Eliminate MLCC? I’ll Drink to That!

Commentary, Crown Corporations, Frontier Centre, Manitoba, Marketing Boards, Worth A Look

When will Manitobans be allowed to purchase spirits, wine and beer from Sobeys, Safeway, or any other free-market retailer at reasonable prices instead of being extorted by the Manitoba Liquor Control Commission cartel?

In Palm Springs, Calif., my adopted home, I can purchase a 1,750 ml bottle (a "sixty-six" or "handle" in drinker's parlance) of Canadian Club rye whiskey at Costco for $16.23 including sales tax. On making my annual summer pilgrimage to Winnipeg, it almost kills me to shell out $53.10 including GST and PST to purchase that same bottle at an MLCC outlet.

So, why does a product manufactured in Canada sell for an additional $37 in its native land? It's all taxes that eventually contribute to health care, education and other social services, right? Wrong. And that's the costly rub.

The MLCC purchases that 1,750 ml bottle of rye from the distributor for a whopping $9.52. Don't shake your head, it's not a typo. There's a $0.49 freight charge giving the MLCC a total cost of $10.01 for a bottle of whiskey they'll eventually peddle to you for over 53 bucks, paper bag included.

There is a federal excise tax of $8.18 and another $1.13 in surcharges but what makes that bottle so expensive is the criminally high markup (which is actually a hidden provincial tax) that would make even the sleaziest of loan sharks blush.

The MLCC markup on that $10 bottle is — you may want to pour yourself a stiff one before continuing — $27.66. And just to kick you while you're down, you pay GST and PST on the hidden tax and the federal excise tax. In other words, you're paying federal and provincial taxes on hidden federal and provincial taxes. And you thought the bootlegger went the way of the passenger pigeon.

In its last published annual report (fiscal year ending March 31, 2006), the MLCC reported gross profits of $249 million. Pretty easy to accomplish when you're a government-protected monopoly. MLCC president and CEO Don Lussier boasted that the commission returned $196.2 million to the provincial government.

What happened to the $249 million? Oh, right, it cost consumers (and here's the part that drives me to drink) over $50 million to have the added annoyance of having to make an extra trip to a government-run institution whenever they want to enjoy a glass of wine or a whisky sour with their dinner.

The MLCC spent $30.8 million in salaries and benefits for its 800 full- and part-time employees. Not to mention over $10 million to lease and maintain office space and the 46 (soon to be 47) MLCC retail outlets. All tolled, the MLCC snatched an extra $50.2 million from consumers for no other reason than to fund itself.

The MLCC is an antiquated make-work project that exists for one reason: to perpetuate the existence of the MLCC. Drinkers in Manitoba are forced to purchase alcoholic beverages at immorally high prices that contain exorbitant, unethical markups that are due in large part to propping up the MLCC.

Manitobans (and the rest of Canadians for that matter) shouldn't be forced to pay a premium on any goods or services in order to run bloated bureaucracies, to lease and maintain redundant retail space and compensate superfluous staff.

There is absolutely no reason why consumers shouldn't be free to purchase their spirits at the same time and the same place they're buying their T-bones. A Safeway cashier can scan a bottle of wine and bag a crock of rum with the same professional aplomb as any MLCC clerk.

The hidden taxes that make up that $196 million are certainly a benefit to Manitobans and they could easily be collected by retailers in the form of a provincial excise. The tens of millions of dollars in annual savings realized by shutting down the bloated MLCC would be passed on to the consumer.

Eliminating the anachronistic MLCC, a monopoly that's been allowed to exist for far too long, will create competition and undoubtedly lead to lower prices.

That's something all Manitobans can drink to.

Bruce Clark, a writer and standup comedian now lives in Palm Springs, Calif., and spends his summers in his hometown of Winnipeg.