UW study shows expanding alcohol sales benefit both government and consumers
A University of Waterloo study undertaken by Associate Professor of Economics, Anindya Sen, asserts that keeping both The Beer Store and LCBO but expanding alcohol retail availability would preserve the $1.6 billion profit the LCBO provides the Ontario government, and even increase it.
The study was announced today via the Ontario Convenience Stores Association.
Based on 18 years of economic modeling and independent analyses of stats, primarily sourced from Statistics Canada’s provincial liquor board revenue from 1993-2011, the study concludes that selling alcohol outside LCBOs and The Beer store would maintain and set the stage for increased government profits.
Additoinally, the vast majority the Ontario government receives from sales of alcohol comes from wholesale markups at the LCBO.
“In releasing this study, our goal was to ensure that when the time comes for a real discussion about modernizing Ontario’s alcohol retailing system, people and politicians have all the facts,” said Dave Bryans, CEO of the Ontario Convenience Stores Association. “Professor Sen’s study shows that Ontario can expand alcohol retailing and still earn the revenue it now gets from the LCBO – and more. And at the same time, protect the value of the LCBO as an asset for the province.”
The study also illustrates the LCBO’s value as an asset, with the most profitable part identified as the wholesaling arm, which in turn possesses the most asset value, as compared to LCBO’s high-cost retailing arm.
The study was financially backed by the Ontario Convenience Stores Association, however conclusions and analysis are noted to be solely that of Sen.
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