When the 19th German Chancellor Otto von Bismarck first popularized the idea of the welfare state, the role of government was envisaged as one where governments provided benefits for the poor and the elderly: pensions for seniors for example. Fast-forward a century and a half, and the areas governments are now involved in might have surprised the Iron Chancellor, (to say nothing of his subjects and others): selling beer is a prime example.

In the recent study by the Canadian Taxpayers Federation on liquor prices in Alberta and British Columbia, two price comparisons were used: The first compared prices at government-owned BC Liquor Stores and two Alberta chains, Willow Park Liquor with 11 stores and OK Liquor with three stores. That comparison, of over 1800 products, found that 82% of the items could be purchased more cheaply in "Wildrose country" than in B.C. (and that includes all taxes, fees, duties, and markups). The second examined 166 products from 100 stores across Alberta and found that 90% were cheaper there.

For example, a 750 ml Okanagan wine, Mission Hill Merlot, retailed for $9.45 in B.C. but ranged from a low of $7.45 in Alberta to a high of $10.45. Consumers do have to price-compare; some products can be lower and higher in Alberta than B.C. depending on where you shop, but that's life in a competitive marketplace.

But what accounts for the ability to find so many products at a lower price in Alberta Taxes, and a lack of competition. The study assumes taxes will not go down, which meant that competition is the only other force that could push B.C. prices down. And how is the state of competition in B.C. Poor.

Alberta, with almost a million less people has 907 fully private stores, while B.C. has 768 stores in total (224 government with the rest divided between agency stores, beer and wine, and manufacturer or VQA stores). Expressed differently, 156 stores in Alberta compete for the same number of people that 100 stores "compete" for in B.C.
Would privatization affect government revenues as some allege

Right now, the BC government takes in $642 million from the Liquor Distribution Branch not including sales tax revenues. Alberta grabs $468 million from liquor sales. How is that possible Does Alberta somehow magically create that money Is it contributed voluntarily from warm-hearted consumers who want to give the government extra cash Hardly. Alberta kept a liquor mark-up (read: tax) system in place after privatization (though it changed the system and rates). Despite four reductions in the mark-up rates over the past decade, the Alberta government now takes in more money from liquor sales than it did pre-privatization.

If the BC government privatizes BC Liquor Stores, it need only set mark-up rates that preserve its $642 million take. Obviously, the mark-up rates would be different because the government would no longer buy alcoholic beverages itself; nor would they have the cost of running retail stores. To get their $642 million though, the government would simply continue to apply its liquor mark-up on liquor before it hits the stores. The "government-will-lose-hundreds-of-millions-in- revenues" argument is patently bogus.

In any event, full competition in B.C. would give people choice (there are 18,000 products available in Alberta; 11,000 in B.C.), competition on price and service (you can order on web in Alberta and have it delivered to your home or office; there are also bulk discounts). Another plus: employment in liquor retailing in Alberta expanded from 1,300 full and part-time jobs pre-privatization to 3,500 jobs presently. Beer, wine and spirit sales are hardly a core function of government. The government should get back to its "core" knitting. Beer sales ain't part of that