Liquor decision a significant hit to Saskatchewan businesses, economy
November 24, 2016
The Nov. 23 liquor retailing announcement by the Government of Saskatchewan will send more than $120 million in liquor revenue out of Saskatchewan to the three vendors that were awarded locations in major markets.
“We are astounded by yesterday’s announcement,” said Vic Huard, Executive Vice-President Strategy at Federated Co-operatives Limited. “While local co-ops in small markets are grateful for the permits that were awarded, there is also sincere disappointment that a significant competitive advantage in both the liquor and food business was given to a direct competitor in larger markets that will be taking a large portion of the potential revenue out of Saskatchewan.”
Missed opportunity for Saskatchewan businesses
Local co-op associations bid on 30 out of the 50 possible permits and were awarded 14 liquor permits in rural Saskatchewan, while Sobeys was awarded nine urban locations and the three other urban locations were awarded to two out-of-province corporations. In doing so, the SLGA has ensured that more than $120 million in liquor sales revenue will flow out of the province when there was an opportunity, through Co-op, to keep some of that revenue in Saskatchewan.
To put yesterday’s decision in perspective, just one of the locations awarded in Saskatoon is projected to earn more revenue than the combined total of the 14 stores awarded to retail co-ops in smaller rural locations.
“Co-op has established itself as a high-quality liquor retailer in Saskatchewan and was trusted to play an important role in the initial steps taken toward privatizing liquor retailing in the first term of this Government. The store that Saskatoon Co-op established in the Blairmore neighborhood is often cited as a model of how liquor stores can be privatized in this province, especially in our cities,” said Huard. “To go from that state to the news yesterday that co-ops would not be able to establish any liquor stores in urban centres was more than surprising.”
“We were shocked to see how one-sided yesterday’s decision was since we know that the Premier and the Government have regularly spoken about supporting companies headquartered in Saskatchewan through their Priority Saskatchewan and head office strategies,” added Huard.
“In Federated Co-operatives Limited, we have by revenue the largest business headquartered in Saskatchewan. We support a retailing system that includes 20 of the top 100 businesses in the province and employs 9,700 people in more than 250 Saskatchewan communities. The profits and capital investments from FCL and all of those retail co-ops stay right here in Saskatchewan. We are proud corporate citizens and sponsors of programs in communities across this province. Those facts were clearly not considered in yesterday’s decision.”
Experience in liquor retailing
Though private liquor retailing is relatively new to Saskatchewan, the Co-operative Retailing System (CRS) of more than 200 co-ops across Western Canada already operates more than 100 liquor operations across Western Canada. This includes 33 franchise stores and one private store already operated by co-ops in Saskatchewan.
- BACKGROUNDER: Co-op in Saskatchewan
For more information:
Communications and Public Relations Manager
Federated Co-operatives Limited