In a way this is not my business. I am an Albertan living under a privatized liquor retail system who only visits Ontario once every year or two. Yet, I feel compelled to weigh in on the growing tire fire that is Ontario’s ham fisted efforts to privatize their liquor retail. The ongoing strike of LCBO employees is spotlighting the utter incompetence of the Ford government’s efforts on this file. And so here I go.

I begin with a couple of truisms. First, the LCBO is a bloated, overly-conservative, excessively anti-trade institution that has longed screamed for reform. And don’t get me started on the private gangster operation that is the Beer Store. Second, the slow roll out over the past decade of beer and wine sales in grocery stores and stand alone outlets (LCBO Express) has largely been a success (although some large caveats around that which I might get into). Third, as a result of all of this, Ontario has a very closed market for beer, in particular beer produced outside its borders.

Now to the hub of my argument. Doug Ford is making an utter mess of this policy, and through his haste and rash moves has created a strike that he can’t win. Now this will come as no surprise to anyone who follows beer policy. From buck-a-beer to ripping up the Master Framework Agreement (MFA) to almost $1 billion in handouts to the multinationals who own the Beer Store for fast-tracking privatization, it is clear his actions around beer have not been well thought out.

I will leave the details of Ontario’s retail system, the MFA and other beer finance minutiae to my smart-as-a-whip friend Jordan St. John (see here for an example), as he knows this file better than I do. But there are things I do know, in particular because I am an Albertan who has experienced retail privatization.

First, privatization does not make things better for consumers. It is a siren song. Sure, you can buy beer in more places and even pick up a four/six-pack when getting your weekly groceries. Cool! But there are two things you don’t immediately notice as you pick up your Steam Whistle Pilsener or Amsterdam Boneshaker (if you are in Ontario). First, the price is higher. There has been a lot of research that shows that privatization increases liquor prices overall (see here and here). Second, you are missing out on smaller, local breweries. Privatized outlets are good for larger breweries with a capacity to achieve regional or cross-provincial distribution. And that is usually only because governments (like Ontario) mandate a certain percentage of local product. In public retail, there is often a mandate to carry local product in the region’s stores, even if it doesn’t get province-wide distribution.

Second, moving fast on privatization only benefits friends and cronies of the government and those who have curried favour with the government. Back in the 1990s when Alberta first privatized, the first wave of private stores (who purchased previously public stores at fire sale prices), were people with influence with the government. It did not create a free market; it created cronyism. This has since changed in Alberta, as new players entered and created a competitive market (sort of – it is still dominated by a handful of large chains). Alberta’s more recent foray into beer in convenience stores has benefited one company and one company only – 7-11. No one else has seen the business-sense in doing it.

Third, privatization devalues liquor retail jobs. In Alberta, liquor retail went from a decent job where you could feed your family and build a modest career into a dead-end, minimum wage McJob. Either that or become one of the hundreds of small mom-and-pop shops employing relatives and eking out the smallest of margins.

I get why LCBO workers are striking right now. This is the last moment where they can have any bargaining leverage over what happens. They are doing an excellent job of linking their dispute to Ford’s rush to expand private retail, connecting his actions to padding the pockets of grocery and convenience store chain owners and to depleting the public purse that pays for important services. This ad is an example.

I don’t really buy the union’s arguments about safety and responsible consumption – Alberta has been just fine on those metrics since privatization. But their core point is WHY? Why blow up the whole system in this fashion? Ford doesn’t seem to have a grand plan – he just wants cheap beer sold everywhere. That is not the basis for solid policy. And the LCBO workers have a good point.

Ontario needs liquor reform, no question. But this haphazard approach is going to create chaos. Grocery stores aren’t particularly interested in going deeper into alcohol sales, as margins aren’t great in that category. Alberta’s experience is that very few convenience stores will buy in, again because the margins aren’t good and the hassle is significant. So what is the point? I have no idea. And if I have no idea, then likely most Ontarians have no idea. Which doesn’t bode well for Premier Ford.

OPSEU’s strike might be a defensive one – trying to stop something bad from happening – but it has the potential to tap into a broader anger about government policies designed to help corporations and friends of the government over average people. And if they do that, Doug Ford has a big problem. One that can’t be solved by speeding up availability of ready-to-drinks in your local Loblaws.