Alcohol Privateer Fear-Mongerers, With Flaky Arithmetic


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In what the industry is calling the NDP’s “six-pack attack,” private store owners are warning an NDP win on May 12 could increase the price of a half-sack of suds by three dollars

The NDP’s promise to increase the minimum wage from $8 an hour to $10 would have a disproportionate impact on the food-service industry, she said. “You could see the price of a bacon-cheddar burger at Earl’s jump from $13.55 now to $16 under the NDP. A burger at the Cactus Club could go from $14 to $16.60.”

via NDP’s pledge to up beer prices brews woes.

Before I address twisted arithmetic, let me just say that I don’t buy my BC brew at private liquor stores. Their selection is overpriced and awful, their stores are generally untidy, they are understaffed with usually not-so-thrilled workers who are paid awful wages–no surprise there.

Without injecting any numbers, a private liquor store is making a killing if it sells beer at prices higher than government stores, yet pays people minimum wage, thus less than the BCGEU employees at government stores. That’s got to make some sense, right?

And why do the privateers get a 16% discount on products compared to government liquor stores? Because Gordon Campbell will subsidize privatization wherever he can. Corporate welfare 101.

So, I have absolutely no sympathy for the privateers. Their criticisms make me just shake my head at their baldfaced greed.

The best part, though, is that if you buy your beer at public liquor stores, none of this neoLiberal Party fear-mongering will affect you at all! And the threatened restaurant burger price increases are made up as well, so have no fear.

That said, let’s look at the math. You can take a look at the BC NDP’s analysis of public and private liquor costs here.

But here’s my first question. If a 6-pack of beer costs $12 at a private liquor store [already $2 more than at a government store] and the privateer owners are claiming that a $2 minimum wage increase from $8 to $10 will cause the $12 6-pack to cost $15, what kind of labour costs must they have? I know this sounds like a word problem from grade 9 Math or something, but just think it through.

If there are [an unrealistically high] 3 employees making $8/hour on duty over 12 hours each day in a privateer’s store, the daily labour cost is $288. At $10/hour, the labour costs go up by $72. In this scenario, and looking at labour costs alone, the only way $3 can be passed on to consumers is if they sell merely 24 6-packs each day–and nothing else. That’s clearly just nonsense.

When we add in the loss of the privateers’ discount of 16% to 10%, that 6% will affect final costs too, but not significantly. Even if the $12 6-pack were being sold at cost, the loss of the extra 6% discount would increase the 6-pack by 96 cents. Since the privateers’ mark-up is a whopper, the real final cost increase of the 6% discount reduction is far less.

So how does the privateer industry get a $12 to $15 price jump in their wonky arithmetic? They add 25% to the final product cost. Why 25%?  Because if the minimum wage goes from $8 to $10, that’s a 25% jump. I do enjoy my beer, but honestly, I’m not that stupid. And anyone who thinks it through for just a short time isn’t that stupid either.

I think the industry, the Alliance of Beverage Licensees of B.C., is simply lying with these numbers by suggesting that’s how labour costs factor into retail prices. I also think the neoLiberal Party is promoting the lie to scare beer fans away from the NDP and their plan of cutting back on the corporate welfare program for privateer, profit-gouging liquor vendors. Enough already!

I also think the industry and the neoLiberal Party are expecting people are stumped by grade 9 Math word problems to the point that they’d believe the crazy arithmetic without working through the problem with a pencil and paper.

They must think we’re stupid. Oh right. This is consistent with the neoLiberals’ disdain for the population it governs.

Doing similar math with the burger costs, we find more PR and rhetoric masquerading as arithmetic.

With a 25% increase in minimum wage from $8 to $10, Earl’s and the Cactus Club claim they will pass 18% and 19% of that increase on to their burger consumers. This isn’t as pathetic as the alcohol privateers’ lame arithmetic, but it is also impossible to find plausible. The last time I was at Earl’s they were going to charge me $4 for there to be vegetables on the plate of my entree.

So, we have the BC neoLiberal Party candidates ducking all-candidates meetings, telling people to just “get over” the BC Rail corruption scandal, lying about social service improvements, watching their lead in the polls evaporate to within the margin of error, seeing female voters favour the NDP by a back-breaking margin and the Canucks in the playoffs distracting loyal Liberal voters from all things political.

