Complaining about the price of alcohol is a close second to hockey as our national pastime.
The government-run Liquor Control Board of Ontario (LCBO) outlets have become Exhibit A in the case against bloated government unnecessarily worming its way into the lives of regular people.
As evidenced by the $11.7-billion deficit reported in the 2013 Ontario Economic Outlook and Fiscal Review, the provincial government has a problem managing its finances.
But there is a serious problem if alcohol becomes one of the defining issues in the next election.
A recent article appeared on vice.com calling for an end to the government “monopoly” of liquor sales in the province. The problem with the calls to throw off the chains of bureaucratic oppression is that the LCBO doesn’t actually have a monopoly. It’s an oligarchy.
While the LCBO reported sales in excess of $4.8 billion in 2011-12, it is not the exclusive outlet for buying wine and spirits in the province.
Critics accuse the LCBO’s stores of operating in a market where there is no competition, but customers actually have some choice as to where they buy their alcohol.
“A true monopoly means you control everything,” Rod Phillips, a professor at Carleton University and a specialist in the history of alcohol, said. “[The LCBO] dominates the market but it doesn’t control everything.”
This hasn’t stopped the Progressive Conservative Party of Ontario from promising to abolish the LCBO.
“Why does the sale of beer, wine and spirits in Ontario need to be run by a ‘control board?’” a policy paper released by the party asked in 2012. “In whatever direction you leave Ontario, consumers have more choices in where they can buy alcohol.”
But with over 2,500 different brands currently available, how much more choice do you really need?
Phillips said we should look to Alberta, which operates a semi-private system similar to Quebec, where the variety of choice extends only to the big cities, while small towns are left out in the cold.
With the LCBO, there is a mandate to provide the same service in a small town as in a big city. There is no guarantee that small private stores would make the effort to ensure that they have an adequate selection available to customers.
Keeping with its consumer-friendly approach, the party said prices will tumble once privatization is allowed.
But the price of alcohol is largely made up of taxes. And when has the government—any government for that matter—willingly given up revenue by repealing taxes? Ontarians have gotten used to the current prices of alcohol and without a major shift in the province’s tax policy, prices will stay the same.
The markup at the LCBO is $13.52 for a 750 ml bottle of domestic whiskey.
In Alberta things are pretty much the same. The Alberta Gaming and Liquor Commission reports that for spirits between 22 and 60 per cent alcohol content, the mark up is $13.30.
The difference in price is actually related to other taxes, something the LCBO can do nothing about.
If taxes and price structure remain the same, what’s the point of privatization? Just to make us feel like we have freedom from government oppression?
There are much more pressing issues to deal with. Once the budget’s been balanced, our manufacturing jobs have come back and students can go to university without fear of taking on crushing financial debt, then we can worry about how much we pay for liquor.
By then, we’ll all need a drink.
