Convenience Store Alcohol Would Drive Prices Up, Government Revenue Down

Beer Store white paper dispels myths about the deregulation of alcohol sales 

TORONTO, Feb. 10, 2014 /CNW/ - The Beer Store on Monday released a report outlining how deregulated alcohol sales in Ontario would drive up prices, harm communities and lead to hundreds of millions of dollars in lost tax revenue.

Beer Store President Ted Moroz said allowing convenience stores and gas stations to stock beer, wine and liquor would increase the risk of sale to minors, shrink selection and mean the end of the successful Beer Store bottle-return program.

"Prices will go up. Make no mistake. Beer, wine and liquor will be more expensive in Ontario," Moroz said. "Our study shows that's what happened in Alberta and British Columbia, while also showing that Ontario currently has among the lowest beer prices in Canada and a better beer selection than other provinces with deregulated systems."

"The convenience store lobby is blatantly ignoring the facts when they tell Ontarians otherwise."

The report used Statistics Canada data, liquor board reports and numerous previous studies to examine deregulation experiences in Alberta and British Columbia and found that prices paid by consumers rose sharply. Meanwhile, the report found that private retail systems in deregulated Canadian provinces and several U.S. states make it much easier for underage consumers to buy alcohol.

Greg Flanagan, an economist who studied the Alberta deregulation of retail alcohol sales, conducted an independent review of The Beer Store's findings. He said the current system delivers the advantages of competition that benefit consumers, government and alcohol producers without any of the harms associated with a deregulated system.

"Retail deregulation does not deliver lower consumer prices, nor does it lead to higher government tax revenues," said Flanagan. "I am confident that prices will rise or government revenue will fall, or a likely combination of the two will occur if thousands of corner stores and gas stations across Ontario are allowed to put alcoholic beverages on the shelves."

Consumers' Association of Canada President Bruce Cran said Ontario's Beer Store model is a win for consumers. "This exhaustive research paper shows that consumers will lose should corner stores and gas stations sell beer," said Cran. "I've seen firsthand how the promised benefits of competition failed to materialize in B.C. The profit margins required by convenience stores will mean consumers will pay more."

Key survey findings include:

• Ontario has some of the lowest pre-tax beer prices in Canada, better selection and delivers more provincial tax revenue than a deregulated system would. These price and government revenue advantages will be lost if Ontario's system is deregulated.
• Corner stores and gas stations in Ontario are more than ten times more likely to sell cigarettes to minors than the Beer Store is to sell beer to minors. In a survey conducted by the Centre for Addiction and Mental Health, 1.2% of underage Ontario students surveyed said they were able to purchase beer, while 15.6% indicated they were able to purchase cigarettes at corner stores or gas stations.
• There would be no benefit to offset the risks of deregulation. Not on price, or selection. Ontario's Beer Stores stock up to 330 brands; in Alberta, where sale of beer was deregulated, the selection is less than half that number.
• Deregulated beer sales would mean the end of the Beer Store's award winning recycling program. This program diverts approximately 450,000 tonnes of recyclable materials - half the annual volume of the Blue Box program - and saves taxpayers $40 million in recycling costs annually.

To get the facts about beer sales in Ontario, please visit www.ontariobeerfacts.ca.

SOURCE: The Beer Store

To arrange interviews with Mr. Moroz, Mr. Flanagan or Mr. Cran, or to obtain further information and receive a copy of the report, please contact:

Jay Armitage
FleishmanHillard
[email protected]
416-278-6698 (cell)

Bruce Cran, President
Consumers' Association of Canada
[email protected]
604-418-8359