Last Call Laura Wright
Levelling the field Alberta continues to make headlines 15 years after the move to a privatized liquor market. Liquor Canada caught up with Alberta Liquor Store Association (ALSA) executive director Laura Wright for an insight into how the market is performing Since privatization, the number of liquor stores has quadrupled from 300 to 1,200. How has this competitive environment affected liquor store owners? Our retailers have learned to compete – if not with location – then with providing informed and exemplary service. Ordering product that a customer is interested in, but that they might not normally carry is often done because our system allows it. Retailers have had to work harder to maintain their share of the pie through this evolution of privatization. Some have sold their stores when opportunity knocked. But there are still 800 (single store retailers, as opposed to chains) out there doing what they can to earn a decent living. Has the price of alcohol gone down as a result of a saturated marketplace? No, I believe the price of alcohol has essentially remained consistent with inflation and not reacted to a “saturated marketplace.” The population in Alberta has been growing at the same time, which also allows prices to be resilient. The privatization model has come under fire recently as a pseudoprivatization model because there is still a distribution monopoly. With respect to this monopoly, does the Alberta privatization model ‘work?’ The Alberta Gaming and Liquor Commission (AGLC) initiated a review of the distribution system in Alberta in 2007, including 64
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broad stakeholder consultation with groups like ourselves, the Alberta Hotel & Lodging Association, Brewers, Spirit Canada, etc. ALSA’s position remains consistent in supporting a single warehouse operator for the province. The principles of our privatized model are based on a level playing field and include but are not limited to ‘postage stamp delivery’ i.e. everyone pays the same freight rate, no volume discounting, and volume purchase benefits from a supplier to a retailer must go to the customer. A single warehouse operator is consistent with the ‘level playing field’ intention of privatization. It’s no secret Canada’s three major breweries are suing the distributor (CLS) and AGLC for not keeping up with demand. What are the biggest issues facing Alberta private liquor store owners in respect to warehousing and distribution? Generally speaking, our members when polled have been satisfied with the warehousing and distribution of CLS with the exception of the difficulties of the latter part of 2006, which have been addressed by the AGLC, i.e. through the PricewaterhouseCoopers warehousing review. The 2007 PricewaterhouseCoopers review you mention reported that some suppliers, agents and retailers have lost confidence in the current model because no one is “managing” the flow of goods in the supply chain.
Laura Wright
Is this a sentiment expressed by ALSA? This is definitely not a sentiment of ALSA. The system has worked and continues to work in this model (exception late 2006). The government (AGLC) set Key Performance Indicators in place in 2007, which have either been met or exceeded by CLS. The loss of confidence in the current model by some is perhaps a loss of understanding of the principles of this model. What can other provinces learn from the Alberta model? Governments of other provinces could – without being in the business – still maintain tax revenues from the sale of adult beverages and let the free enterprise system do the rest!