Privatization of liquor leads to higher prices in Washington state
Today, the B.C. government is expected to announce a short list of bidders for the Liquor Distribution Branch warehouse and distribution system.
Meanwhile, there's evidence south of the border in Washington that the privatization of state liquor sales quickly led to higher prices.
The move to increase the private sector's role came after an initiative passed in the November election. But now, the rising prices appear to be forcing people to leave the state to buy booze.
According to the Pacific Northwest Inlander and Associated Press, there was a 35 percent increase in liquor sales in Oregon along the Washington state border during the month of June.
Washington prices have reportedly gone up by 12 percent, according to AP.
The B.C. Government and Service Employees' Union president Darryl Walker has called for a moratorium on the privatization plan in this province. So far, the B.C. Liberals show no sign of backing down.
Follow Charlie Smith on Twitter at twitter.com/csmithstraight.
Comments
13 Comments
jonny .
Jul 20, 2012 at 12:59pm
when profit is a motive, prices will always be as high as possible. always.
ds
Jul 20, 2012 at 1:59pm
Sounds like the greased palms are being held out for their kick back. Another B.C. rail sisuation. Of coarse this is only my veiw but I hope there will be a public inquiry held if this sale goes ahead.
Sheeple
Jul 20, 2012 at 2:02pm
Why not BC Ferries instead of Liquor which provides on-going inflation and recession proof revenues?
Oh yeah it's taking care of their Corporate friends before they get kicked out of office...
Freight Train, Freight Train, going so fast...
Jul 20, 2012 at 2:07pm
Seattle Times.
quote: "One explanation for why liquor prices may be higher under I-1183 (the law approved by voters to privatize) is that the law imposes a 17 percent fee on retailers and a 10 percent fee on distributors. (The distributor fee will drop to 5 percent after two years, but the retailer fee will stay as is.)
The law also requires distributors to make up the difference if their fees do not total $150 million by early 2013. ...
"In real terms, most retailers are charging more for the same items, and Costco is not," said Joel Benoliel, Costco senior vice president and chief legal counsel.
"We're being very careful to charge less, including taxes, than what people were paying in liquor stores. But we're sacrificing margin to do that. ..."
astro
Jul 20, 2012 at 2:13pm
Privatization of liquor distribution will cause higher prices because the private companies will have to make a profit over and above what the government already makes. The same happens in all gov't sectors such as health care. And it is us who pay this extra cost so that the friends of the gov't make more money.
James73
Jul 20, 2012 at 2:21pm
Jesus! This isn't the fire department.
Whether prices go up or stay down means nothing to me (oh, and I drink).
What business does our government have selling booze?
Why should we allow our government to compete with private enterprise on any level?
If I had a good job with the LDB, I would probably fight for it too but this system is a relic from our past that has nothing to do with the role of governing.
Arthur Vandelay
Jul 20, 2012 at 3:21pm
Perhaps the government assume the function of retail distribution for all goods and services then if they can provide it cheaper (i.e. more efficiently) than the private sector.
nepacific
Jul 20, 2012 at 7:09pm
I like the government liquor stores. Seems to me to at least keep a bit of a lid on things. And if the prices are no better (I'm not necessarily claiming worse) in private stores, what's the point? Except maybe to reward one's friends and insiders.
The reason government stores can work in this case is the same reason single-payer government health insurance works: economies of scale. Private stores might do a better job of being creative and pushing the product, but that's not what I want here.
C. Cullum
Jul 20, 2012 at 9:03pm
They are not selling the stores. They are selling asking private companies to bid on the shipping/receiving which is actually a cost to government. If private can do it cheaper and better government (most likely, through efficiencies and technology) then there will be a savings. Government still keeps tax revenue and government liquor stores remain. I find it ironic that people here are now lamenting all the government tax on booze and government control of liquor.
David Thomson
Jul 20, 2012 at 11:01pm
Lived through privatization in Alberta. Best thing that could have happened. Better selection, better availability, and government made more money by not having to maintain bricks & mortar shops. Public better served and many small businesses benefited. Prices did not go up and the prices are still often much lower for some non-domestic products in Alberta than they are here in BC.