Liquor Privatization Reduces Operating Cost

Union leaders, copying from the same talking point memo, have repeated an identical falsehood about liquor store privatization.

In two recent letters to the editor, I correct the record of faulty claims by Wendell Young and David Fillman. They allege that a study of liquor privatization shows $1.4 billion in “transition costs”.

But despite their claims, this is not an additional cost for transition. What the report actually suggest that the total cost of PLCB operations would be $1.4 billion during the five years it takes to transition to a private system.

The PLCB operations is currently around $500 million per year. Eliminating the state stores and wholesale operation, would not happen immediately, but during the transition period, annual operating costs would decline from that $500 million to less than $100 million per year (for enforcement and oversight).

That is, without any change, the PLCB’s operating costs would be about $2.4 billion over the next five years. Privatization would save state taxpayers $1 billion in operating costs.

It is disappointing to see union leaders repeatedly distort facts. It is even more disappointing that they are using union dues—collected at taxpayer expense to spread that misinformation.