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You are here: Home Pacific  BC Liberals plan to privatize liquor distribution

BC Liberals plan to privatize liquor distribution

VICTORIA, BC—British Columbia’s Liberal government plans to take the province out of the liquor warehousing and distribution business as part of a sell-off of government properties that Finance Minister Kevin Falcon figures will raise at least $706 million.

The BC government also said in its budget announcement last week that it will lower the provincial liquor mark-ups to make up for three per cent tax increase that will come in once the provincial sales tax on alcohol  is re-introduced .

The Liberals announced that they have called for bids on the provincially-run Liquor Distribution Branch’s two warehouses  in Vancouver and Kamloops, as well  as associated distribution services, which supply wine and liquor to 1,400 government and privately-owned retail stores across B.C. as well as to 8,000 bars and restaurants

However, the government is not currently planning to completely privatize the the business of selling alcohol in the province. At the moment there is no plan to sell off the Liquor Distribution Branch ‘s 197 stores which account for 41 per cent  of retail liquor sales in British Columbia.

The Liquor Distribution Branch (LDB) said in a report outlining its three-year fiscal outlet that a customer survey indicated 98 per cent  of customer s are satisfied with  LDB retail stores but only 80 per cent of warehouse customers are happy with the service they receive.

The Canadian Restaurant and Foodservices Association issued a release praising the government’s move. “We're very pleased that the BC government intends to privatize liquor distribution and warehousing, as the Alberta government successfully did a couple of decades ago, “ said the CRFA’s vice-president for Western Canada, Mark Schellwitz. “Privatizing the LDB will protect government liquor revenues and will lead to increased efficiencies, better product selection, and lower prices for both licensees and consumers,"

Actually, the privatized distribution of alcohol in Alberta  did not roll out smoothly. The government received numerous complaints from retailers and licensees about late and short deliveries from Connect Logistic Services (CLS), the company contracted by the government to warehouse and distribut e spirits, wine, coolers and imported beer in the province.

The Alberta government hired consulting firm PricewaterhouseCoopers  to study the alcohol distribution system  in Alberta and come back with recommendations for improving it. One of the recommendations in PwC’s report, issued in March 2007, was that the Alberta Gaming and Liquor Commission (AGLC) should take a more active role in overseeing the supply chain. It also called for the government to put performance benchmarks  for CLS in a formal contract , and for customers of CLS to provide volume and timing forecasts to allow the warehouse operator to improve planning.

PwC also recommended that the contract  to operate liquor warehouses  should be put out to tender every five years.

The government said it would implement PwC’s recommendations.

CLS’s current contract with the AGLC runs until this year.

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