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About Liquor Retailing

Saskatchewan has had a mixed system of public and private liquor retailers since 1935. Today, 75 government retail stores and approximately 640 private businesses including franchises, off-sale outlets and private stores sell alcohol in Saskatchewan.

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1. History of Liquor Retail in Saskatchewan

History of Liquor Retailing in Saskatchewan

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2. Where can I buy liquor in Saskatchewan?

Saskatchewan Liquor Retail Stores

Liquor is sold in Saskatchewan through a mixed system of government and operated outlets and privately and operated outlets (private full-line liquor stores, off-sales and franchises).

Government applies a mark-up to all alcohol products sold in Saskatchewan regardless of how liquor is retailed. The rate at which government chooses to tax alcohol has substantially more impact on government revenue than how alcohol is retailed.

Government Stores

Saskatchewan currently has 75 government stores in 60 communities, employing approximately 750 people, including full-time, part-time and casual workers.

Of the 75 stores SLGA currently operates, 50 of the buildings are owned by SLGA and the remaining 25 stores are leased. Of the 50 stores SLGA owns, 44 are located outside the four largest cities.

SLGA stores currently serve two kinds of customers: retail and commercial. Retail customers buy alcohol from store for personal consumption. SLGA stores and the existing government warehouse also supply products to commercial customers. Commercial customers are businesses that are involved in the resale of alcohol, either through on-table sales in the business (for example, restaurants, bars) or for personal consumption (franchises, off sales).

Government stores sell at consistent prices across the province. The number of products carried in government stores range from approximately 500 SKUs in smaller, rural stores to 2,300 SKUs in larger stores.

Franchises

Franchises are businesses that are licensed by the provincial government to sell alcohol in communities not served by a government store. For the most part, franchises sell a selection of alcohol products sold in government liquor stores at the same retail price as government stores. The franchises receive a portion of the price of each product, known as a commission. This effectively provides the equivalent of a discount, similar to how private stores receive a discount. Franchisees also have the option to special order and sell products not available in government stores. Franchisees can set any price for those products, subject to a minimum price applied to all alcohol sold in Saskatchewan.

The number of SKUs carried by franchises range from 100 in some stores all the way to approximately 2,000 SKUs.

There are about 190 franchises in Saskatchewan.

Off-sales

Permission to operate an off-sale allows an authorized bar or restaurant to sell wine, beer and spirits for personal consumption. Traditionally, off-sales sold cold beer. In 1987, off-sales were allowed to sell wine and coolers, with the addition of spirits in 2002. There are approximately 450 off sales throughout Saskatchewan.

Off-sales receive a volume-based discount on beer purchased in cans and bottles through private beer distributors. There is no discount on any product (beer, wine or spirits) purchased from SLGA.

Off-sales can set their own prices. Some off-sales price their product the same as SLGA during store or franchise hours. Once nearby liquor stores or franchises close for the day, off-sale prices tend to increase. Off-sales that are not close to SLGA stores or franchises can sell at any price, usually higher than SLGA since there is little or no competition.

Private Full-Line Liquor Stores

In late 2012, the provincial government implemented a new policy to have the private sector meet the need for future liquor stores rather than using public funds to build them.

As a result of population growth in Regina and Saskatoon, there was a need for new stores. Proposals were sought from the private sector to build and operate two liquor stores in each of Regina and Saskatoon. The successful private sector bidders were:

  • Sobeys – Regina Rochdale (under development) and Saskatoon Stonebridge (opened September, 2014);
  • Saskatoon Co-op – Saskatoon Blairmore (opened March, 2014); and
  • Willow Park Wines and Spirits – Regina Harbour Landing (open in its current Albert Street location while the Harbour Landing location is developed).

Private stores receive a 16 per cent discount from SLGA prices or the SLGA determined base price of alcohol. They have the ability to set their own retail prices, subject to the provincial minimum price. Private stores can sell all products, including SLGA listings, cold beer and special-order products, but must source all products through SLGA’s warehouse or private beer distributors.

Government’s Additional Roles in the Liquor System

In addition to being a retailer of alcohol, government plays a primary role in warehousing and wholesaling alcohol, regulating private sector retailers and promoting social responsibility and public safety.

  Government Stores Franchises Off-Sales Private Full-Line Stores
Features Government serve retail and commercial customers Private businesses licensed by provincial government to sell alcohol Bars and restaurants authorized to sell alcohol for personal consumption Stand alone, private-sector owned businesses
No. of outlets 75 190 450 3 open and one under development
Product Selection 500-2,300 SKUs 100 – 2,000 SKUs Varies by outlet Approx. 4,000
Pricing Set prices across the province Same retail prices as government stores Special order products subject to a minimum price Receive a commission from SLGA on product sold Can set own prices Receive a volume-based discount on beer purchased in cans and bottles through private beer distributors No discount on any product purchased from SLGA Can set own retail prices, subject to provincial minimum price Receive a 16 per cent discount from SLGA
Hours Hours vary between 9:30 a.m. - 9:00 p.m. Monday to Saturday and noon to five on Sundays.
Can sell liquor between 8 a.m. – 10 p.m. Seven days a week Can sell liquor between 9:30 a.m. to 3 a.m. Must be open at least six hours per day for five days a week. Can be open 8 a.m. – 10 p.m. Seven days a week
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3. Understanding Liquor Pricing in Saskatchewan

Pricing structure of Liquor in Saskatchewan

Government receives revenue from liquor sales primarily through mark-ups, rather than through the way liquor is retailed.

