Tuesday, July 31, 2012

The Price of Private Beer in BC

I never have to look very hard to find someone singing the praises of privatization. Taking something that's run by the government and turning it over to a private, for-profit business will, they say, result in more variety, lower prices, and an overall better experience for the customer, because when you're in it to make money you can't cut corners and have the government always propping you up. It'll be expressed differently from person to person, but generally, that's what the most common arguments of its proponents tend to boil down to--that it's usually in everyone's advantage for something to be privatized.

I've never put much faith in arguments like that, because they never quite seem to accord with reality. In my experience, privatization instead tends to see prices go up and service quality decline, especially when you're dealing with an effectively captive market like healthcare and electricity supply, because "inexpensive products" and "high-quality service" are often treated as barriers to the true goal of every for-profit company, namely "make as much money as possible." Look at the ongoing healthcare crisis in the United States, for example, to see what happens when the profit motive takes over a social necessity, and you run into issues like $10,000 yearly deductibles--making it easy to pay an private insurance company $750 a year in premiums, and still have to pay all your own medical expenses out-of-pocket--and people with certain conditions being unable to get their own coverage because they would cost the company too much, even if they're willing and able to pay.

Today, though, I'm not interested in health insurance; rather, something that requires plenty of people to have health insurance if they use it enough--beer. Beer and liquor are hard to define, in some respects; nowadays, while a lot of people might call them luxuries, when it comes to society as a whole they're effectively necessities. Civilizations have been lubricated by alcohol for thousands of years, way back to the days when beer was the only reliable way to get water that wouldn't sicken or kill you. North America's historical love-hate relationship with alcohol has left a patchwork of differing supply mechanisms from coast to coast. Some are public, some are private, and together they provide the possibility for interesting data points on whether privatization is good.

In British Columbia this is a major issue, though it seems to have been slipping beneath notice as of late--the besieged Liberal government has been taking fire for its recent moves to sell its liquor distribution system to the privately-owned company Exel Logistics, ostensibly out of a desire to balance the budget--because after all, why have a consistent inflow of cash when you could have one quick payday that won't come again and will leave future paydays even poorer? There's a lot of sketchy business in the background of this deal, and I for one have no doubt that the BC Liberals are getting ready to burn down the house before they're annihilated in next year's elections.

But I was curious--particularly in regard to claims I've heard from the government as well as privatization proponents that it would mean cheaper prices for British Columbians. Does that really stand up? I decided to go find out.

It's always good to be able to illustrate an abstract concept.

One thing I had to get used to upon moving here was that beer and liquor sales are not a government monopoly, as they are in Ontario through the LCBO. While we do have the BCL, the LCBO's government-run counterpart, there are also a wide variety of private liquor stores, many of them attached to bars. In downtown New Westminster, while there's only one BCL outlet--and it's practically as far west as you can go while still being in downtown New West--there are three private sellers on Columbia Street and another one in River Market, and those are only the ones I know about. This variety gave me the chance to do some direct price comparison: both within BC and without, because ever since I arrived it's seemed like beer is rather more expensive out here than it is in Ontario.

Recently I stopped in at one of my local private sellers and noted down the prices of some of their wares, craft brews and national brands. I then ran them against the BCL and LCBO websites. Here's what I found.

ProductBC Private Store PriceBCL PriceLCBO Price
Hopworks IPA$8.00Not availableNot available
Innis & Gunn Canadian Cask$6.35$4.99*$4.95*
Driftwood Ale$7.30$5.00Not available
Twilight Summer Ale (6-pack)$19.95$15.99Not available
La Fin du Monde$8.30$6.50$4.95
Sleeman Cream Ale (6-pack)$15.15$11.99$10.95
Big Surf Laid Back Lager (6-pack)$10.35$7.79Not available
Cariboo Honey Lager (6-pack)$9.95$7.99Not available
Molson Canadian (6-pack)$14.95$11.69$11.50
Chimay Blue Cap$5.05$3.99$2.80**
Hobgoblin Ale$4.45$3.50$3.45
*prices are based on listing for Innis & Gun Canada Day 2012 on BCL and LCBO websites
**price is based on Chimay White Cap, the only variety sold by the LCBO
All prices listed are before tax.

Admittedly, it's only one data point--but it's a data point that matches up with the general sense I've gathered over two years of buying beer in this province. I'm sure there are others. Although LCBO prices trend slightly lower than the BCL's, that may be chalked up to vagaries like differing tax rates. When it comes to the private store, though, everything is more expensive than it is at the BCL--maybe only a dollar or two more, but that sort of thing adds up over time.

Sure, there's the convenience factor as well--but it's convenient the way a convenience store is more convenient than a supermarket. It may be right there, but it doesn't necessarily have everything you need. While there are private stores in Metro Vancouver with a widely varied selection, carrying beers I can't find anywhere else--Firefly near Broadway and Cambie in Vancouver, and the Central City Liquor Store on the other side of the SkyBridge, are the two big ones I know of--most private sellers I've visited are small and with very limited selections, particularly when it comes to single bottles or cans.

Privatization of the existing liquor distribution system wouldn't only mean that that state of affairs would become the norm--prices would go up even further from what the private stores charge now, because Exel Logistics wants to extract as much money as possible from the drinkers of British Columbia.

Don't believe the story that the folks in Victoria are trying to sell you--it's all foam, no substance. Take a closer look for yourself, and ask yourself who really benefits when the profit motive is brought in.

No comments:

Post a Comment