VICTORIA: The B.C. Division of the Canadian Taxpayers Federation today released a survey of liquor prices and competition in British Columbia and Alberta.

"Prohibition on alcohol sales in British Columbia lasted for only four years - from 1917 to 1921," said CTF-BC director Mark Milke. "The prohibition on full competition has lasted much longer. The B.C. government could get out of liquor retailing, still collect the revenues it wants, give job creation a push, and give B.C. consumers and tourists a much more competitive liquor retail environment than now exists. Selling beer is hardly a core function of government."

Milke noted that one surprising comparison was that almost half of the B.C.-produced wines were cheaper in Alberta. "You might think all B.C. wine would always be cheaper in B.C., and you would be wrong. In examining just two chain stores in Alberta, B.C. wine available at both those stores was cheaper than the same wine found in BC Liquor Stores almost half of the time."

In the study, a bottle of B.C.-produced Mission Hill Merlot was found as cheap as $7.45 in Alberta compared to $9.45 in B.C., and a six-pack of Labatt Blue that retails for a low of $7.79 in Alberta was $8.55 in B.C.

The main findings of the study are available here.

• Main price comparison: Out of 1845 price comparisons made between B.C. Liquor Stores and two Alberta liquor store chains, 82.6% of liquor products were cheaper in Alberta.
• One objection to privatization is that wages might be lower in the new private liquor stores (as compared to existing wages in government-owned liquor stores) if privatization is introduced in British Columbia. The critics forget that many private grocery stores pay union wages.
• On competition: 100 stores in B.C. compete for the same number of people that 156 stores compete for in Alberta. Thus, competition is fierce in that province; it is virtually non-existent in British Columbia due to the dominant and government-favoured and owned BC Liquor Store chain.
• On competition: In total, there are 907 completely private stores in Alberta, or one store for every 3,400 people. In British Columbia, there are 224 government stores, with 544 private stores though most of those cannot carry spirits. In all, there are 768 stores in B.C., or one store for every 5,300 people.
• The history of Prohibition in British Columbia: In British Columbia, liquor prohibition existed between 1917 and until a 1920 referendum re-introduced liquor sales to B.C. The first government stores opened on June 15, 1921.
• Revenues: Alberta garnered $486 million in revenues from its mark-up on provincial liquor sales in retail stores (and not including served beverages in bars for example) in fiscal year 2001. In British Columbia, the government garnered $741.6 million from the B.C. Liquor Distribution branch. That was comprised of $642.4 million in transfers from B.C. Liquor Stores as well as another $99.2 million from the 10% sales tax applied to liquor sales in those stores.
• Product selection: Alberta has 18,876 products listed, while B.C. Liquor Stores reports 11,977 currently listed (including those about to be de-listed and those about to be listed).
  
  CTF Recommendations:
• Sell B.C. Liquor Stores in individual locations or in units of 10 or 30 (at maximum) to promote competition. Offer the stores to existing employees, while concurrently opening up the market for the sale of alcoholic beverages to full competition.
• Change the mark-up system from the current "ad valorem" system to the simpler "flat" mark-up system based on alcohol content.
• Do not go "half-way" towards competition, as it is the worst of all options. Expanding spirits availability and lifting the moratorium on more private stores -without privatization of the government-owned B.C. Liquor Stores - would be a significant policy mistake. That scenario would hobble both private retailers who must still compete with a government-owned and operated "Leviathan" and yet make some B.C. Liquor Store branches uneconomical - the worst of all worlds and one that pleases no one. It would also send out a confusing and contradictory signal to those who would invest significant dollars in liquor retailing in British Columbia. The government should instead open up the market to full competition with the parallel track to full privatization for B.C. Liquor Stores.