The battle for booze sales in Canada

In a recent CanadianGrocer.com poll, we asked readers whether grocery stores should be allowed to sell alcohol. Seventy-four per cent of you said yes; 26 per cent said no. That’s kind of how I feel. My inner free-market-economist is all, “Heck yeah, let’s do this!” But my Puritan side thinks liquor is safest in government hands.

For some of you, (Hello, Quebec) none of what I’ve just said makes sense. Let me explain: Outside Quebec and a few other provinces, booze isn’t just regulated by government; it’s sold by government. In Nova Scotia, if you want wine, you must visit a provincially run Nova Scotia Liquor Commission store.

If you have a hankering for whisky in Manitoba, it’s off to the province’s Liquor Mart. For liquor and wine in Ontario, you have to go to a Liquor Control Board of Ontario (LCBO) store. The LCBO also sells beer, as does the Beer Store, an outfit run by major brewers like Molson Coors and Labatt.

Provinces have controlled the booze trade for so long, no one can remember any different. But change is afoot.

In January, Ontario said it would open 10 LCBO stores within grocery stores. Those would be manned by LCBO staff, so customers would pay twice: once for their food at the supermarket checkout, and once for their booze at the LCBO counter.

Ontario’s announcement follows a similar scheme in Manitoba. And Saskatchewan is now allowing more private liquor stores to open.

Why stop there? Why not let supermarkets and corner stores sell beer and wine all on their own?

That’s what some politicians are calling for. Last month, Nova Scotia’s Conservative leader, Jamie Baillie, said it’s time to at least consider the idea. Ontario’s Tory opposition leader, Tim Hudak, has pledged to let supermarkets and corner stores sell booze if he’s elected.

Regardless of who’s in power, all provinces with monopolistic retail liquor rules should re-examine them. If they do, they’ll find the pros are many and the cons few.

Critics argue that if supermarkets are allowed to sell beer and wine, underage drinking, drunk driving and crime in general will rise. This is certainly worth investigating, but in provinces where private beer and wine sales are allowed, anarchy doesn’t seem to have taken hold. For instance, there’s little more drunk driving in Quebec than in Ontario, and more in Manitoba than Quebec.

Last year in Ontario, the LCBO put $1.6 billion into provincial coffers. This leads to the second argument against private liquor sales: lost tax revenue. This oft-cited con doesn’t take into consideration the economic spin-offs of private beer and wine sales.

Neil Kudrinko, an independent grocer in Westport, Ont., says if he were to sell beer and wine, he’d have to expand his store by 5,000 sq. ft.

Dave Bryans, president of the Ontario Convenience Store Association, says his members are itching to invest in the kind of store construction and renovations that beer and wine sales would require.

But the real reason why government liquor monopolies should be disbanded: They’re not good for consumers. Shoppers would get much greater selection if stores were allowed to sell beer and wine.

Recently, Ontario Finance Minister Dwight Duncan ludicrously suggested that Ontario’s wine industry would be destroyed if corner stores and supermarkets were allowed to sell wine because they would only stock the best sellers.

By that argument, cheese sales should be government run too, since clearly grocers aren’t offering enough Canadian goudas and bries. Duncan’s comment shows an appalling lack of understanding of how retail works.

Come to think of it, I’ve changed my mind. Put me down as 99 per cent in favour of private liquor sales.

Rob Gerlsbeck is Canadian Grocer's editor.