B.C. to privatize liquor distribution operations

British Columbia has announced plans to shift its liquor warehousing and distribution business to the private sector by 2015.

The provincial government said Tuesday it will run a request for proposals (RFP) for a private owner and operator for its Crown-owned and -operated liquor distribution branch warehouses at Vancouver and Kamloops.

"By privatizing the warehouses, the province will realize a long-term capital gain, and create an opportunity for the private sector to find more efficient ways to distribute liquor in B.C.," the province said in a release.

About 55 per cent of the liquor sold in the province moves through the two Crown-owned warehouses, which employ a total of 400 unionized staff. The other 45 per cent is already handled through private distributors, the province said.

The province said its RFP will not affect the liquor distribution branch’s retail operations, which include 176 provincially-owned outlets under the BC Liquor Stores banner, and 21 BC Liquor Stores Signature shops. The latter carry a larger selection and are staffed with product consultants to help customers.

The branch also distributes to over 220 privately-owned "rural agency" stores in smaller communities — typically general merchandise stores that are authorized to carry and sell a limited selection of liquor.

The Canadian Restaurant and Foodservices Association on Tuesday hailed the province’s move, saying the current liquor distribution system "is inefficient and does not serve stakeholders, including government, particularly well."

"We’re very pleased that the B.C. government intends to privatize liquor distribution and warehousing, as the Alberta government successfully did a couple of decades ago," Mark von Schellwitz, CRFA’s vice-president for Western Canada, said in a separate release.

"Privatizing the (branch) will protect government liquor revenues and will lead to increased efficiencies, better product selection, and lower prices for both licensees and consumers."

The CRFA, in its release, cited "numerous economic studies" that "strongly recommend that provincial governments should get out of the distribution and retail of beverage alcohol business."

The association also hailed plans in Tuesday’s provincial budget for a reduction in liquor mark-ups, meant to compensate for a three per cent increase in liquor tax once the 10 per cent provincial sales tax (PST) is re-introduced on liquor sales.

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