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Bye bye BCLDB, or not?

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Bye bye BCLDB, or not?

Postby flamingfingers » May 22nd, 2012, 7:46 am

Bob Makin shares his latest FOI (what there is left after reams of redacted pages):

Monday, May 21, 2012
Exclusive: Libs keep lid on privatization plan

British Columbia Finance Minister Kevin Falcon revealed on Feb. 21 that the B.C. Liquor Distribution Branch's warehousing and distribution would be privatized. I reported on that day in Business in Vancouver that this was a priority for B.C. Liberal-connected lobbyist Patrick Kinsella and his client, Exel Logistics.

Then I became curious. What is the business case for this? Does a cost/benefit analysis exist? Is this a good deal for taxpayers?

On May 17, I got my answer. It is not satisfactory to me and it should not be satisfactory to you.

I received a Dec. 5, 2011 report to Cabinet and a Jan. 18, 2012 report to Treasury Board. Both are heavily censored and only contain information that is already in the public domain, via LDB service plans and financial reports. Bottom line: the government is keeping secret the reasons to justify selling off a key part of a profitable public asset. That is, if it has reasons to justify the measure beyond making Kinsella and his fellow lobbyist Mark Jiles happy.

Before you read the full FOI release at bottom, I want you to compare these two documents first.

"Exhibit 1" (with the Exel letterhead) is an excerpt from the Oct. 6, 2009 "Last Spike" internal memo by Exel Logistics vice-president Scott Lyons. The memo was Exel's playbook on how it wanted to privatize the B.C. Liquor Distribution Branch's warehousing and distribution. "Appendix C" is from the Cabinet documents, released under my FOI request.

Except for the headlines, both the Exel memo and the Cabinet submission employ an eerily similar font and warehouse icons.

The question I have is this: why would the B.C. cabinet have a document that looks (to my eyes, at least) so similar to one contained in an internal memo previously created by the company that has spent so much time lobbying the government to privatize liquor logistics?

See the documents here:

http://2010goldrush.blogspot.ca/
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Re: Bye, bye BCLDB.. or not?

Postby kelguy » May 22nd, 2012, 9:01 am

Frustrated pub and private liquor store operators in B.C. say the provincial government is blindly and needlessly rushing to privatize liquor warehousing and distribution.

“We can’t find any stakeholders that support this,” Alliance of Beverage Licensees of B.C. (ABLE) executive director Raechelle Williams told Business in Vancouver. “We also are particularly concerned about the lack of transparency and consultation.”

snip>>>>>>>>

Williams said ABLE is “perplexed” by the government’s desire to replicate the Alberta system, where Exel’s Connect Logistics unit took over from the government in 1994.

Matt Phillips, president of Phillips Brewery in Victoria, said his company pays $0.78 per case to warehouse and ship in B.C. and $1.53 per case in Alberta. He said B.C.’s method is “efficient, direct and is pretty well managed.”

“If we do go to a privatized model and we do end up with the same kind of costs as we have in Alberta, that ends up getting passed on to the consumer,” Phillips said.

snip>>>>>

C.J. Helie, executive vice-president of the Association of Canadian Distillers, said “poor service and high costs” are coming to B.C. if it adopts the Alberta model. “(B.C. has) done tons of great things for industry, consumers and taxpayers,” Helie said. “We’re pretty surprised that they seem to be going a little bit off their historical path of competition.

“We don’t see how moving from a government monopoly to a private monopoly is going to service those needs.”

http://www.biv.com/article/20120522/BIV ... vatization
Last edited by kelguy on May 22nd, 2012, 10:24 am, edited 1 time in total.
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Re: Bye, bye BCLDB.. or not?

Postby Merry » May 22nd, 2012, 9:31 am

I don't have a problem with the Government privatizing the distribution of liquor, but I DO have a problem with them doing it in such a way that it smells of favouritism and/or cronyism.

