My latest Planet S/Prairie Dog column delves into the world of politics a little bit, taking another look at the consequences for consumers of liquor retail privatization. I have discussed privatization before (such as here and here) but given that the Saskatchewan government of Brad Wall seems insistent to go down this path, the issue remains pertinent.
For the most part the Planet S/Prairie Dog piece (which you can read here) re-visits issues I have discussed on this website in the past, including prices, selection and the overall economics of private liquor retail. But it is not just opinion that I offer. I refer to recent studies that show the economic impact of liquor retail and older studies examining prices, showing that privatized liquor retail leads to increased costs for consumers and forgone economic benefits for taxpayers.
The question I want to briefly explore here is why, given the fairly clear evidence against the private retail model, do governments keep pursuing it? I think there are three inter-related factors. First, there is a group of people who legitimately believe private liquor sales will be better. Some of this group are working from ideology – a belief that government has no role in liquor sales – but others sincerely believe they are/would be better off with private retail. They like the looseness of the system and/or the entrepreneurial spirit that can be unleashed in such a system. For some actors, there are legitimate advantages to the private system – I have spoken to many thoughtful and ethical people in the industry who explain how private retail helps them.
Second, liquor retail is a classic wedge issue. It divides the population, with the pro-privatization faction generally more passionate than the anti. It is also an issue that is easily over-simplified. “More choice, lower prices!” the advocates can shout, even if there is little evidence to support it. The result is it is a very tempting issue for politicians looking for an “easy” way to garner votes. I still find, 20 years later, people parroting the rhetoric used by Ralph Klein and Steve West back when they implemented privatization, even though it has largely been proven pure bullocks.
Third, we cannot ignore the corporate interests who lobby to open up liquor retail to private competition. There is A LOT of money to be made in private liquor retail, and most of that money will be made by a handful of corporations and wealthy businesspeople. Naturally this group wants to keep privatization on the agenda so they can reap the benefits. Even if the public says it doesn’t want privatization, the arm-twisting capacity of this group keeps the issue coming back round.
I try to keep this issue in perspective. It is just booze we are talking about. There are far more important issues our governments need to be addressing – health care, education, infrastructure, addressing climate change, tackling poverty and income inequality, etc. Yet, the politicians keeps talking about mucking about with liquor retail, and so I keep giving my two bits worth on the subject.