Bye bye BCLDB, or not?

[my5cents]

It's actually quite impossible - because distribution and warehousing is simply an expense without any revenue generated. Revenue is being generated when somebody buys this service - currently it's just part of operations. So, hence my question - who says it's a money-making entity and why do people classify it as revenue-generating asset?

The question that one should be asking - will they save money by outsourcing these operations? Because they will have to pay for these through RFP process - bids would have be submitted, etc. but at the end of the day they won't have to pay for the operations of them.

And that is the question.

Not quite. Most organizations and the LDB is no different, segments their operations and show each independently.

ie, a car dealership runs their new car sales division, their used car sales division, mechanical shop and perhaps a body shop. When a trade-in needs service before it can be sold the mechanical shop charges the used car sales division for the repairs. At the end of the month or fiscal period, each is accountable for their own balance sheet and profit and loss.

In this case the warehousing operation makes a "profit" that it accounts for. No matter if it is selling to a government liquor store or a private store.

Private industry is circling like sharks (and actually lobbying to the govt. to sell the operation) aren't looking to start a non-profit business.

And... before you say "well private industry is more efficient and it will cost less". The LDB labour cost of the handling, per case shipped is $1.74 and that, apparently is very good.

In Alberta the wholesale price of liquor went up upon privatization.

[my5cents]

Go to the liquor store in the OK Corral on Kirshner. Same prices as the government, and they are very friendly and helpful. More and more private ones are advertising that they are matching the government pricing. You would think in an open competitive market, you would have to if you wanted to survive.

I guess it's just me but if every liquor store in BC charged the exact same price and every store (government and private) was staffed by great people, who were well trained and knowledgeable in their products. I'd still purchase my booze at a government store.

But that isn’t the case because generally the two types of stores aren't even close to comparable. Most if not all private liquor stores have a limited selection of brands and containers (variety of sizes). The liquor equivalent of doing grocery shopping at a 7-11. Prices are generally lower at government stores and private liquor store staff usually reflect the quality that comes with a wage that is, or near to, the minimum.

Every cent of net profit from a government store goes towards supporting government expenditures, it goes towards hospitals, emergency services, etc etc. If the government doesn't receive that money they will have to increase taxes. Face it "government" is us. We own and realize the profits from "our stores".

Every cent of net profit from a private liquor store goes to a few people who own that store and a portion of that profit is realized by the owners as a result of lower compensation paid to staff in wages and benefits.

Should I support a couple of entrepreneurs or all the people of BC ???

[Captain Awesome]

My question would be if it doesn't make money why would private enterprise want it. Are we then going to start paying them to run it?

Yes. Govt gets out of operations and outsources it to private companies to run it through RFP process. They issue a request for proposal, businesses submit their bids, they usually pick the lowest and go with that. Will they save money by doing it - that's the question. It only makes sense to do if at the end of the day they save money without interrupting the money-making process of retail and wholesale operations. Plus it limits their exposure to risks.

[Captain Awesome]

Not quite. Most organizations and the LDB is no different, segments their operations and show each independently.

That might be possible - in fact on a second thought, they must be accounting for it. Would be interesting to see them.

[my5cents]

That might be possible - in fact on a second thought, they must be accounting for it. Would be interesting to see them.

I think I heard the figure of $170 million. I could be wrong.

I've searched and if the LDB or the government have reported the net profit of the warehousing, they've hidden it well.

[The Green Barbarian]

Every cent of net profit from a private liquor store goes to a few people who own that store and a portion of that profit is realized by the owners as a result of lower compensation paid to staff in wages and benefits.???

That's completely untrue. A big % of the sale of alcohol goes to the provincial government. The HST goes to the Feds. You really should do more research before you write things like this.

Should I support a couple of entrepreneurs or all the people of BC ???

Every time you buy booze you support all of the people of BC - you are paying a crapload of provincial tax. I know, I used to work at a winery, so I have seen how much of a price of a bottle of VQA BC wine is government tax. If you really want to pay government tax, remit a special dispensation of your own accord from your own cash. I don't drink much wine, but when I do, I like to buy direct from the winery, as I know that a much bigger chunk of the cash from the sale of that wine goes into the winery's pockets, and without our wineries surviving and thriving, there's no BC wine. I'll support the little guy every time over paying taxes to the government, just out of priniciple. The government will waste a lot of it, we all know that, while the winery will reinvest the funds in a bigger winery and hire more people. That's how basic economies work.

[Captain Awesome]

I think I heard the figure of $170 million. I could be wrong.

