BC – Page 3 – Matters of Substance

After nearly 80 days, the BC liquor policy review wraps up today. For the last 8 weeks we have followed the comments and tweets and have heard thoughts and opinions from the public on how to change liquor policy in BC. In reviewing the comments on John Yap’s blog, several main themes continued to emerge. First, it is clear that many British Columbian’s feel the current liquor laws are outdated (i.e., “our liquor laws can only be described as archaic – insulting, too”). We agree – in the last decade we have learned much about effective alcohol policy internationally, as well as the costs and benefits of alcohol, which are not reflected in the current laws.

Second, the overwhelming majority of comments centered on a desire for increased convenience and access, both for sale and purchase of alcohol and offered suggestions such as selling alcohol in grocery stores, allowing minors to eat in pubs, and having fewer licensing regulations. Many felt that these changes would help boost local economy and tourism revenue (i.e., “Canada is one of the only countries in the world that restricts the sale of beer and wine to liquor stores. This is a huge inconvenience for consumers, hurts tourism, limits competition, and does not help our economy in any way”), while others cautioned against the harms potentially caused from alcohol, with a particular concern about increasing access to minors (i.e., “Long-term, it will encourage young people to consume more alcohol”). Further, many comments emphasized personal responsibility and suggested that liquor regulations should not punish the majority of responsible drinkers for the irresponsible few (i.e., “Why not stop punishing people for wanting to have a beer at the beach with some friends, and instead punish those who are drinking irresponsibly”). In our alcohol policy blog series we have tried to respond to these comments and offer evidence to facilitate an informed discussion around some of these issues such as balancing harms and costs, privatization, and increased accessibility.

John Yap’s announcement Tuesday indicates that BC may well go forward with some initiatives to increase consumer convenience in BC, such as selling alcohol in grocery stores. We understand the value placed on convenience in our busy lives and appreciate also the desire from people in the business sector to improve the viability of their enterprises in a challenging economic environment. We hope to see more announcements that respond to the desire for convenience while addressing British Columbian’s desire to minimize the number of deaths, hospitalization, and injuries caused by alcohol in BC every year. We know from a recent random survey of people in BC that 84% are in support of using liquor laws to reduce these types of problems that are associated with alcohol use. Research in British Columbia suggests that influencing the price of the cheapest products is of far greater significance when it comes to improving health and safety outcomes than are the number of liquor outlets. Furthermore, maintaining minimum alcohol prices protects the profits of many sectors of the alcohol industry, enhances government revenue and impacts mostly on the heaviest alcohol consumers – with substantial health benefits resulting for that group. A modern approach to liquor regulation in the 21st-century involves allowing consumers more responsibility, providing them with better information to make choices and further encouraging those choices through a price structure which favors lower alcohol content beverages. These changes may help reduce any increases in alcohol-related problems that could arise from loosening restrictions in order to increase convenience. With the right balance, maybe it is possible to increase convenience while using evidence-based strategies to simultaneously reduce the substantial harms from alcohol.

***Tune in next week for the first post in our next Blog series “The cannabis question: where do we go from here?

Authors: Kara Thompson, PhD and Tim Stockwell, Director, Centre for Addictions Research of BC

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

Tag: BC

What happens now? Reflecting on the BC Liquor Act Review 2013

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