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Bye bye BCLDB, or not?

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Re: Bye bye BCLDB, or not?

Postby Smurf » Jul 13th, 2012, 8:51 am

Homeownertoo wrote:

If Exel this time made a solid business case for liberating government assets while operating on a more efficient basis (even if that is due to lower salaries/benefts), the government would be derelict in its mission not to listen.


That makes real sense. Take away the buying power of the employees who support our economy and increase the cost to the consumer/taxpayer, as they apparently have done in Alberta. That makes good economic sense alright.

I would say it is fine to listen, but this is moving quickly past that point with absolutely no information on why. It just looks like another case of push it through no matter what.
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Re: Bye bye BCLDB, or not?

Postby Captain Awesome » Jul 13th, 2012, 8:58 am

Smurf wrote:Why can't they just give us some figures and some actual justification for what they are planning. We are paying the bills and own the system. We deserve at least that much. Lets put it to a referendum and see how the actual owners feel.


Oh please. Your average voter has IQ barely in double digits and can't balace the checkbook - and you want them to make a multimillion decision.
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Re: Bye bye BCLDB, or not?

Postby Smurf » Jul 13th, 2012, 9:00 am

And you trully believe after the last decade the Liberal governemnt is any better.
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Re: Bye bye BCLDB, or not?

Postby Captain Awesome » Jul 13th, 2012, 10:26 am

Smurf wrote:And you trully believe after the last decade the Liberal governemnt is any better.



It's not about liberal govt. I was simply astating thaty general public isn't capable of making these decisions, and the idea of referendum on this issue is simply dumb because of it.
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Re: Bye bye BCLDB, or not?

Postby Homeownertoo » Jul 13th, 2012, 10:40 am

Smurf wrote:From the information I have seen so far if their cost savings are similar to their current Alberta setup included increased cost to the consumer. The same consumer who is suppopsedly saving money as a taxpayer. I'll be waiting for any information proving otherwise but till that time I'm voting against it and not holding my breath.

That wasn't my observation, and I lived there before and after privatization. Enjoyed the cheaper wines and beers.
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Re: Bye bye BCLDB, or not?

Postby Homeownertoo » Jul 13th, 2012, 10:42 am

Captain Awesome wrote:It's not about liberal govt. I was simply astating thaty general public isn't capable of making these decisions, and the idea of referendum on this issue is simply dumb because of it.

I agree a referendum would be stupid, but I would like to see the numbers the gov't was given so we, as voters, can determine if we support the decisions the government is making.
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Re: Bye bye BCLDB, or not?

Postby Homeownertoo » Jul 13th, 2012, 10:45 am

Smurf wrote:That makes real sense. Take away the buying power of the employees who support our economy and increase the cost to the consumer/taxpayer, as they apparently have done in Alberta. That makes good economic sense alright.

It's a false economy to think you can raise everyone's wages to prosperity. There is something called reality. You only look at one side of the equation and think you are seeing it. I can assure you that you are not.
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Re: Bye bye BCLDB, or not?

Postby flamingfingers » Jul 13th, 2012, 11:33 am

Only Liberal partisans think that the Libs are on the right track here:
Friday, July 13, 2012
Lying about telling lies is Liberal truth

Margaret MacDiarmid was pushed onto the BCLDB platform by Christy Clark and Rich Coleman and the puppet masters behind them. Standing alone in the spotlight, the ironically named minister of open government is expected to justify the sale of British Columbia's liquor distribution system to friends of powerful Liberal lobbyists.

Not having been involved until late in the process, MacDiarmid can only repeat talking points provided by the creators of this proposed private monopoly. That leads to logical breaks such as when she said that existing warehouses are not adequate for modern distribution methods then suggested that government would rent those same spaces to the new private operator.

Strange that a political party dying from an excess of voter scorn should work so hard to please the Progressive Group. That company behaves like a drunk swallowing hard from his last bottle of liquor, knowing there will soon be no more to drink. At least, they'll take pleasure from one last swig.

