In this March 4, 2011 photo, a bartender begins to pour a drink from a bottle of Jack Daniels at a bar in San Francisco. Liquor company Brown-Forman Corp. is reporting a 30 percent gain in third-quarter net income Tuesday, March 8, led by surging international sales and a strong showing by its flagship Jack Daniel’s brand. (AP Photo/Paul Sakuma)
It now costs Islanders more for the convenience of getting their booze at liquor agency stores, thanks to a quiet price hike earlier this month.
Prices for beer, wine and spirits at the seven liquor agency stores in P.E.I. went up five per cent for consumers on May 1st.
Tourism Minister Robert Henderson, whose department oversees the P.E.I. Liquor Control Commission, said Tuesday the change was made on the premise of convenience.
“The agency stores are all in locations that are a bit more convenient, you don’t have to go as far to get to a normal, corporate outlet, and so the five per cent is a way to reflect that,” Henderson told reporters Tuesday.
“It does also provide our corporate stores with a little bit more of an advantage, and for those that are price conscious, they still have the corporate stores, which will go on the same pricing concept as in past.”
Profits from this price increase will be split between the PEILCC and the private agency retailer.
The estimated increase in revenue for the province from this increase is estimated to be around $150,000.
Henderson acknowledged it was partly a revenue-driven decision.
“We hope it will generate a little more income to the Liquor Control Commission as well to the agencies themselves,” he said.
“But there is a little extra work that goes with providing the support to those agency stores… we just felt this would be a little way to get a little more cost recovery on doing that.”
Opposition Leader Steven Myers says he believes this shows the agency stores have been hurting the bottom line for the provincial liquor outlets.
The P.E.I. Liquor Commission turned only a small profit last year and did not hit its budget targets, which has forced it to lower its revenue expectations for this year.
According to the PEILCC’s 2013 annual report, the agency stores were deemed a success, accounting for a 10 per cent increase in new volumes of alcohol sold.
But their success did indeed come at the expense of some provincial retail outlets.
The North Rustico liquor store, which feared losing business to the new agency store in Cavendish, ended 2013 at a loss of $80,721 in gross receipts. The West Royalty location also posted a loss of $129,820.
Even the commission's flagship store in Charlottetown lost money, posting a loss of over $318,000 in 2013.
Myers says he believes Premier Robert Ghiz should open up the playing field to allow more private operators to sell alcohol, now that he is allowing a price differentiation.
“If he’s putting the price up and calling it a convenience item, now it should be open for more of the corner stores to sell.”
Selling booze is a big money maker for these private stores, and more Island operators should have access to these products, Myers said.
“I think doors need to be opened up to other businesses, who could meet the requirements of providing that service,” Myers said.
“They need to be fair to businesses, and businesses are suffering on Prince Edward Island.”
When the issue was debated during budget estimates last week, several MLAs mentioned retailers in their ridings who would like the opportunity to become a liquor agency.
But Henderson said, with the decreases in sales already happening at some of the provincial outlets, he is not looking to expand number of agency stores at this time.
“The whole idea of agency stores were to get a net gain,” Henderson said.
“There’s a point of limiting returns… it’s still about trying to find that balance that still protects our workers and staff and not have a huge impacts on that, and still have some gains and that sense of convenience to the consumers.”