Montreal Gazette: Quebec should get rid of the SAQ and privatize alcohol sales

Is it relevant for the state to be involved in the retail sale of alcohol in 2015?

In a report released Monday, Quebec’s Ongoing Program Review Committee answered this guiding question with a resounding “no.”

Chaired by former politician Lucienne Robillard, the committee was tasked by Premier Philippe Couillard with reviewing program spending and suggesting inefficiencies to cut.

It didn’t call for the privatization of the SAQ, unfortunately. Instead, the committee advocated liberalizing the sale of alcohol, leaving the SAQ to compete with private companies much the same way Canada Post competes with FedEx and UPS.

The committee’s rationale was simple: The SAQ’s predecessor was created at the end of Prohibition, a time when North Americans viewed drinking through puritan eyes. The only way society could tolerate this sinful product was through government control. Little justification remains nearly a century later. If it’s only about collecting profits — the SAQ brought the state a total of $1.622 billion last year — the committee said, then why not nationalize the sale of cigarettes, gasoline, cars and pens, as well?

The president of the Treasury Board, Martin Coiteux, responded to the recommendations by saying that the government is open to looking at other business models. Like the committee, Coiteux says the government wants to put the interests of consumers above all else.

If that really is the case, the government should waste no time ending the SAQ’s monopoly. In fact, it should go a step farther and privatize the state-run behemoth.

Quebec consumers are getting gouged at the state-run liquor store — and they know it. The SAQ itself admits that the province loses $90 million a year from people buying their alcohol in jurisdictions that are cheaper, notably Ontario.

The SAQ’s profit margins hover at about 50 per cent — even though it has some of the highest administrative costs in the country — due to massive artificial markups that hurt both consumers and producers. The SAQ buys bottles of vodka made in Quebec from one producer for $11, and then resells them to consumers for $42.75. It’s offensive to people’s rights as consumers, and it would be madness if it happened with any other product.

Quebecers are already fed up. In a 2014 Leger poll, 42 per cent of Quebecers said they wanted to privatize the SAQ, with 20 per cent unsure.

It’s not an idea that’s so foreign to Quebecers. Thousands of us vacationing in Maine this summer noticed the aisles of quality wine and spirits at grocery stores and corner stores all over the state. The prices are cheap, the selection is vast, the state collects its taxes, and civilization survives.

Why shouldn’t Quebec replicate that?

The same would be true of private liquor stores, which would have to operate under market conditions. They’d take their fair cut, and consumers would save money. If Quebec followed the Alberta model, a small government markup could be added to each bottle, as well. As committee member Robert Gagné said, the government could make the exact same amount of revenue if the laws were loosened.

Quebec distilleries, breweries and wineries would also find a change advantageous. Quebec’s current archaic laws take away their freedom to sell their own products, which would no longer be the case without a monopoly. They would finally be allowed to sell bottles of their own alcohol to locals and tourists who come in for a visit. It just makes sense.

As always, people would need time to adjust to this cultural shift. And that’s fine. But if the Couillard government has any backbone, they’ll follow through with the Robillard committee’s recommendation — or go even farther — and free our booze.

Tom Kott is a consultant at Hatley Strategy Advisors, a Montreal-based public affairs firm.

Original post HERE


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