And now we have the arithmetically-challenged fear-mongering trying to scare beer drinkers into thinking the NDP is going to rip them off.

But in the end, if you buy your BC brew from a government liquor store, the minimum wage increase and the reduced discount for privateer liquor vendors will simply not affect you at all!

So, even though I’m not a BCGEU member, I’ve been a proud member of 3 unions in my life. I feel wonderful buying my beer at government stores because I know the workers are at the very least being paid a living wage and the product costs less than at the privateers’ stores where they have been getting their 16% discount in Campbell’s New Era of corporate welfare for privatized services.

So, do your grade 9 Math word problem above, get your result, keep shopping at public liquor stores, wag your finger at the neoLiberal Party’s desperate fear-mongering, vote NDP and STV with a smile and enjoy a new era for human beings starting on May 13th.

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Stephen Elliott-Buckley

Post-partisan eco-socialist. at Politics, Re-Spun
Stephen Elliott-Buckley is a husband, father, professor, speaker, consultant, former suburban Vancouver high school English and Social Studies teacher who changed careers because the BC Liberal Party has been working hard to ruin public education. He has various English and Political Science degrees and has been writing political, social and economic editorials since November 2002. Stephen is in Twitter, Miro and iTunes, and the email thing, and at his website, dgiVista.org.

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3 thoughts on “Alcohol Privateer Fear-Mongerers, With Flaky Arithmetic”

  1. Generally, I agree with you Stephen. The Liberals increased the discount to the private retailers and not a cent was passed along to the consumer. Most private stores have a poor beer selection and poor service. The only things that distinguish them from government stores are that they have cold beer and longer hours, which doesn’t justify their large markup. Nevertheless, there are plenty of lazy people who cannot plan ahead and will pay more at these stores simply because their light lager is cold and available when they feel like buying it. If a store can run a profitable business servicing this niche, then so be it.

    However, government liquor stores also leave a lot to be desired. They don’t properly store unfiltered, unpasteurized craft beer; most of their staff lack any in-depth knowledge about different beers; their product selection is much less than it could be (and has been); and they don’t carry all products from all BC craft breweries.

    The best beer stores in the city happen to be private stores: Brewery Creek, Viti, and WV Liquor Store. They have the best selection, they store the beer properly, they pay their staff better than minimum wage, their staff is more knowledgeable, they have more convenient hours, and they have mailing lists to let their clients know what new products have come in. For that, I’m willing to pay more.

    This is the added value that private stores should be providing but largely aren’t. Those private stores that are little better than a government store or worse, don’t deserve to be subsidized with a higher discount. It is subsidizing mediocrity.

    That said, most people probably don’t care about selection and service. They just want to go into a store wherever & whenever it’s convenient to them, buy the chilled mass-market lager they always drink, and quickly be on their way. A lack of interest in exploring different beer styles or food pairing means one doesn’t have any questions to ask of staff.

    Rick Green
    B.C. Correspondent, Northwest Brewing News
    President, CAMRA Vancouver
    B.C. Beer Blog | Urban Diner | Twitter

  2. It’s refreshing to hear your comments about workers being treated fairly. And thanks for your indepth analysis of the fear mongering.

    I too question why, even with a 16% discount, private stores charge more (up to 35% more – Consumers Association of Canada study)than public stores and pay their workers less.

    Also, why would we give a $62 million price break to private liquor stores? I guess payback for their donations to the Liberals. Interesting that former Liberal finance minister Gary Collins is with the private liquor groups. I wonder if we will ever hear the whole story about the BC Rail corruption.

    The previous comment about beer expertise has prompted me to tell you about one of my visits to my local public government liquor store. I was talking wine with some very knowledgeable staff. I mentioned a friend who is into beer and they recommended I speak to one of their colleagues who is the beer connoisseur. I appreciated that they enjoy their work and each had a different passion. And yes I did talk to the beer expert and he is passionate about beer.

    I think he and his colleagues could tell Campbell and company a lot about how to run a store – but given Mr. Campbell’s inclination for privatizaton and arrogance towards workers, I think he is not interested in strengthening public services. I’ve seen too many unnecessary cuts and stripping away – and it started during his first term, during the good times of surpluses and he is justifying more cuts now when we still haven’t recovered.

    We definitely need the New Democrats.

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