Manitoba Government Liquor Monopoly Decides That Absurdly High Beer Prices Aren’t High Enough

Blog, Regulation, Steve Lafleur (historic), Uncategorized

The Manitoba government has decided to increase the price of a 24 pack of beer by $3.90. For those who consume a case per month, that is the equivalent of a $46.80 tax increase per year. While some level of “sin tax” on alcoholic beverages may be warranted (particularly with liquors 70 proof and above), Manitobans already pay an immense premium for beer.

As of today, 24 cans of Molson Canadian cost $36.92 at MLCC stores. That price will reach $40.82 at midnight. Since there is no private competition, it’s impossible to determine the market price for beer in Manitoba. However, a liquor store in Grand Forks, North Dakota (which is very popular with Manitobans) retails the same product for $20.99 (all prices before tax). The $15.93 pre-tax price premium will reach $19.83 when MLCC retailers open tomorrow. This means that anyone drinking a case of beer per month will now pay $237.96 per year in excess of what a North Dakotan would pay. That is a pretty hefty premium. Moreover, North Dakota is a small market, which has higher prices than many other US jurisdictions. It isn’t hard to find a 24 pack of Molson Canadian (or much better beer, for that matter) in Upstate New York for under $15. That would bring the price premium up to $309.84 per year.

Maybe it’s worth charging Manitoba beer drinkers a several hundred dollar premium annually. I haven’t seen any data that suggests this is the case, especially since drinkers tend to substitute relatively harmless beer for relatively harmful liquor when beer prices increase. But if the provincial government is going to continually raise prices, they really should provide Manitobans with a solid, empirically based justification.