Beer and elections: Creating sorrows to drown

The campaign hoohaw about the price of beer should make you despair.
Private liquor stores are miffed at the NDP plan to roll back price breaks the Liberals have handed them in the last few years.
The bigger discounts cost taxpayers and enriched the well-connected private companies, who convinced the Liberals their profits weren't high enough. (You might try that - ask the store if it will cut prices for you because times a little tough.)
You can debate the largesse as a policy measure, but it's small potatoes in terms of election issues, unless you own a private liquor store.
Here's a primer. When the Liberals decided to allow private liquor stores in 2002, they said the operators could buy their stock at 10 per cent below the retail price in the province's liquor stores.
If a six-pack of beer sold for $10 in the government store, the private operator could buy it for $9 and mark it up to cover operating costs and leave a profit.
But the Liberals messed up the whole privatization effort. They told private operators the public stores would be closing.
Then - a little late, really - the government looked at the numbers. Closing the public stores would mean a big drop in government revenues, and thus higher taxes. There was no public advantage, just a big cost.
So the government reneged. That wasn't fair to the private operators, changing the rules after they had invested.
So to sweeten the deal, the government gave them a bigger discount - 12 per cent. For a store doing $2 million in sales, that meant an extra $40,000 a year in profits.
Not enough, said the stores. They kept lobbying and the next year got the discount raised to 13 per cent.
And, naturally enough, they kept lobbying - insider Patrick Kinsella was involved with one of the largest companies - and in 2007 John Les quietly gave the private stores another windfall. The discount jumped to 16 per cent.
There was no public benefit. Quite the opposite - every time the government increased the price break for private stores, it reduced its own revenues. And that means taxes had to go up.
And there was no economic case for the change. Stores weren't closing. In fact, in the year before the last gift, the number of private stores increased by 10 per cent and the leading company said it planned more expansion.
The government just offered a series of gifts to the private companies, at your expense. The discounts will mean more than $50 million a year transferred from government to a select group of private businesses.
The NDP, looking for revenue to support spending increases, said in its platform it would rescind the changes and take the discounts back to their original, 10-per-cent level. That would produce $155 million over three years, the party says.
Horrors, says the industry. The change would mean the companies would pay an extra 80 cents wholesale for a six pack of beer, which they would pass on to their customers. People seeking convenience would pay; the frugal would likely go to a government store.
The industry's bigger concern is the NDP plank to raise the minimum wage from $8 to $10. Most jobs in the private liquor business are minimum wage; the industry believes having to pay staff $10 an hour would add 15 to 20 per cent to its operating costs.
Wiping out the whole discount is probably unfair. The initial increase, in 2003, was reasonable compensation for the way the Liberals changed the rules of the game after some private companies had entered the industry.
But the following two price breaks were simply gifts from the government to a group of well-connected private companies (and political donors). At taxpayers' expense.
Footnote: Private liquor store expansion has increased the number of alcohol outlets from 786 in 2002 to 1,294 in 2008. A report last year from the province's chief health officer noted that the expansion of private outlets had identified as a factor in increasing addiction and problem and youth drinking.