BC Politics with Hubert Beyer

VICTORIA -- The liquor distribution branch has just released its latest annual report, a 48-page document that should have been published under the heading A Licence to print Money.

Take the opening paragraph of the section dealing with profits. "The branch exceeded the revenue target of $420 million set by the government for this (1986-87) fiscal year. Net income was$425 million from total liquor store sales in the province of $1.188 million."

Now that's what I call profit. There isn't a retailer anywhere who wouldn't be delirious at making a 35.7 per-cent profit after paying salaries, rent, taxes and all the other nuisances that take the fun out of making money.

Also keep in mind that in addition to the profit from retailing alcoholic beverages, the government collects taxes from brewers, distillers and wineries that make the stuff, and the hotels, restaurants, lounges and pubs that sell it.

The report makes it clear that booze has lost none of its attraction. The statistics are enough to drive anyone to drink. In the 12 months covered by the report, British Columbians guzzled 233 million litres of beer, 36 million litres of wine, 23million litres of hard liquor and 12 million litres of coolers.

If you took all the water out of all those beverages, you would be left with more than 25 million litres of pure alcohol, all of which played havoc with B.C. livers, kidneys and God knows what else during those 12 months.

Alas, the government offers something in return for gouging connoisseurs of spirits at the liquor store cash register. British Columbia's liquor retail system has got to be among the best in the world. For product choice alone, it offers the consumer more than any private retail outlet could afford to.

In all, British Columbians can choose from 2,330 different wines, beers, coolers and hard liquors. That's the total number of listings -- products approved for sale in B.C. -- although no tall of them are available in each store.

Least available are specialty listings, generally found only n the branch's specialty stores. That's where you find bottles of wine for $200 a piece and whiskeys that rival King Tut in age. For the liquor distribution branch, privatization isn't a new concept. For years now, the branch's own liquor stores have existed side by side with rural agency stores, licensee retail stores and the various on and off-site stores operated by producers.

Sharing the field with the private sector has, in part been the result of the branch's never-ending quest for the maximization of profits. The other reason is a genuine desire to deliver the best-possible service, even in remote areas.

In 1985, for instance, the government permitted wineries to establish retail stores away from their production sites.  That same year, certain hotels and neighborhood pubs were allowed to open retail stores on their premises for the sale of beer, wines, ciders and coolers. Two years later, there were 79 such outlets.

Now, to give you an idea of how the government manages to turn what many people consider a vice into cold, hard cash, here's a breakdown of product cost and end price to the consumer.

Take a bottle of B.C. wine with a retail price tag of $4.10. That same bottle costs the government $1.90 plus 34 cents Federal excise tax and another 34 cents federal sales tax, raising The price to $2.58. Now the liquor distribution branch adds its markup of $1.29 and slaps a provincial sales tax on the whole package. That's how a $1.90 bottle of wine gets to be a $4.10 bottle of wine.

The figures for hard liquor are even more astounding. A $15.95bottle of hootch leaves the supplier with a price tag of only$2.77. Before you finally buy it, the federal government has made4.12 on the deal, and the provincial government $9.06.

Even a case of domestic beer, the working man's drink, puts more money into the two governments' pockets ($5.85) than into the breweries' (4.85).

As an aside, the markup for imported wine is much higher than that for domestic wine. In the example above, the branch's mark-up for domestic wine is about 67 per cent. By comparison, the mark-up on a $9.30 bottle of imported wine is $4.70. That's a whopping 144 per cent of the $2.82 the government pays for the wine.

Now you know how the government earns more than half of this year's deficit from the sale of booze. Or to put it another way, without liquor profits, the anticipated deficit would have been$1.3 billion instead of only $850 million.