If something is a good idea, the Government should have no problem using facts and figures to convince the Public that the idea should be implemented. That applies to any and all Government proposals. So, if they are unable to use facts and figures to sell their idea, then maybe the idea isn't such a good one after all.

The other problem with this particular proposal, is that it isn't privatizing the distribution of liquor in such a way as to create competition. What would actually happen is that one distributor would have a monopoly. And in monopoly situations, the Public is best served by Public, not private, ownership.

So, if a monopoly is in the best interest of the Province the Government should retain ownership of the Liquor Distribution Branch. However, if the Province would be best served by privatizing Liquor Distribution, the current monopoly should be broken and liquor distribution opened up to competition.

As the current proposal does neither of those things it is, in my opinion, a bad proposal. And the fact that the Government doesn't appear to be able to make a good public argument to support their idea, reinforces my line of thinking. This deal should not be allowed to proceed in its current form.
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Re: Bye, bye BCLDB.. or not?

Postby NAB » May 22nd, 2012, 9:54 am

Exactly. Typically monopolies are very bad for an economy. Competition is what makes things work, but then BC governments of whatever stripe historically haven't exactly been noted for supporting the concept of open and free market competition.

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Re: Bye, bye BCLDB.. or not?

Postby hobbyguy » May 22nd, 2012, 10:28 am

There is a distinction between a government monopoly and a private monopoly.

What is being proposed here is a switch between a government monopoly and private monopoly. I fail to see how, in any way shape or form, this would benefit British Columbians. The government granting a monopoly to a private company is a corrupt practice. At least if it's a government monopoly some funds flow back to the taxpayer.

Whether or not there should be a monopoly in this case is a different issue, and I for one would come down on the side that a government monopoly in liquor distribution does provide adequate benefit to the public.
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Re: Bye, bye BCLDB.. or not?

Postby Merry » May 22nd, 2012, 11:02 am

I don't know enough about the issue to know whether or not a liquor distribution monopoly is in the Public's best interest. But I do know that privately owned monopolies are never in the Public's best interest. If the Government believes that liquor distribution should remain a monopoly, then they should retain Public ownership.

But I'd be interested in hearing people's views about the pros and cons of liquor distribution remaining a monopoly or being opened to competition. Because right now, I don't see any good reason why it couldn't or shouldn't be competitive, but I am open to being swayed if someone makes a good enough case for the monopoly idea.
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Re: Bye, bye BCLDB.. or not?

Postby Urbane » May 22nd, 2012, 11:29 am

Right now about 55% of the liquor distribution in this province is public and the other 45% is private. After the two government warehouses are sold the distribution will be 100% private. I'd like to see the details before I pass judgment one way or the other but in general government operations tend to be bloated and inefficient so this transition has the potential to be positive. I agree with Merry, though, that private monopolies are not a good thing and arguably they're worse than public monopolies. As I say, I want to see the details before passing judgment.
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Re: Bye, bye BCLDB.. or not?

Postby kgcayenne » May 22nd, 2012, 11:39 am

Profit: Where do you want it to go? Private company for private benefit or Gov’t coffers with more potential for public benefit?

In comparison to the private joints, BC Liquor store staff members are well-paid, well-trained, and helpful. In the private joints they’re paid minimum wage or barely higher and perform their jobs that way. Some don’t even know the law. I watched one of the staff at a private store hassle a mother with her child and send the child outside. This staff member did not even know that a minor is allowed to be with a guardian in a store where closed liquor is sold. She was a real ‘peach’ about it too: “Liquor is liquor” she snarked. She was uninformed, poorly trained, and downright rude. BC Liquor store staff can answer questions about product and provide meal accompaniment recommendations; I don’t think that wench in the private store could.
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Re: Bye, bye BCLDB.. or not?

Postby The Green Barbarian » May 22nd, 2012, 11:46 am

kgcayenne wrote:Profit: Where do you want it to go? Private company for private benefit or Gov’t coffers with more potential for public benefit?
.


