Should the BC Government be in the retail alcohol business at all?

A recent Globe and Mail business editorial asks this question with the author suggesting several business-related reasons why alcohol sales should be completely privatized in BC. But the terms of reference for the current policy review clearly recognizes that alcohol needs to be handled differently than other products in the marketplace. Government liquor boards in Canada were created for two main purposes: (1) to maximize public revenue from the sale of alcohol and (2) to ensure that alcohol retailing is conducted in a way that minimizes alcohol-related harm and costs.

On the issue of maximizing public revenue, the experience of our neighboring province, Alberta, is telling. Alberta ended all government sales of alcohol in 1993 and almost immediately, the prices charged by private retailers started to rise. Because of the upward pressure on prices, the government had to reduce taxes on alcohol in an effort to fulfill its promise that retail prices would not go up under privatization. Ten years later, economists estimated that this process ended up costing the government of Alberta a whopping $500 million dollars in lost revenue over the preceding decade. Less revenue from alcohol means fewer resources to fund education, health care and other essential public services.

In regards to minimizing harm and costs, the case is equally clear. One of the most consistent effects of privatization is a large increase in retail outlets and hours of operation. While this is definitely more convenient for consumers, the story is not all good news. In Alberta, for example, the number of liquor outlets has quadrupled under privatization and now Alberta has one of the highest per capita drinking rates in Canada. In BC, partial privatization in 2002 doubled the number of outlets. Per capita consumption rose sharply following the change and then fell during the economic recession, and the rate of alcohol-related hospitalizations is up by 16%. The bottom line: increased availability leads to higher drinking rates  which lead to more harm and more alcohol-related costs for government creating a lose-lose arrangement when coupled with the effect of less revenue.

Secondly, pretty much everyone agrees that alcohol should not be sold to minors or to patrons who are already visibly intoxicated, and all jurisdictions in Canada have laws prohibiting such sales. Research consistently shows that private retailers do worse than government liquor stores when it comes to carding underage buyers and refusing sales to intoxicated patrons. For example, a recent “sting” operation conducted by the Liquor Licensing and Control Branch found that employees of private liquor stores in BC were four times more likely to sell alcohol to minors than employees of government liquor stores. Given these data, the Provincial Health Officer of BC went so far as to conclude that youth access to alcohol has increased with the expansion of private liquor stores in BC. In 2011, CARBC field researchers noted examples in private stores across BC of underage youth and highly intoxicated patrons purchasing alcohol. In one case, we observed an intoxicated driver stumble into a private store and successfully purchase liquor.

Finally, research consistently shows that risky and heavy drinkers tend to purchase cheaper alcohol. In an effort to keep alcohol from becoming too inexpensive, BC and most other provinces in Canada implement minimum social reference prices to help reduce risky consumption. Effective policies like minimum prices are relatively easy to implement in government stores because price is set on a uniform basis across the province and changes only infrequently. Pricing in non-government stores is much more variable with some private retailers actually pricing below government established minimum prices to compete in the marketplace. Cheap alcohol means more risky consumption, more harm and more costs for alcohol related problems.

Although the goal of making a profit from the sale of alcohol is the same whether it is sold in government or privately operated stores, evidence suggests that government outlets consistently do a better job of balancing public health and safety concerns with business interests.

Shouldn’t the government remain the leading retailer of alcohol in the province if it means more revenue and less costs?


Author: Gerald Thomas


Author: Alissa Greer

A “modern” drinking practice: Alcohol and energy drinks

It is now timely to consider how liquor laws can promote the health and safety of all British Columbians as BC has decided to review its liquor policies for the first time since 1999. Drinking patterns change over time and often new products emerge. One such emerging issue is the growing practice of mixing energy drinks with alcohol.

The consumption of energy drinks has gained in popularity and the practice of mixing them with alcohol has become commonly adopted by young adults in Canada. Energy drinks are widely available in liquor outlets and at drinking events where they are also often heavily promoted. When cocktails which mix energy drinks with alcohol are ordered at drinking establishments, sometimes a pre-mixed cocktail is served and sometimes the customer has to mix the cocktail themselves.

Despite the regular practice of mixing alcohol with energy drinks (which may occur for several reasons), the labels of energy drinks warn against their consumption with alcohol. Mixing them with alcohol is not approved by Health Canada and is advised against. As reported by the media and in scientific research, multiple hospitalizations, deaths, and other adverse consequences have been associated with the consumption of alcohol and energy drinks. Researchers have found that the consumption of alcohol and energy drinks, compared to alcohol use alone, is associated with an increased risk of heavy alcohol use, requiring medical treatment, being hurt or injured, drinking and driving, and engaging in high-risk sexual behaviours.

In response to more general concerns regarding the safety of energy drinks, Canadian policy makers have considered implementing regulations on energy drinks, although these regulations appear to have fallen short in terms of addressing the mixing of energy drinks with alcohol (see policy report for more details). Other countries (e.g., U.S.) have addressed safety issues with energy drinks and alcohol by banning the production and sale of high-risk alcoholic energy drinks (high alcohol content cocktails marketed as energy drinks). In Canada, some provinces have limited the amount of caffeine which can be permitted in an alcoholic beverage to 30mg/beverage. This regulation is a step forward in protecting the health and safety of Canadian consumers, although it fails to address the hand-mixing of alcohol and energy drinks which is more common. It also does not address the availability of energy drinks in establishments where alcohol is sold.

Although the research in this field has its limitations, risks associated with combining alcohol and energy drinks has been identified. In these circumstances, liquor laws need to be adapted. Should alcohol establishments be permitted to sell energy drinks mixed with alcohol? Should energy drinks be sold in drinking establishments? Should energy drinks be heavily marketed in these establishments? A transparent discussion of this emerging public health issue is surely warranted in the context of the current policy review.

Should a modern BC liquor policy include regulations on selling high caffeine content energy drinks in risky environments like bars and clubs?



Author: Kristina Brache