A new report is sounding alarm bells over the possible privatization of the Creighton Liquor Store and the rest of Saskatchewan’s alcohol retail network.
A study by two left-leaning think tanks, the Parkland Institute and the Canadian Centre for Policy Alternatives, suggests the provincial government would lose millions of dollars in potential revenue under a private system.
“…a thorough analysis of the available data reveals no financial reason why Saskatchewan should sell its liquor retail assets,” reads the study, titled A Profitable Brew: A Financial Analysis of the SLGA and its Potential Privatization.
The 32-page study suggests the Saskatchewan Liquor and Gaming Authority (SLGA), a Crown corporation, generates exceptionally high returns for the government while addressing social concerns of alcohol use and avoiding spikes in retail liquor prices.
SLGA has produced superior financial results compared to the private systems in Alberta and BC, and would likely earn even higher profits by owning and operating new liquor stores in urban settings, says the study.
If, over the last five years, SLGA had earned the same return on investment that Alberta’s private liquor system yields that province, Saskatchewan would have forgone more than $250 million in government revenue, according to the study.
Since most high-value urban SLGA stores are leased, not owned, potential proceeds from any asset sale would be negligible, adds the study, authored by David Campanella.
The study concludes with three recommendations for the province:
• Maintain public ownership of an integrated wholesale and retail liquor distribution system.
• Do not license any more private retail stores, and task the SLGA with studying the financial implications of purchasing the four private retail stores already operating in the province.
• Allow SLGA to expand its network of retail stores in a way that balances its objectives of fiscal stewardship, customer service and social responsibility.
The Saskatchewan government is considering five options for the province’s liquor retail system, ranging from the status quo to a fully private structure.
