NB Liquor Lite

Frontier Centre, Media Appearances, Uncategorized

NB Liquor's strategic review gingerly moves the province in the right direction on the sale of alcohol, one we hope will eventually bubble over into bigger changes.

Liquor corporation CEO Daniel Allain says it will likely cut beer prices to compete with competition from Quebec, where suds sell for far less.

He has opened the door to selling alcohol at more convenience and grocery stores, particularly in urban areas.

There is also a pledge to open more large discount stores like the one in Salisbury – most likely near the American border – and to sell a minority stake in the corporation to private interests, all in the name of generating more revenue.

Last year, the provincial government lapped up $207 million from the corporation and it's thirsty to drink in even more. The government, it can't be forgotten, is struggling to eliminate a projected $470-million deficit after three years in the red. Without a change in finances, the province risks damaging its credit rating, incurring higher borrowing costs and getting into a vicious cycle of less money for public services and more funding dedicated toward debt repayments.

Making money off of booze isn't that difficult, and we question why the government hasn't been more aggressive seeking changes.

NB Liquor doesn't have the same cachet with the public as NB Power, which delivers an essential service and whose proposed sale by the previous Liberal government was unpopular. NB Liquor is selling a product that is purely for enjoyment, something that is best left for private industry, not government, to handle.

There is a good model to follow in Alberta, which privatized liquor sales 19 years ago. Privatization led to more stores and greater product selection for consumers, while employment grew from 1,300 to over 4,000 jobs. It also encouraged more entrepreneurship, with many business people successfully making a good profit.

Government revenues did not go down because most of it came from liquor taxes, which were raised to win back the lost profits.

A study by the Frontier Centre for Public Policy showed that the Alberta government expanded the tax base by 840 new tax-paying businesses. Consumers, meanwhile, enjoyed lower liquor prices and five times the product selection following privatization.

The Alberta government argues that the rate of liquor consumption among Albertans is not much different than in other provinces, with the exception of Quebec (where it is much higher), and surveys show Albertans are happy with the privatization model.

NB Liquor has been valued at $1.9 billion. Surely, the New Brunswick government could make more money if it let entrepreneurs, not bureaucrats, run the liquor show.