Alberta Gaming and Liquor Commission
August 12, 2008 11:36 pm
The Alberta Gaming and Liquor Commission (or AGLC) is an agency of the Government of the Canadian province of Alberta, and regulates alcoholic beverage and gambling-related activities. The AGLC was created in 1996 by combining the responsibilities and operations of the Alberta Liquor Control Board (ALCB), Alberta Lotteries, the Alberta Gaming Commission, Alberta Lotteries and Gaming and the Gaming Control Branch. The current Chief Executive Officer (as of 2006) is Norman Peterson.
As of 2006, the Alberta is the only Canadian province to have (re-)enacted completely privatized liquor retailing. All other provinces maintain government ownership and control over much of the liquor industry, especially with respect to distilled spirits. This privatization was carried out in late 1993 and early 1994 under the auspicies of one of the AGLC’s predecessors, the ALCB.
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History
The sale and distribution of beverage alcohol in Alberta had been conducted privately, under licence until 1916 when, during the height of the Prohibition movement, the Liberal government called a plebiscite in which Albertans voted in favour of the Liquor Act, which imposed an outright ban on the sale of alcohol in the province.
As was the case throughout North America, Prohibition proved to be an utter farce in Alberta. However, the United Farmers government that replaced the Liberals in 1921 knew that the still-powerful temperance movement would have to be appeased, so when they called a new plebiscite to repeal Prohibition in 1924 they promised that the sale of alcoholic beverages would be tightly controlled. When the plebiscite passed and Prohibition was repealed, the Liquor Act was replaced by the Liquor Control Act and the Alberta Liquor Control Board was created. The first hotels to be re-licensed were the Palliser Hotel in Calgary and the MacDonald Hotel in Edmonton.
The ALCB would maintain tight control over the Albertan liquor industry for the next seven decades. Hotels that met the strict requirements for a liquor licence had to adhere to draconian rules regarding the décor, cleanliness and aura of the establishment. According to historian David Leonard, the idea was to make drinking establishments as sparse as possible. Patrons were not allowed to stand up with their drinks in hand and entertainment in a licensed beverage room was prohibited. Although women were allowed to drink alongside their male counterparts at first, “mixed” drinking was later blamed for riotous behaviour and in 1928 the Liquor Control Act was amended, so that special rooms had to be put together for “Ladies and Escorts.” In the 1930s the ALCB took it upon themselves to arm hire armed officers to enforce the Liquor Control Act. The Royal Canadian Mounted Police would assume enforcement duties after taking over provincial policing duties from the Alberta Provincial Police in 1932.
Beer off-sales were permitted from hotels starting in 1934, however the sale of wine and hard liquor remained very tightly controlled. As was the case in most Canadian provinces, the only legal way to purchase spirits in Alberta was to travel to a deliberately uninviting ALCB store, where the customer was forced to apply in paper for what they wanted and have it then fetched by a staff member after the customer’s age was carefully checked. The ALCB did not permit individualized packaging for wine or spirits, rather they purchased wine and spirits from the wineries and distillers in bulk barrels and bottled them into stone jars and bottles with the ALCB brand for sale in stores. ALCB stores were few and far between (especially in rural areas), and spirits were frequently watered down prior to bottling.
A Social Credit government would assume office in 1935 and the Socreds would go on to dominate Albertan politics for the next three decades. The socially conservative governments of Premiers William Aberhart and Ernest Manning were slower to relax liquor laws compared to most of their contemporaries in other provinces. In one notable policy, the Social Credit government refused to licence commercial airlines during their tenure and took vigorous steps to ensure that commercial flights were not serving alcohol whilst travelling through Albertan airspace.
The Albertan government and ALCB started loosening some restrictions in the 1950s and 1960s. Clubs and canteens could be licensed from 1950 onwards. In a plebiscite held in 1957, voters in and near Edmonton and Calgary voted overwhelmingly to de-segregate beverage rooms, however men and women would not be allowed to drink together province-wide until 1967. Having repealed the requirement for customer signatures on counter slips to purchase alcohol in 1965, in 1969 the ALCB opened its first self-serve liquor store in Edmonton. By 1970 the ALCB was no longer bottling products.
The Progressive Conservative government that replaced the Socreds in 1971 moved to loosen restrictions further, lowering the drinking age from 21 to 18 after taking office. Although some Albertan MLA’s since then have mooted raising the drinking age back to 19 to match the laws of neighbouring British Columbia and Saskatchewan, the lower drinking age remains in effect as of 2007. Responsibility for domestic beer warehousing was transferred to the Alberta Brewers’ Agents Limited in 1973.
The 1980s would see restrictions relaxed further, with the first wine stores licensed in 1985 and the first hotel-based cold beer stores approved in 1988. In 1990 hotel off-sales expanded from beer only to beer, wine and spirits.
Privatization
The complete privatization of Albertan liquor retailing following former Calgary mayor Ralph Klein’s assumption of the premiership in 1992 is the most notable event in the ALCB’s history, and for many Canadians it is also the most controversial event in the recent history of alcoholic beverage distribution in Canada. Klein promised Albertan voters the liquor industry would be privatized if he was elected in the 1993 election. After he won the election, the Klein government carried out the privatization almost immediately.
