[Proculation]

andyt andyt:

Proculation Proculation:

You are saying some scary things there

Don't you remember what socialism did in countries where it was implanted ? It begins with "millions" and finishes with "deaths".

Well that's true. I've always said "first the govt run liquor stores, then the gulag."

You are saying you have no problem with the state running production of goods. That is the definition of socialism.

[andyt]

Proculation Proculation:

andyt andyt:

Proculation Proculation:

You are saying some scary things there

Don't you remember what socialism did in countries where it was implanted ? It begins with "millions" and finishes with "deaths".

Well that's true. I've always said "first the govt run liquor stores, then the gulag."

You are saying you have no problem with the state running production of goods. That is the definition of socialism.

I thought we were talking about the selling of goods here. I didn't know Ontario ran the breweries and distilleries too.

Socialism!

[DerbyX]

Proculation Proculation:

I don't really know the LCBO but with the SAQ (Quebec's LCBO), the government is not doing a good job at all. It's a monopoly and the same bottle can be 20% less expensive in Ontario and even 50% less in the USA. That's pure stealing.

I cited Lemmy because he's a economist and knows more than both of us on that subject.

Lemmy is making a moral argument which is different then a business one. By your own admission things are cheaper in Ontario.

I don't even need to point our that in private business there are no end to bad products, consumer rip-offs, bankruptcies, price gouging, and any other labour related issue.

Need I remind you again that Canada's banking industry has remained a rock when their US counterparts fail on a daily basis and that is a direct result of the government controls we enacted.

Private industry is not a magic formula for success. The LCBO is being run fantastic and I am a well satisfied customer. I'd rather have the government get the profit that would surely go elsewhere and would require the government to make up that lost revenue by either raising taxes or lowering services.

[Proculation]

@andyt: i'm not talking of Ontario. I'm talking of what you said about not having problem with socialism. That's scary, yes. I can't believe people still want to try socialism. That's a big lack of historical knowing.

[DerbyX]

The lack of historical knowing is in reality a lack of understanding what socialism is.

People implementing capitalism die by the millions to. Once again, Somali and Haiti are the prime examples of capitalism at its finest.

[Lemmy]

DerbyX DerbyX:

I don't support privatization. Ontario will lose out on the billion or so revenue it gets in profit.

That wasn't the experience in Alberta. Because the government still: a) collects exise taxes on the liquor; and b) controls the wholesale trade in liquor (the private liquor retailers still purchase their inventory from the government) they didn't lose out on a nickel. Government revenues from liquor stayed the same in Alberta as when the province controlled the retailing too.

[andyt]

Lemmy Lemmy:

DerbyX DerbyX:

I don't support privatization. Ontario will lose out on the billion or so revenue it gets in profit.

That wasn't the experience in Alberta. Because the government still: a) collects exise taxes on the liquor; and b) controls the wholesale trade in liquor (the private liquor retailers still purchase their inventory from the government) they didn't lose out on a nickel. Government revenues from liquor stayed the same in Alberta as when the province controlled the retailing too.

I read letters to the editor in Vancouver that said they found selection to be worse in Alta than in BC (govt run).

[DerbyX]

Lemmy Lemmy:

DerbyX DerbyX:

I don't support privatization. Ontario will lose out on the billion or so revenue it gets in profit.

That wasn't the experience in Alberta. Because the government still: a) collects exise taxes on the liquor; and b) controls the wholesale trade in liquor (the private liquor retailers still purchase their inventory from the government) they didn't lose out on a nickel. Government revenues from liquor stayed the same in Alberta as when the province controlled the retailing too.

Well it depends on a couple of questions, namely how well were they running the business and were they counting profit as part of the revenue (profit being different then tax revenue in this case).

The LCBO differentiates between the two. Quite frankly I see the same reason private industry purchased the 407 (how bad a call was that?) as them wanting to purchase the LCBO, and that is they see the profit the government makes and they want it.

If the private retailers are still forced to purchase alcohol from the government then what is the point? The government will make up any revenue lost through excise tax increases and the retailers must pass that cost on to us in order to make their profit margin.

