If the SaskParty is re-elected in April 2016, Saskatchewan will be seeing a lot more private liquor stores.
On Wednesday morning, Saskatchewan Liquor and Gaming Minister Don McMorris announced a plan that would see 40 liquor stores currently owned by the government sold to be converted into private stores. The plan would also include establishing 12 new private liquor stores in the province.
“Saskatchewan consumers will enjoy more choice, more convenience and more competitive pricing,” McMorris said in a statement.
Not only will the new system allow liquor stores to be open 8 a.m. to 3 a.m. seven days a week, it will see all liquor stores, off sales, rural franchises and private stores operate under the same permit. The province boasts that this will create “a level playing field” in which all liquor retailers are able to purchase their product at the same wholesale price.
Currently, private stores, franchises and off sales all buy their supply differently.
- Private stores receive a 16 per cent discount on all product.
- Off sales receive a volume-based discount on beer purchased through private distributors. There is no discount on any product purchased through SLGA.
- Franchises receive a 15.3 per cent discount on products purchased from the SLGA, and a 8.2 per cent discount on privately-distributed beer.
Changing to a wholesale system has the potential of seeing reduced prices for customers at some off sale and retailer locations.
McMorris stated, however, that 99 per cent of the volume sold by the government is expected to remain at the current prices, with another one per cent expected to increase.
“The new direction allows government to collect the same amount of revenue through a wholesale markup while also correcting many inequities that have existing among the province’s various liquor retailers.”
McMorris says the new direction is also designed to collect the same amount of revenue that the government is currently receiving. With 40 public stores being sold, government revenues will be maintained if the new private stores sales are consistent to what they are now.
Converting 40 of the province’s 75 government-run liquor stores will have an impact on the employees who work there. Currently, there are 196 people working at the 40 stores slated to be sold – 102 of those workers being full time.
Whether or not the changes bring more selection to Saskatchewan will largely remain up to the retailer themselves. However, McMorris pointed to the private liquor stores currently open in the province, saying they already demonstrate that private retailers can bring in a greater variety of product.
The plan was developed after the province conducted a consultation which heard from more than 6,600 people. The government says 61.7 per cent of respondents supported a great role for private liquor retail stores. More than half of people said the government should focus on investing on other public priorities instead of liquor stores, while also ensuring it maintains its current level of revenue from liquor.
Even though the province will be selling its 40 stores, it doesn’t mean the private stores have to be established in the existing building. McMorris says the new retail rules would allow liquor stores to be integrated into an existing business – such as a grocery store – as long as there is a separate entrance from the outside.
McMorris also assured that any location being converted from public to private won’t be left without a liquor store; the public store will only close when the private store is up and running.
A Request for Proposal process will be used to select who operates the 52 new private stores. However, no changes will be made until after the provincial election in April 2016.
McMorris said current employees of government stores will be given preferential treatment in the RFP process.
Restaurants and lounges are not included in the new level playing field. However, they will now be able to purchase their supply from any retailer if they so choose.
The government also won’t change the number of permits in the province.