, beer, wine and liquor suppliers are better off as a result of their improved access to the market in Alberta, but their costs of serving the market have likely increased. Suppliers must now sell their products to individual liquor stores or liquor store chains as opposed to a single buyer, the ALCB. Third, [b]the Alberta government appears to be no worse off as a result of privatization given that its liquor-related revenues have not declined

Fourth, former ALCB employees have lost their union jobs, and have either taken
nonunion jobs in private liquor stores at much reduced wages, or have sought
employment elsewhere. Fifth, employment in private liquor stores is about triple the employment in ALCB stores, so there is no question that privatization has created jobseven if at wages below the former ALCB wages). Sixth, hundreds of new small businesses have been created as a result of privatization, and these businesses are generating income for their owners and employees and tax revenues for the various levels of government. Finally, there is no evidence that the residents of Alberta have been exposed to increases in crime or liquor-related offenses as a direct result of privatization. Indeed, some survey evidence is available that suggests that Albertans are generally satisfied with Alberta’s privatization of liquor retailing.

http://choiceforontario.com/uploads/ALC ... _Study.pdf

[BeaverFever]

Quote:

Let's use some evidence from an actual Canadian story: Alberta.

Lobby group.

Quote:

Let's take a different look:

Bad idea for Saskatchewan to privatize liquor stores like B.C. and Alberta, report says

JENNIFER GRAHAM
REGINA — The Canadian Press
Published Tuesday, Oct. 30 2012, 3:52 PM EDT
Last updated Tuesday, Oct. 30 2012, 5:58 PM EDT

A new report claims private liquor stores in Western Canada have higher prices than publicly owned stores, while also pouring less revenue into government coffers.

The Canadian Centre for Policy Alternatives and the Parkland Institute released a report Tuesday on liquor privatization in Western Canada and suggested it would be foolhardy for Saskatchewan to follow Alberta or British Columbia’s lead to privatize liquor stores.

“A common lure behind liquor privatization is a promise of cheaper alcohol,” report co-author David Campanella of the Parkland Institute said at a news conference in Regina.

“Our research, as well as other studies, found this to be a false promise.”

Mr. Campanella said the left-of-centre groups compared 13 popular beverages and found private stores in Alberta and B.C. averaged the highest prices. It was, “perhaps surprisingly to some,” public stores in Saskatchewan and B.C. that had the lowest prices on nearly all of the items, he said.

Mr. Campanella said privatization has also been particularly costly to Albertans.

“By not maintaining its pre-privatization level of tax revenue per litre of alcohol sold, the government has foregone roughly $1.5-billion in liquor revenue since 1993,” he said.

Mr. Campanella said in 2011, Alberta had the highest per capita consumption and the lowest per capita revenue from liquor stores. In contrast, Saskatchewan earns nearly the same revenue per litre of alcohol sold as British Columbia, which is much more densely populated, he said.

“In general, the liquor industry is not a money maker for governments,” he said.

The report also says that from the beginning of British Columbia’s privatization initiative, the government found “serious compliance problems” at the private stores when it came to selling alcohol to minors.
Alberta privatized liquor stores in 1993, while B.C. curbed expansion of publicly owned stores and started to allow private ones in 2003.

Saskatchewan Premier Brad Wall hinted last week that all new liquor stores in the province could be privatized.

The premier said additional liquor stores are likely to be needed in larger cities because of population growth. He questioned whether taxpayer money should be spent on building those stores when investment is needed in health care, education and infrastructure.

But Mr. Wall also insisted that existing provincially owned liquor stores would not be privatized.

Mr. Campanella suggested Saskatchewan would be wise to think twice before making the move.

“Our research should give any jurisdiction considering privatizing their liquor retail system reason to pause,” he said.

http://www.theglobeandmail.com/news/nat ... le4764639/

[OnTheIce]

BeaverFever wrote:

“By not maintaining its pre-privatization level of tax revenue per litre of alcohol sold, the government has foregone roughly $1.5-billion in liquor revenue since 1993,” he said.

Why'd they lower their tax rate? Was it related to privatization? It's only showing 1/2 the picture here.

[andyt]

It looks like there's no clear case for either side: http://www2.macleans.ca/2012/12/10/alco ... uor-sales/

With 1.6 billion in profit for Ontario (and way more for some smaller provinces) I say if it ain't broke don't fix it.

[BeaverFever]

And this from a more recent editorial:

Quote:

....But would a transformed liquor distribution system benefit consumers? Actually, according to Ontario’s Auditor General, the LCBO has “the lowest overall beverage alcohol retail prices of all Canadian liquor jurisdictions, with the third-lowest prices for spirits and beer, and the lowest wine prices.” Despite these low prices, it still generates net earnings of over $1.6-billion per year. Because the LCBO is a government enterprise, these earnings go directly to the Ontario government, and contribute significantly to the province’s finances. By way of contrast, the privately owned-and-operated Beer Store actually operates at a loss, according to the most recent financial statement available. (Given the lack of competition in the Ontario beer market, this must take some planning).

The reason why the LCBO is profitable, despite paying relative high wages and charging relatively low prices, is that it has little excess capacity. Ontario has fewer retail liquor outlets per capita than any other Canadian province. Even though LCBO workers are well paid, because each LCBO outlet has such high volume, the labour cost per bottle sold is still reasonably low. Moreover, because the LCBO purchases and sells so much alcohol, it is in a position to negotiate lower prices from distributors (though it has not always done so), and pass those cost savings onto consumers in the form of lower prices, or to Ontario citizens, in the form of a greater contribution to government revenues. It’s not a perfect system, but it has its advantages.

http://www.theglobeandmail.com/commenta ... le6841953/


This last paragraphy brings up a point that wasn't really touch on...The bulk of Ontario's population lives in high-density areas, which mean fewer outlets are required and fewer staff members to sell the volume. So to illustrate, say the liquor store in your town (private or public) sells 1000 bottles a day. That is more profit per bottle sold than the total between 2 outlets (competing or otherwise) selling 500 bottles a day each from 2 different locaiton because the latter requires double the sales staff, double the property, etc.

[andyt]

Saskatchewan and the Atlantic provinces take in much more revenue per capita than Ontario does.