Under this option, government would sell existing government liquor stores and/or the exclusive right to retail alcohol in a specific geographic radius to private retailers. This could be accomplished through an open tender/Request for Proposal (RFP) process to potential private sector retailers.
There are a number of ways an RFP process could be undertaken:
- Individual stores could be sold through tender to individual private vendors
- City or region specific bundling of stores could be sold through tender to a single private vendor, or
- All government stores in the province could be sold through tender to a single private vendor.
This option would result in the sale of government stores to the private sector and consequently the private sector being responsible for all liquor retailing in the province. A key characteristic of this option is that an overall restriction would be applied on the number of full-line liquor stores operating in the province. Government could choose to limit the number of stores in operation to 75 (same as current government stores) or expand the number of private stores in operation up to a maximum number.
The purpose of adopting this model would be to:
- Allow a managed transition to a fully private liquor retailing system with consumers benefiting from increased product selection and variable pricing;
- Shift responsibility for alcohol retailing to the private sector, thereby eliminating any future operating or capital costs to government associated with being a retailer of alcohol;
- Provide government with up-front revenue received from the private sector for the sale of assets and the right to retail liquor within a specified area of the province; and
- Limit the total number of private liquor stores that could operate in any community, region or across the province as a whole.
What does it mean?
- Consumers would see approximately an equal number of full-line retail outlets to purchase alcohol, with private stores replacing government stores. Consumers would have additional choices if government chose to expand the overall number of stores allowed to operate in the province.
- Consumers would experience increased product selection through the private sector in response to consumer demand, although likely less than in an open and fully competitive marketplace.
- Consumers would experience variability in alcohol prices depending on the level of competition in the marketplace. The price variability would be less than what consumers would experience under a fully open and competitive system depending on how stores were sold.
- Consumers would not experience consistent product pricing across government stores and franchises.
- Consumers in rural communities not served by a government store would see minimal benefits from increased private sector retailing in the province.
- Government would see a one-time revenue gain from the sale of government stores and /or the exclusive right to retail in prescribed areas. However, this would be dependent on private sector interest in liquor retailing and the value of related assets, attractiveness of the associated competition zone and related conditions established under the RFP process and the size of the retailer discount.
- Government would save operating and capital costs associated with running government stores.
- Government would benefit from an on-going source of new tax revenue resulting from increased private sector participation in liquor retailing.
|Other economic and employment impact
- Limited new economic impact or job creation if the private sector is limited to the operation of existing government stores.
- Government store employees would have the opportunity to acquire an ownership interest in an existing or new liquor store.