A Liquor Consumption Tax (LCT) of 10 per cent is collected from the end consumer and passed on to the Ministry of Finance. In the 2013-14 Budget, LCT revenue was estimated to be $88.8M.

An ad valorem mark-up on wine and spirits is applied as a levy in proportion to value. The mark-up is a percentage applied to the wholesale price from the supplier (up to a maximum amount): 167 per cent on spirits; and 125 per cent on wine.

A flat rate mark-up on beer is applied at the rate of $1.993 per litre for national/multinational brewers, and at reduced rates for regional and micro-brewers.

Regardless of which retailer (SLGA, private stores, franchises or off-sales) sells the product to the consumer, the government collects the same mark-up.

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4. Government revenues and the cost of liquor retailing in Saskatchewan

The cost to operate government stores averages about 15 per cent as a percentage of sales when direct operating costs, overhead allocation and capital costs are considered. As a point of reference, the government provides a 16 per cent discount to private stores and a blended 13.6 per cent discount to franchises.

The following table illustrates the cost to operate and maintain stores by combining the 2013-14 operational cost of government stores with the average capital investment (less existing store amortization). This provides an estimate of the cash requirement in operating the government’s retail liquor system.

Store Expenses Including Capital Costs (2013-14)
Stores Grouped by Expenses as a Percentage of Sales Sales to the Public
(Millions)
Cost to operate as SLGA Stores:
    Millions %
Top 10 stores $153.6 $17.7 12%
Stores 11-20 $86.6 $11.6 13%
Stores 21-30 $31.1 $4.5 14%
Remaining stores
(31 - 75)
$75.5 $14.2 19%
Non-specific Store Items $0.2 $1.3  
Average Capital Spend   $4.1  
Existing non-cash amortization included in store expenses   $-1.6  
Total $347.0 $51.8 15%
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5. Liquor Retailing in other Provinces

British Columbia – mixed public/private system

BC Province Icon

Retailing options:

  • Government stores;
  • Agency stores providing service to communities that are not large enough for a full store;
  • Private retail stores operated by private businesses.

Private stores receive a 16 per cent discount from government store prices and can:

  • Set their own prices subject to the provincial minimums;
  • Only sell to the general public;
  • Must be free standing businesses;
  • Sell all product categories;
  • Sell non-alcohol related products, such as lottery products, cigarettes, packaged snacks and alcohol related items such as glasses and corkscrews, but cannot resemble a convenience store.

In March 2014, B.C. announced that it would allow alcohol to be sold in grocery stores. No grocery stores have alcohol for sale as yet. The B.C. Government has stated that it will continue to control the number of alcohol outlets in the province.

Related resources:


Alberta – all private system

Alberta Province Icon

Retailing options:

  • Privatized retail store system

The provincial government continues to own (but not operate) the warehouse, be the importer of record, apply provincial mark-up and set provincial policy respecting alcohol.

Most businesses that sell alcohol (stores or restaurants) buy from the provincial warehouse where a flat rate mark-up is applied to all alcohol.

Alberta Gaming and Liquor Commission (AGLC) has almost 20,000 products in the warehouse.

In Alberta:

  • Government does not control the number of stores or their proximity to one another. However, stores are subject to municipal zoning regulations;
  • Liquor stores are stand-alone structures and cannot be part of another business;
  • Suppliers can have any product listed in the Alberta warehouse as long as the supplier is willing to pay a warehousing fee. All private stores and licensees (bars and restaurants) can purchase liquor directly from the warehouse at wholesale prices although there are minimum order requirements to order from the warehouse. Businesses that cannot meet minimum order requirements may purchase liquor from another private store at prices negotiated between the parties.

There is no minimum or maximum pricing, meaning that prices vary throughout the province.

Related resources:


Manitoba – mixed public/private system

Manitoba Province Icon

Retailing options:

  • Provincial government operates 57 liquor stores called Liquor Marts which offer a full line of products (beer, wine and spirits);
  • 178 agency stores also offer a full line of products;
  • Hotel taverns can open an off-sale, but are limited to beer only;
  • There are several privately operated specialty wine stores, limited to wine only.

In 2012, Manitoba began to introduce smaller Liquor Mart Express stores that offer popular wine, spirits and beers, some of which are located within a grocery store. Liquor Mart Express stores are government-owned stores with government employees working in them.

The first Liquor Mart Express store within a grocery store opened in a Winnipeg Safeway in December 2012. Manitoba plans to open up to ten Liquor Mart Express stores, with five located within grocery stores.

Related resources:


Ontario – mixed public/private system

Ontario Province Icon

Retailing options:

  • The Liquor Control Board of Ontario (LCBO) operates 645 government liquor stores;
  • The Beer Store, which is owned by beer producers to sell beer;
  • 217 agency stores in smaller towns;
  • Ontario does not have off-sales.

Ontario wineries can have retail stores located away from the winery.

In 2012, Ontario announced that it would be putting LCBO Express stores in grocery stores. Similar to the Manitoba approach, the Express stores would be owned and operated by the LCBO as government stores and would be staffed by government employees. To date, none of these stores have opened.

Related resources:

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