Liquor retailers watching closely as Alberta survey into markup system concludes

The Alberta government says it sees potential in making changes to how markups are applied on different liquor product categories as part of a comprehensive review, the first of its kind since 2003.

A survey of Alberta's liquormanufacturers conducted by the provincial government into the subjectended earlier this week.

The review was prompted by a number of changes at the regional, national and international level, according to a spokesperson forthe province's Service Alberta and Red Tape Reduction Ministry, along with shifts in the types of liquor products and consumer demand.

"[That]made it necessary to review the current liquor markup system to determineifit continues to support the long-term viability of the province's liquor industry and serve the interests of all Albertans," wrote Brandon Aboultaif, a press secretary to Minister Dale Nally, in a statement.

"Specifically, there is an opportunity to improve the equity regarding the markup applied between different product categories, while supporting both small and large producers, as well as looking for further opportunities to reduce red tape in the liquor industry."

As part of the province's private liquor retail model, Alberta Gaming Liquorand Cannabis (AGLC) applies a markup to liquor products sold in the province. Rates vary, and the money goes to provincial general revenue.

Alberta Liquor Store Association president Ivonne Martinez said the association wasn't invited to participate in the survey. However, she said that, since 2003, there have been a number of new products on the market that could have prompted its launch.

"We always support fair and equitable treatment of all of our suppliers and producers in Alberta, so we hope that the outcome comes up with something that everyone can live with, and can keep the markup at a level place, so that consumers don't have to pay any more for the product," Martinez said.

Government studying expansion

Andrew Ferguson, owner of Kensington Wine Market, said it makes sense to review the markups so long as customers aren't negatively impacted by any eventual changes.

What more concerns him are results into a long-awaited review into the possibility of expanding alcohol sales into grocery and convenience stores in the province.

The provincial government is currently reviewing the results ofan MLA committee that recently met with grocers and liquor industry representatives and is considering policy options, but there's no timeline yet around any decisions.

In February, Ferguson sent a letter to Alberta Premier Danielle Smith and the Service Alberta and Red Tape Reduction Ministry, stating that an expansion, coupled with other economic pressures, would have significant impacts on the industry.

"There is a strong likelihood that [the proposed changes] would ultimately force me to close the business I have worked so hard to build," the letter states.

Since moving to a privatized model in 1993, Alberta has seen a huge expansion of its liquor landscape, increasing from 803 liquor retailers in 1993 to2,418 liquor retailersas of March 31, 2023, according to the AGLC.

That level of access is enough, in the view of Martinez, who is also concerned about the possible expansion of alcohol sales into grocery and convenience stores.

"I have not heard anybody saying that they had a hard time finding a liquor store ... they're everywhere," she said.

Sixty-four per cent of Alberta's population now lives within one kilometre of a liquor store, according to a2018 Statistics Canada report.