Murray Mandryk: Jury's still out on liquor store privatization success

While last fall’s union rallies against private liquor store ownership failed to convince many people, we still don’t know who will wind up owning these liquor stores.

It’s been difficult for opponents of the Saskatchewan Party government’s sell-off of the remaining publicly owned liquor stores to make the case that this has been the disastrous deal they predicted it would be.

That said, the jury is still out as to whether the abandonment of Saskatchewan’s half-private, half-public hybrid model of liquor store ownership will be a good long-term deal for taxpayers or a good thing for the province as a whole.

In fact, given a few recent developments, we deserve some answers as to who is going to wind up owning these private liquor stores, because things aren’t exactly playing out as the government predicted.

The good news is that money is still pouring in from actual property and private liquor licence sales.

The 10 physical Saskatchewan Liquor and Gaming Authority liquor store buildings sold by the government have raked in $3,255,000, including: Esterhazy, $410,000; La Ronge, $310,000; Buffalo Narrows, $100,000; Creighton, $200,000; Carlyle, $330,000; Humboldt,$385,000; Moosomin; $350,000; Watrous, $450,000; Biggar, $350,000; and Fort Qu’Appelle, $370,000.

However, the big cash is coming in from the auctioning off of liquor store permits — $45,077,800 from those auctions … or so the SLGA told us last February.

Ranging from $450,000 in Carlyle to $3.3 million in La Ronge, with bids in Regina and Saskatoon around the $1.5-million mark, it’s hard to argue the 5,641 bids weren’t a competitive and profitable exercise.

The money raised has surpassed what SLGA Minister Lori Carr estimated would be a $15-million winding-down cost that includes severance for the estimated 350 part- and full-time Saskatchewan Government and General Employees Union (SGEU) members and out-of-scope SLGA employees put out of work.

Certainly, it’s far exceeded political critics who predicted friends of the Sask. Party would get liquor stores for a song, not much more than the $5,000 required price for a bid.

Given that the provincial government still controls wholesale distribution of liquor in this province — not to mention the taxes we pay on our booze — it remains unlikely Saskatchewan will lose much money on this deal.

However, all this begs the question of how getting out of the retail business and handing it over to the private sector adds to government coffers in future years after the initial sale. (Carr and her government claim the SLGA retail outlets would have only made $395,000 in 2022-23 and were on a path to losing money … although it’s hard to imagine how even a government could lose money selling booze.)

To be clear, this has been a politically driven policy decision …  although it remains legitimate to ask why the government should be in any retail business. After all, the government isn’t in the retail business elsewhere.

No government saw fit to get into the retail cannabis business. The fact that neither private booze nor weed sellers are losing their licences because they’re selling to minors might finally put to rest the notion that we need public ownership to regulate sales.

That said, what the private liquor business will look like in Saskatchewan remains unclear.

As first reported by CTV, 10 of the 35 initial bidders are not going forward with their bids, with no explanation from the government as to why.

This could just be a relatively minor setback, but it does raise questions about whether large companies might yet wind up owning a disproportionate or concentrated share of these private stores.

The NDP’s anti-privatization criticism has mostly focused on loss of revenue and what SLGA critic Nathaniel Teed called in an interview “power-paying, mortgage-paying” SGEU jobs moved to the private sector. Neither is an especially compelling argument for why the government should be in this specific retail business.

But Teed’s stronger concerns are that private stores could wind up in the hands of one or two large, out-of-province private companies paying low wages and maximizing profits with higher prices.

This would be in marked contrast to the cannabis business, now largely made up of small, entrepreneurial retailers. Admittedly, there is no proof of this yet, but by now we should know who is buying these privatized liquor stores.

Will we see competition, or price increases because of virtual monopolies?

Murray Mandryk is the political columnist for the Regina Leader-Post and the Saskatoon StarPhoenix.

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