Beyond Liberal partisans, it is hard to find people who think the BC Liberals are on the right track on this hurried privatization. Cynicism reigns. This amusement left in comments at a CBC news site reflects a common attitude:

"In the same manner as a double negative equals a positive do Cabinet Ministers in the BC Liberal Party believe that lieing about telling lies is the same as telling the truth?"


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

Postby logicalview » Jul 13th, 2012, 12:02 pm

Smurf wrote:That makes real sense. Take away the buying power of the employees who support our economy and increase the cost to the consumer/taxpayer, as they apparently have done in Alberta. That makes good economic sense alright.


Homeownertoo wrote:It's a false economy to think you can raise everyone's wages to prosperity. There is something called reality. You only look at one side of the equation and think you are seeing it. I can assure you that you are not.


They just don't get it.

Or they are suffering from Partisan-ism.

Nice post Homeownertoo

Image
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Re: Bye bye BCLDB, or not?

Postby flamingfingers » Jul 13th, 2012, 1:31 pm

The comment from a reader here was pretty funny... and bang on:

http://northerninsights.blogspot.ca/201 ... mment-form

While I have always shuddered at the audacity and evil-seeming agenda of the BC Liberals, I am trying to imagine what it must be like to be a MLA, cabinet minister, or the unelected premier herself at this time. After more than a decade of media collusion, ineffective legal and judicial oversight (to provide the checks our democracy requires), an ineffective opposition party, and an unassuming and uninformed voting public seduced by superficial 'tax cuts' (replaced with service charges, tolls, premiums, and then the carbon and Harmonized Sales Tax) and the Olympics . . . suddenly there is no quelling the anger and shame of the masses! Having been sold out (or sold off--illegally!) on every per-election promise and with every ministry in tatters, even the media can no longer help them spin or distract people from the truth about their hospitals, schools, courts, police, railroads, bridges, convention centers, stadium roof, liquor distribution, Evergreen line, communication directors, Telus Garden, BCHydro-gate, Smart meters,Enbridge, by-election defeats, BCLC, BC Ferries, ..

Oh, these must be sober and humiliating times for Liberal MLAs who have not been accountable or transparent for a long, long time.
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Re: Bye bye BCLDB, or not?

Postby Smurf » Jul 13th, 2012, 3:03 pm

Homeownertoo wrote:

It's a false economy to think you can raise everyone's wages to prosperity. There is something called reality. You only look at one side of the equation and think you are seeing it. I can assure you that you are not.


Where did I say anything about raising everyones wages. You do have a great imagination don't you.
I was talking about this specific case and this case only. I disagree with you when you say it would be good to have a for profit company Exel Logistics who I believe is wholly owned by the German company DHL owning our Liquor distribution. You seem to think that having them cut the BC employees wages to make a profit to be sent to the US or worse yet Germany Is somehow good for our economy. Even if it goes to world wide shareholders BC will see very little of it.

Please explain how taking money out of the hands of BC workers and sending it out of country can be good for us. I still maintain that keeping those dollars in province, to be spent and invested in province is better for us. According to all figures the liquor distribution pays for itself including employee wages and a profit for the government. How can cutting the employees wages and taking away that money to be sent out of country be good for us. On top of it all we loose the ownership of the property etc. forever.

In this case I disagree with your statement:

“If Exel this time made a solid business case for liberating government assets while operating on a more efficient basis (even if that is due to lower salaries/benefts), the government would be derelict in its mission not to listen.”

I'll say it again it makes no sense to me economic or otherwise to agree with cutting the wages of BC employees to make profits to send most if not all of them out of the province and probably out of the country. Maybe you think the Germans are going to use it to travel over here and spend money to help our economy.
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Re: Bye bye BCLDB, or not?

Postby Smurf » Jul 13th, 2012, 3:10 pm

You could be right, but not from what I have seen.
Example.