The only way for us to get a cheaper product is for privatization to somehow run the whole thing cheaper and I don't believe they will unless they simply sell it via walmarts by minimum wage employees.

[DerbyX]

Sober second thoughts on privatization

$1:

In late July, the British Columbia government announced it was going to slowly phase out government liquor stores and privatize warehousing and distribution. There are no compelling reasons for the move beyond the ideological and symbolic: breaking the union, creating new opportunities for private sector profit-making, and divesting of all "non core" government activities. But the BC government's move comes nearly a decade after a similarly questionable move in Alberta, and at a time when ideological arguments in favour of privatization and deregulation are under serious scrutiny.

"Why should the government be involved in selling liquor," the rhetoric goes. But maybe it's time to ask, "Why not?" The privatizers traditionally claim that government has no business in business. The Catch-22, however, is that, if the privatizers have their way, governments get stuck with only the unprofitable enterprises, fuelling the private-sector acolytes' claim that, "See, we told you government can't run anything."

In September 1993, Ralph Klein's government suddenly announced that it was privatizing Alberta's retail liquor operations (while retaining its wholesale monopoly and implementing a liquor tax). Since that time, there have been two academic studies of this policy (one of which I co-authored). Give or take some emphases, the findings in both studies are actually quite similar.

Price: Both studies found that the average retail price of liquor rose immediately after privatization, even when considering inflation. That situation remains pretty much the same today.

Distribution and Availability: Both studies also reported a rapid rise in retail liquor outlets, operating longer hours and more days of the week. The number of stores rose from 204 ALCB (Alberta Liquor Control Board) stores at the time of privatization in September 1993 to 628 in April 1996, rendering them second only to gophers as the most prominent feature on the prairie landscape. Like gophers, however, many of these stores were also fragile. Low profit margins and low capitalization meant that many of the smaller operators became road-kill.

Selection: Overall, the total selection of liquor throughout Alberta may have increased since privatization. But in practical terms, selection for consumers has actually declined. There may be a few high-end stores carrying some previously unavailable rare items, but most stores today carry mainly standard brands and little stock. After all, small owners do not want to tie up capital in stock for long periods of time. By contrast, before privatization, every ALCB store carried the same large product line, while a large "Cadillac" store in each major centre stocked more exotic brands.

Social problems: Break-ins and robberies at liquor stores soared across the province after privatization. Liquor related offenses, such as assaults, also increased in Calgary and Edmonton. And investigations found an increase in ease of access to liquor for minors.

Wages and Employment: The studies agree there are more workers in liquor retail, but they work fewer hours, have fewer benefits, and lower salaries than did Alberta government workers. So workers, by and large, are not better off. However, as noted above, neither have the "savings" been passed on to consumers.

Moreover, alcohol is an addictive substance that should be regulated--a point over which there is little debate--and those we ask to enforce these regulations need to be paid well enough to make the often difficult task of front-line enforcement worth their while. Low pay generally means poor training and high staff turnover--not conditions conducive to tough regulatory enforcement. The presence of many small marginal stores exacerbates this problem.

Government Revenues: When the Klein government privatized liquor retailing in 1993, it promised to keep its annual take (drawn from taxes) "revenue neutral"--a phrase borrowed by the BC government in its announcement. In the last year before privatization, the Alberta government received remittances from liquor of $439 million. Since then, however, under pressure from the private liquor lobby, the government has lowered its tax rates on liquor four times, even as demand has increased. Thus, in 2000/01, government revenues from liquor amounted to only $468 million, or $29 million more than in 1992--a meager gain over the period in question given inflation and the large growth in sales. Also, keep in mind the government must now pay for increased regulation and enforcement out of this diminished revenue.

The bottom line is that liquor privatization in Alberta has led to higher consumer prices, more stores (but less genuine selection), marginalized workers, a host of social problems, and (in real terms) decreasing government revenues. All in all, given Alberta's experience in privatizing liquor, British Columbians might want to give the idea some sober second thought.

[DerbyX]

I think we just had a slight earthquake here in Ontario.

For a few seconds my whole building shook. Stay tuned for any news out of Ontario.

Of course it might just be the drugs and alcohol.

[andyt]

The author is obviously a socialist pinko fairy pursuing his agenda. First the liquor stores, then the gulags.