Well, hearing and knowing are two different things, no offense intended. I hight doubt it, by the way - almost 20% of BCL profit comes from transportation? So far nothing indicates that warehousing and distribution turn any profit and only cost money - I would love to see official figures.

[NAB]

We've been over all that before in similar threads. Including links to the BCLCB financial statements and year to year comparisons.

Nab

[my5cents]

That's completely untrue. A big % of the sale of alcohol goes to the provincial government. The HST goes to the Feds. You really should do more research before you write things like this.

I said net profit. Not one cent of net profit is tax. That's why it's called "net profit"

I didn't even refer to the taxes paid on liquor, (they are huge). My discussion was net profit and that's what I said.

You think I'd need to research what tax goes to who ? Why ? Since I'm talking about net profit, which is what is realized AFTER all the taxes have been collected and remitted to the government.

There is no reason to privatized liquor stores, except if you are a politician who has a debt to pay to your private industry backers.

There are lots who are going to say that government should just govern etc etc.

I look at it this way. The government needs to collect money. If they don't get into an endeavor that earns money they will get that money thru taxes from all of us. If they decide to make the same revenue from liquor after privatizing the LDB then prices will go up.

Taxing and making a profit from an item that is 100% non-essential, like booze, is great with me. If I don't want to pay the huge tax and profit component, I just don't buy it. It's a voluntary tax.

I'd be totally happy if the government was the only vendor of cigarettes too.

In this case we will be paying the same for liquor. Do we want to reduce the amount that the government makes and have them tax something else ? All the while the entrepreneur is paying poor wages to his employees vs the decent wages paid to the LCB employees ?

[my5cents]

Well, hearing and knowing are two different things, no offense intended. I hight doubt it, by the way - almost 20% of BCL profit comes from transportation? So far nothing indicates that warehousing and distribution turn any profit and only cost money - I would love to see official figures.

Yes, I would love to see the official figures as well. Strange that they are never mentioned. That's not like the Liberals to hide information,,,, is it ?

As I said, I could be wrong. But think it through. We have a large private company that has lobbied for 6 years through a high power Liberal insider to convince the Liberal government to sell the liquor distribution. ........and they are doing this because it doesn't make money ??????? Come on.

I suspect there are two reasons. 1) it makes money and 2) it's the first step to privatizing liquor in BC.

[Captain Awesome]

...and they are doing this because it doesn't make money ??????? Come on.

It doesn't have to make money to be appealing for a private company. If they take over they make money by providing warehousing and transportation and bill BCL for it. Of course after expenses they get some profit. Any distribution company would be happy to have more guaranteed business for their employees, hire more staff, get more trucks, etc.

[Logitack]

baldry weighs in on the LDB. surprisingly, i would go as far as saying shocked, that baldry questions the wisdom of this sell off. no business rationale, political expediency, rising liquor costs, liberal political insiders at the forefront of the RFP (aka cronyism), and lack of transparency.

http://www.thenownewspaper.com/business ... story.html

[kgcayenne]

...it's the first step to privatizing liquor in BC.

Damn right it is.

[NAB]

While I really cannot see the warehousing/distribution side of the operation as a standalone profit centre as currently structured (although it would be in private hands), there is no question that booze, like cigarettes, is a huge money generating machine for government. In addition to the government essentially having a monopoly on the product (and set its pricing/profits - at least at the final wholesale level and any retail sales directly through the LCB outlets) from one end of the chain to the other, plus get the "profits" LCB generates from internal retail and external wholesale sales, they also derive revenues from taxing the product (and most of the resources used to produce, warehouse, and distribute it), the "profits" of any private sector participants, the salaries/wages of ALL who work in the industry whether public sector side or private sector side, as well as taxing via sales and other taxes and fees most of the things those workers spend their after tax incomes on.

So at the end of the day and "cronyism" aside, I am left wondering what the government can possibly lose in terms of revenues by splitting off the warehousing and distribution into the for profit control of the private sector since they can simply price and tax to cover any financial downside that may result for government anyway. And conversly, what they (we) gain from it (other than some one time revenues from the sale of some property into private hands as well).

I'm still going to be very curious and suspicious about the resulting chain of ownership and potential future development associated with those properties falling into private hands.

Nab

[The Green Barbarian]

Now THAT is some good news, GB. I live in the South Okn, however where higher prices and poor service in private liquor stores is common. Lets hope they all get on the bandwagon of price matching and educating/training their staff.

I hear what you are saying. I went into the private store in Guisachan Village one time to buy some beer and almost fell over at the prices. I don't know how they stay in business with those prices. I've never been to Jammers or the store in the Capri on Harvey - anyone know what their prices are like?