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


To me it looks like at least some of the private business's involved don't agree with you. Could it be that Alberta has less taxes and that is why you were purchasing cheaper, not because of less shipping costs.
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Re: Bye bye BCLDB, or not?

Postby NAB » Jul 13th, 2012, 7:14 pm

Excellent observation Smurf.

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Re: Bye bye BCLDB, or not?

Postby Smurf » Jul 14th, 2012, 7:48 am

I went looking for information on Alberta's privatization of liquor distribution and discovered this. I know many of you will ignore this information because of where it comes from, but please take a serious look at it with an open mind as to why we are discussing this. I am sure much of it is valid confirm able information. It gives us a real look into Alberta's privatization.

http://www.policyalternatives.ca/sites/ ... result.pdf

Canadian Centre for Policy Alternatives/Parkland Institute

The Alberta Liquor retailing Industry Ten Years After Privatization

Page 2

In 1993/94 the Alberta Government implemented major policy changes involving the control, taxing,
and distribution of liquor products. These changes included privatization of the retail and warehousing
functions, switching from an ad valorem (percentage of price) to a unit (flat) tax system of
alcohol excise taxes, and the ending of direct control of liquor regulation and moving to a legislative
and enforcement approach. Ten years later the retail industry has evolved into monopolistic competition
with its inherent excess capacity and high costs. The government has lost effective control of the
liquor industry which will likely continue to evolve into an oligopolistic market structure as chain
stores get greater control. Against the trends in other jurisdictions, liquor consumption has increased
(with its potential risks of increasing social ills), wholesale costs have risen, and retail prices have
increased. Although retail prices have increased, the tax revenues to government have fallen significantly
.


NOTE: Tax revenues have fallen significantly.

Page 3

The main changes in the industry ten years after privatization include the following: Retail outlets (excluding off sales) have more than tripled from 310 to 983. The individual stock items have increased over five- fold, from 3,325 to 17,000. Jobs have increased from approximately 1,300 to 4,000, while wages have fallen from over $14 per hour (in current dollars), plus a benefit package and civil service pension, to approximately $7 per hour. Warehousing has changed. The one publicly-operated warehouse in St. Albert, in 1993, is now operated by a private firm, and three private firms are licensed to wholesale beer out of warehouses in Calgary and Edmonton.


Tax revenues to the province have fallen significantly while employees have lost 50% of their wages. This means they are also contributing much less to the public coffers and have lost 50% of their purchasing power. Does anyone truly believe this is in the best interest of the province of Alberta. On top of that the profits made from these cuts are probably leaving the province and Canada to head office coffers in Germany. At least any Exel portion.

Page 21

Alberta government revenue from the sale of alcohol has fallen since the introduction of the unit tax (1993). The rates were decreased as the private marketing of alcohol led to price increases— increases which have been moderated because the share taken as government revenue has fallen.


PAGE 24

Table 4.1 that, with Alberta’s pre-1993 ad valorem taxes, the percentage tax increased with the alcohol content of the product. With the introduction of private alcoholic beverage retailing, Alberta changed to a unit (flat) tax regime on alcoholic beverages. With the separation of wholesale and retail prices in a privatized distribution system, the continued application of an ad valorem tax would have caused greater administrative problems with constant fluctuations in wholesale prices. The tax rates for Alberta under this unit tax regime are shown in Table 4.1

The initial unit tax system was introduced in November 1993 as ALCB sold off stores to the private sector. As the private retail market developed, prices started to rise and the Alberta government reduced the flat tax rates in August 1994, phasing the reductions in through a surcharge starting at 10% and falling by 1% every four weeks over the year.


CHECK OUT TABLE 4.1 ON PAGE 4 it shows the decreases and probably explains why Homeownertoo
saw price decreases.