Under Municipal Affairs Minister Steve West, privatization was carried out in a strictly business-like manner. [1] The 202 ALCB liquor stores were systematically sold off. Where private interests believed an existing ALCB store could be profitably operated as a privately owned liquor store, the store continued to operate under new ownership. Liquor stores that were not economically viable in the private sector were closed down with the properties sold to the highest bidder. Between September 4, 1993 and March 5, 1994, every ALCB store was either sold or shut down. With respect to the ALCB stores that were converted to private liquor stores, the Alberta Union of Provincial Employees was denied successor rights to the private stores. Whereas all non-management ALCB employees in 1993 belonged to the AUPE, as of 2006 no priavtely-owned liquor store is known to have become unionized except for those owned and operated by Loblaws under the Great Canadian Liquor Store and those owned and operated by Safeway in conjunction with a Safeway Grocery Store.
The ALCB initially retained warehousing and distribution responsibilities for wine, coolers, imported beer and spirits. The warehousing operation was contracted out to a private operator, Connect Logistics in June 1994. Connect Logistics leased the ALCB’s existing warehouse in St. Albert and continues to warehouse all wine, coolers, imported beer and spirits legally sold in Alberta as of 2006. The AUPE was again denied successor rights to the Connect Logistics-operated warehouse and the warehouse thus became a non-union operation.
Privatization was controversial, attracting criticism from people who worried about the social costs of liquor privatization. However, all available evidence indicates that privatization has had no social consequences in Alberta. In the end, the fiercest sustained opposition came from organized labour who were upset about the sudden loss of thousands of unionized public sector jobs.
It is worth noting that ALCB workers had gone on strike earlier in 1993 and caused an interruption in service at Albertan liquor stores. Compared to other Canadians, Albertans are generally seen as less friendly to unions and many Albertans were disappointed by what they interpreted as the union’s lack of concern for Albertans’ social lives (the strike over the Victoria Day weekend). Some Alberta labour leaders continue to view the privatization as a retaliation against a legal strike. It is still debated whether this strike directly influenced the Tories’ election promise and subsequent decision to privatize liquor store, or influenced some Albertans to vote for Klein as a result.
The AGLC today
Privatization remains controversial in 2007, with complaints and then legal action now coming from liquor retailers who say the Connect Logistics-run monopoly is failing them. Retailers are supposed to receive orders within 48 hours of placing them, but they are complaining that some orders have been arriving more than a week late. The result is empty shelves especially in the smaller retailers as they cannot afford large inventories. The tight Albertan labour market may be a factor (truck drivers are in especially short supply as of 2006); however at least one spokesman for the private liquor industry said the problems may deter other provinces from adopting the Albertan model. [2] The AGLC asked its distributor to fix the problem by September 30, 2006. The deadline has now been pushed back to January 15, 2007. [3]
Further deregulating the wholesale of liquor in Alberta, in such more than one distributor would be allowed to operate, has been proposed as a solution to the distribution bottleneck.
In July 2007 the AGLC approved a request by Connect Logistics to re-structure its wholesale pricing system. The distributor says that once implemented, prices for product sold by the pallet will be modestly lower while prices for product sold by the case will be modestly higher (essentially, retailers will be able to claim quantity discounts for large orders). While representatives for Connect Logistics claim that such a system will better represent the actual handling costs of each order, some managers of smaller stores are lamenting that the system will work to the advantage of larger operators. [4]
Following the succession of Ed Stelmach to the premiership, the AGLC became involved in further controversy when it told the Canadian Restaurant and Foodservices Association that it would extend a policy allowing underage musicians to play in Albertan bars so as to allow minors who are at least 16 years of age to work in the kitchens of bars. [5] This drew predictable anger from the Alberta Federation of Labour, who claimed that the AGLC was planning to allow minors as young as 12 to work in bar kitchens. The AGLC then flip flopped and cancelled the entire program, meaning underage musicians will no longer be allowed to play in Albertan establishments. This in turn drew predictable anger from the Albertan music industry, since there are few other viable venues in abundance for these artists. [6]
Although Alberta has deregulated its retail liquor industry to a greater extent compared to any other province, its Connect Logistics-administered monopoly on the wholesaling of wine and distilled spirits is comparable to the systems in U.S. alcoholic beverage control states such as Michigan. This means that by U.S. standards, Alberta would still be defined as a “control” jurisdicition.
Organization and Mandate
The AGLC consists of a Board and a Corporation. The Corporation acts as the operational arm of the organization, while the Board is responsible for reflecting the government’s direction through policy and regulatory matters.
Although liquor is retailed in Alberta by private interests on a competitive basis, like its predecessor the AGLC has maintained a monopoly over the wholesaling of wine, coolers, imported beer and spirits. The AGLC, technically speaking, continues to be the purchaser of these products and thus Albertan liquor taxes (which are still relatively high compared to taxes in the U.S.) are technically termed the AGLC liquor markup. The wholesaling operation itself is mostly handled by Connect Logistics who continue to be based in St. Albert. Maintaining a monopoly over the wholesale business allows the AGLC to maintain tighter controls over liquor distribution than a more competitive system would allow, in particular it allows the AGLC to ensure that it does not miss out on any of its “markups” (the bulk of the liquor tax in any Canadian province, including Alberta is the provincial liquor markup).
On May 25, 1999 the AGLC became part of the Ministry of Gaming, which is headed by a minister who is a member of the Albertan Cabinet. The current minister (as of May 2006) is Gord Graydon. The policies of the Minister and his staff are carried out by the AGLC.
External links
- Alberta Gaming and Liquor Commission