Sask. government refutes liquor privatization claims in think tank's report

A new report from a left-leaning think tank takes issue with the Saskatchewan government's proposal to privatize some of its public liquor retail stores.

The report, released by the Canadian Centre for Policy Alternatives on Thursday and commissioned by the Saskatchewan Government and General Employees' Union, said that the privatization plan will cost the province $115 million over the next five years, if it's implemented.

The report titled Down the Drain: The Saskatchewan Government's Costly Proposal for Liquor Retailing was authored by public policy researcher David Campanella,

The report said part of the government's privatization proposal is to "slash the province's liquor mark-up by 25 per cent." 

Campanella argues that the proposal "does not make this reduction explicit. Instead, the unprecedented cut is framed as an innocuous means to 'level the playing field,' that the government itself made uneven when it introduced private retailers."

"The reduction is critically important. The size of the liquor mark-up is critical in determining the revenues returned to the government from liquor sales," Campanella said in the report.

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Sask. government disagrees with report's findings 

Minister responsible for the Saskatchewan Liquor and Gaming Authority Don McMorris said one of the government`s major considerations was to make any changes as revenue-neutral as possible.

"The new liquor retail system includes a new wholesale markup for retailers that will replace any of the discount structures that currently exist for private retailers," McMorris said in a media release.

"The new markup rate will be approximately 25 per cent less than the overall mark-up."

McMorris added, "It essentially equals the cost government bears to operate the 40 stores being converted and related head office costs and current discounts being paid which is why it is revenue neutral."

There are currently 75 SLGA stores across the province.

In a scrum with reporters Thursday afternoon, McMorris said the current wholesale situation is a "mixed bag," where the "SLGA marks the price right up to the retail price and then we discount it for vendors or private stores and those vary"

He also explained how off-sale retailers don't get any discounts. He said the government's proposal levels the playing field. 

McMorris said that's "what consumers want."