The government shouldn't be running pretty much any business that isn't "essential" for the public good. I am never really wild about the concept of money going into government coffers from any source other than taxation. Let business run businesses, earn revenue and pay taxes to the government. It's a tried and true model that works. Anyone who wants the govenrment to run anything should really consider the public record and see why it's a bad idea. Controlling our booze distribution isn't an essential public service, so government doesn't need and shouldn't be doing it.
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Re: Bye, bye BCLDB.. or not?

Postby Urbane » May 22nd, 2012, 11:57 am

    The Green Barbarian wrote:The government shouldn't be running pretty much any business that isn't "essential" for the public good. I am never really wild about the concept of money going into government coffers from any source other than taxation. Let business run businesses, earn revenue and pay taxes to the government. It's a tried and true model that works. Anyone who wants the govenrment to run anything should really consider the public record and see why it's a bad idea. Controlling our booze distribution isn't an essential public service, so government doesn't need and shouldn't be doing it.

My thoughts exactly. Governments should stick with the essentials and booze distribution doesn't pass that test. Time for the government to get out of the booze business completely and that means not only distribution but sales as well.
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Re: Bye, bye BCLDB.. or not?

Postby flamingfingers » May 22nd, 2012, 12:04 pm

Let business run businesses, earn revenue and pay taxes to the government.


What a great idea!
/sarcasm off.
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Re: Bye, bye BCLDB.. or not?

Postby hobbyguy » May 22nd, 2012, 12:19 pm

So if government operations are necessarily "bloated and inefficient", how come private distribution in Alberta is nearly double the price of government distribution in BC?

This myth of government operations necessarily being inefficient is propaganda thrown out by business interests who see a way to put money in their pockets.

Private businesses can be just as stupid, and just as inefficient, especailly large ones. Good example is Shaw/Shaw Direct "bundling". To get the bundle price you have to have a VOD box installed. I said I didn't want it, but if I wanted the discount I had to take it...so they sent a technician out, installed the box, and I get the discount at huge cost to them. The VOD box just sits in the corner and gathers dust.

So my point is, government operations are no more, and no less, subject to being "bloated and inefficient" than private ones. Any "effeiciencies" I have observed have simply been cuts born by working folk, that change the wages equation, and quite often lower the service level. Just look at how much trouble BC Hospitals are in with "privatized" cleaning staff not being able to keep up the cleanliness.

And if you think that politics is a factor, you're right, but show me a big corporation, and I'll show you politics just as bad or worse.
We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both. - Louis D. Brandeis
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Re: Bye, bye BCLDB.. or not?

Postby Urbane » May 22nd, 2012, 12:38 pm

    hobbyguy wrote:So my point is, government operations are no more, and no less, subject to being "bloated and inefficient" than private ones. Any "effeiciencies" I have observed have simply been cuts born by working folk, that change the wages equation, and quite often lower the service level. Just look at how much trouble BC Hospitals are in with "privatized" cleaning staff not being able to keep up the cleanliness.
Bloated and inefficient private operations end up going bankrupt while bloated and inefficient public operations end up receiving more tax money.
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Re: Bye, bye BCLDB.. or not?

Postby GordonH » May 22nd, 2012, 1:07 pm

So BC liquor distribution is heading to private, well the only issue I have with this is wages of employees. Which is most likely to be much lower, what the hell who needs an income that they can live on right.
Sell your home (if you can) and stuff your family into 1 bedroom apartment, their you go all fixed.

Because everyone knows service industry workers don't really matter at all........... right. Yes, go back to school & get a real job......... funny thing is everyone did just that who would be doing those jobs. Right Canada would just go out and bring in people in from where they can get them to do those jobs, gotcha.
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Re: Bye, bye BCLDB.. or not?

Postby The Green Barbarian » May 22nd, 2012, 1:25 pm

flamingfingers wrote:What a great idea!
/sarcasm off.


of course it's a great idea. And it works, or you wouldn't be enjoying one of the best qualities of life in the world right now. If you don't like it, feel free to move to North Korea.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.

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