PAGE 24/25

It is worthwhile to compare Alberta’s tax revenue under the new unit tax regime to that of British Columbia where liquor control is still similar to what Alberta’s was prior to privatization. Alberta and British Columbia both had an ad valorem alcoholic beverage tax system prior to 1993 before the Alberta government shifted to a flat tax method simultaneously with the introduction of privatization of the retailing of alcoholic beverages in Alberta. Figure 4.1 illustrates alcohol excise tax revenues as the percentage of total provincial revenues. At 3.02%, Alberta tax revenue in 1990 was a somewhat higher percentage than the national average (2.5%), while British Columbia at 2.66% was closer to the national figure. In Alberta, liquor tax revenues declined to 2.18% by 2002, while British Columbia revenues, although also falling somewhat, have experienced greater stability, remaining close to the Canadian average of 2.5%.

Figure 4.2 shows the same alcohol tax revenues in a different way. In this figure, revenues are measured in constant dollars (1992) per capita. In the early 1990s, prior to privatization, Alberta obtained considerably higher per capita revenue from liquor sales compared to British Columbia. After privatization, the alcohol tax revenue in Alberta began to decline and has become less than British Columbia’s after 1997.

Figure 4.3 shows the revenue in current dollars realized on each litre of absolute alcohol sold. This figure shows how Alberta’s revenue has changed from being greater prior to 1997 to less than that realized in British Columbia after 1997. Consumption in Alberta has risen to 8.6 litres in 2001, while consumption in British Columbia has fallen to 7.7 (Figure 2.1), yet the dollar revenue per litre absolute alcohol has been maintained and increased in British Columbia while it has fallen in Alberta.


Page 25/26

Laxer et al asked in 1994: “Will it [the flat tax regime] be as or more efficient than the previous public system was in producing revenue for the provincial government during its current program to balance the budget? In short, will privatization contribute to a more fiscally responsible Alberta?” The answer to this question is clearly NO. The revenue-neutral policy of the Alberta government was ‘successful,’ liquor revenue was constant in absolute current dollars over the period. However, with inflation, growth in population, and growth in sales, a constant level of revenue is really a loss. Measured appropriately, the
current unit (flat) tax system in Alberta has resulted in lost revenue to the province from alcohol beverages
.



Realizing that this is privatization of the whole liquor system and a change in the tax system to a flat tax to make that work (as explained in the article) I am sure we would see some of the same things happen. It probably looks great to the consumer as Homeownertoo says "decreased prices". I believe this is why Homeownertoo saw those decreased prices. But do we really want decreased prices at the cost of possible decreaseas in revenue to government, loss if income to employees, all in the name of profit for an out of country company to take home . I know I don't.
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Re: Bye bye BCLDB, or not?

Postby Homeownertoo » Jul 14th, 2012, 8:28 am

Smurf wrote:You could be right, but not from what I have seen.
Example.



"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

To me it looks like at least some of the private business's involved don't agree with you. Could it be that Alberta has less taxes and that is why you were purchasing cheaper, not because of less shipping costs.

Somehow I doubt that shipping are the sole costs involved, not to mention the issue of why they are higher in BC than Alberta. And I'm not surprised a distiller's organization or a brewer would prefer to work with a monopoly. Why should they favor the consumer? They are in business to make a profit and if they can collude with government to keep prices high, why wouldn't they. My concern is twofold: the best price for the consumer and, two, reducing the size of government and its role in the economy (for various reasons which I don't need to go into here). Keeping brewers, pubs and distillers happy with a monopoly situation is not my priority.

The only substantive issue you raise is salaries and profits. As for salaries, it is, once again, an illusory benefit to pay anyone over the market rate, since you are just taking money out of other people's pockets and supporting an inefficient operation. There is no economic gain (see Econ 101). As for taking profits out of country/province, that again is another bogus issue. First, profits amount to a small proportion of revenues, so we aren't talking about a huge number. Second, the company will almost certainly operate more efficiently, and that will be the source of profits its shareholders (wherever they reside) will get. Third, under your reasoning, the government should take over all economic activity because it will be good for British Columbians. Do you really believe such nonsense?
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