[Lemmy]

DerbyX DerbyX:

Well it depends on a couple of questions, namely how well were they running the business and were they counting profit as part of the revenue (profit being different then tax revenue in this case).

Your concern was that the government coffers were going to lose out as a result of privatization. In Alberta, they didn't. The government got just as much dough after privatization as before.

DerbyX DerbyX:

The LCBO differentiates between the two. Quite frankly I see the same reason private industry purchased the 407 (how bad a call was that?) as them wanting to purchase the LCBO, and that is they see the profit the government makes and they want it.

Of course there is profit to be made in liquor. But if that profit is paid to private firms AND the government still gets the same number of dollars as before, what does it matter? If anything, it's MORE profitable for the government to just collect the tax and not have to incur the costs of operating retail outlets. It's been win-win-win for consumers, government and new business owners in Alberta.

DerbyX DerbyX:

If the private retailers are still forced to purchase alcohol from the government then what is the point? The government will make up any revenue lost through excise tax increases and the retailers must pass that cost on to us in order to make their profit margin.

The only way for us to get a cheaper product is for privatization to somehow run the whole thing cheaper and I don't believe they will unless they simply sell it via walmarts by minimum wage employees.

Well, that's partly true. The profits come, in part, from paying a market wage to liquor retailers instead of an inflated civil service wage rate. The only way for prices to fall is to get the government out of the wholesale liquor trade too. But the Alberta solution seems like an excellent first step.

[DerbyX]

Lemmy Lemmy:

Your concern was that the government coffers were going to lose out as a result of privatization. In Alberta, they didn't. The government got just as much dough after privatization as before.

Not according to the article I cited. There is little reason to believe they would get the same revenue considering right now they get taxes and profit right now and proponents of privatization say that profit is from inflated prices which they would lower.

They are going to lower the prices and take the profit from the government and the government will still receive the same amount?

Doesn't equate.

Lemmy Lemmy:

Of course there is profit to be made in liquor. But if that profit is paid to private firms AND the government still gets the same number of dollars as before, what does it matter? If anything, it's MORE profitable for the government to just collect the tax and not have to incur the costs of operating retail outlets. It's been win-win-win for consumers, government and new business owners in Alberta.

Again, not according to the article I cited. I don't see how the government will ever receive more money by adding in what is just another layer of sales. The more people involved in a sale the less each person makes (or the costlier the item).

Lemmy Lemmy:

Well, that's partly true. The profits come, in part, from paying a market wage to liquor retailers instead of an inflated civil service wage rate. The only way for prices to fall is to get the government out of the wholesale liquor trade too. But the Alberta solution seems like an excellent first step.

Again, I disagree cited my article. Even if I agree that prices will fall, there are other penalties to pay for that, namely social. It does border in "nanny-state" territory though but I don't find alcohol is expensive at all.

[Zipperfish]

If they are mantaining monopoloy control, then it isn't privatization at all. More like contracting out the retail end of things. Becasue of that, it won't affect price, which would be my main motivator to support privatization. The gov't probably makes about $10 on every six-pack in BC.

[Lemmy]

DerbyX DerbyX:

The bottom line is that liquor privatization in Alberta has led to higher consumer prices, more stores (but less genuine selection), marginalized workers, a host of social problems, and (in real terms) decreasing government revenues. All in all, given Alberta's experience in privatizing liquor, British Columbians might want to give the idea some sober second thought.

The "higher consumer prices" aregument is a two-fold half truth. Since there are more high end products availaible, average price, of course, will rise. Adjusting for inflation, prices have stayed the same. Less "genuine selection"? Nonesense. There's no such thing as "genuine selection". The product is either available or it isn't. It's no different than buying groceries. I know if I want sushi rice, wasabi paste and nori sheet I have to drive to the Japanese grocery instead of the Zehr's.

Telling an employee who was making an inflated wage that he/she will now be making a fair market wage is not "marginalizing" workers. It's cutting wasteful government.

Social problems may be more prevelent as alcohol is easier to come by, but the same is true of host of other products that government doesn't retail. I've already cited reference to the fact that government did not lose revenue as a result of privatization.