Liquor agency lowering expectations after missing targets

Teresa Wright
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Joan Blacquiere, left, acting senior clerk, and Crystal Pineau, senior clerk, at the Oak Tree liquor store in Charlottetown.

The P.E.I. Liquor Commission turned only a small profit last year and did not hit its budget targets, a reality now forcing the commission to lower its expectations for the coming year.

The liquor commission did post a 16th consecutive year of profit in the 2013 fiscal year, with gross liquor sales of more than $97 million.

CLICK HERE FOR NUMBERS OF LIQUOR SALES IN 2013

But this fell short of its goal of $102 million for the year, the second consecutive year the commission failed to meet its budget targets.

Jamie MacLeod, director of corporate services for the P.E.I. Liquor Control Commission, said part of this loss came from an expectation Islanders would buy more expensive alcohol.

“We had hoped to make more significant gains in our customers trading up to more expensive products but our target within that area wasn’t achieved, so maybe we were a little bit too aggressive in our expectations in that regard,” MacLeod said.

This, paired with a poor economic climate as well as continuing issues like out-migration, has led the commission to realize it must lower its anticipated revenues in future budgets.

“The upward trends are not there as they were in past years,” MacLeod said.

“I think it’s reasonable to think that in future, we’ll probably be less aggressive and we’ll be targeting more along the line of what it was previous years in terms of an increase over the previous year.”

Last year was the first full year for six new agency stores in P.E.I., operated out of privately owned convenience stores and gas stations.

These agency stores were a success for the commission, MacLeod said, accounting for a 10 per cent increase in new volumes of alcohol sold. But their success came at the expense of some of the provincial retail outlets.

The North Rustico liquor store, which feared losing business to the new agency store in Cavendish, ended 2013 at a loss of $80,721 in gross receipts. The West Royalty location also posted a loss of $129,820.

Even the commission’s flagship store in Charlottetown lost money, posting a loss of over $318,000 in 2013.

MacLeod said these losses were a direct result of the opening of the new agency locations. Not only are some of them closer to outlying communities, but they also can remain open for later hours and on more holidays than provincial stores.

Despite these losses, the provincial retail stores will remain open and jobs will remain secure, thanks to a five-year contract recently ratified between government and the civil service union guaranteeing no layoffs until 2016.

“We’re continuing to look at the agency model as a future growth opportunity, but that’s something that we would need to consult with our minister and in turn government through cabinet to see if they’d like to continue with the agency model or any kind of expansion of the current portfolio,” MacLeod said.

Organizations: P.E.I. Liquor Control Commission

Geographic location: Cavendish, West Royalty, Charlottetown

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Recent comments

  • don
    January 16, 2014 - 04:51

    profit of $97 million where did that money go wes? 97 million in drunks how much of that went to the drunk that murdered the lady from out west? blood money. the government should be made to post pictures of everyone that has been killed or seriously hurt due to drunks and post them in every booze store on PEI.

  • Dave Turner
    January 14, 2014 - 15:45

    Did the PEI Liquor Corp ever think that THEIR profits are down because of the new locations in private retail shops . Just take a look at Mels. They are busier that ant Tim Hortons on a 8am Monday morning .

    • Stan Hope
      January 16, 2014 - 10:16

      Dave did you read the the story or just shoot from the hip.Read the piece again , down to the part where "Macleod said ..."

  • Observer
    January 14, 2014 - 12:31

    Well I guess they have to charge more to pay for the very expensive refurbishing of the main office and for the salaries of the official wine and beer tasters!

  • Profit or Prophet
    January 14, 2014 - 10:50

    Why would a crown corporation or government agency need to make a profit? How about just break even, so the cost to the taxpayer is zero? And what happens to the profit? They throw a party for the staff, open bar included?

  • Poor Business Plan
    January 14, 2014 - 10:43

    Pretty confident the amount of alcohol being sold is not decreasing. Perhaps its the fact that the gov't sourced selling out in smaller communities. Either way - ridiculous wages for what is basically a cashier/shelf stocker. $20/hr is nuts for the training and skills needed for that kind of job. The job itself is a minimum wage job. They should only need to layer in another 3 or 4 dollars an hour maximum to keep things on the up and up. But doubling minimum wage? C'mon Man!

  • David
    January 14, 2014 - 10:29

    Maybe if they actually kept the shelves stocked they would have met their expectations. I can recall many times going to different liquor stores and the shelves being empty and not empty for just a couple days but for weeks on end of certain items. When I would ask about when they might be getting more again the answer was the same "our truck comes in on Friday". Problem is the famous truck would not come for weeks on end. Really hard to sell products if you don't keep them in the store. Maybe the Liquor Commission should hire some people who know how to run a retail store.

  • JAC
    January 14, 2014 - 08:03

    There was no declining in sales, they exceeded the previous year's sales for the 16th year in a row! PEILCC just didn't meet their expected sales. The close proximity to schools and at gas stations is increasing sales of cheap liquor to kids, not their higher end products. Consumption of alcohol on PEI continues to climb, and it isn't the tourists doing all the drinking. PEI LCC needs to come under a different department then tourism.

  • Mad as Hell
    January 14, 2014 - 05:07

    I was just in Quebec... where you can buy a case of 30 cans of beer for $31.00

  • Grapefruit
    January 13, 2014 - 20:56

    It is obvious that the residents of P.E.I. can't afford to buy as much liquor as in the past.I am talking volumes. The Government has put in place the HST, increased all licensing fees,no break on the income tax allowance, and wasred millions of tax dollars, so why wouldn't liquor sales decrease. Also the LCC had three price increases on beer , anybody who knows anything about economics would know that volumes who fall. Time for privatization of this dinosaur.

  • UPWESTER
    January 13, 2014 - 20:51

    I guess people are telling Brooks MacMillan that his prices are too high. Instead of trying to sell their really over priced liquor like that Island potato vodka, which is higher priced than the highest priced premium brands, they should concentrate on reducing the price of beer,liquor and wine. They have some of the highest prices in the country. Political appointments of people who have no idea how to run a business doesn't help either. If you can't make a decent profit selling booze, something is drastically wrong. I would be looking at top management if they missed their target two years in a row.

  • Well now
    January 13, 2014 - 17:14

    Many times the last year or so we have gone to get things & the shelves were empty. Sometimes it takes a couple of months to get in a restock of what was sold out. Ask when it will be restocked - answer is always Friday - week after week after week - Friday yet never restocked, for ages. So we don't buy something else other than what we want. We just leave. Sales lost.

  • Bill
    January 13, 2014 - 16:06

    This must be a huge disappointment for Addictions PEI, seeing as they continue cutting services to addictions treatment in our province. They cut beds at the main addiction treatment facility in PEI, cut addiction help in many small cities and towns in the island, and then; they have the audacity to complain in our main provincial publication about losing money due to decreased liquor sales. I am willing to bet money that liquor sales in Northern Alberta are well above expected levels.

  • EL Douglas
    January 13, 2014 - 13:52

    The simple fact is that despite high sales, all products are over priced. The HST is one of many reasons of declining revenue. Some will argue that high prices lower consumption (I would agree). Some others would argue that we do not need lower prices, with increased consumption ( I would disagree). Example: 1.75L spirits in US liquor store is approximately $22.00 The same spirits on PEI are $63.00 Thus there is something drastically wrong if the P.E.I. Liquor Commission turned only a small profit last year on gross liquor sales of more than $97 million.

  • bens
    January 13, 2014 - 12:14

    the lack of some brands which can be purchased off island must be part of the problem, don't you think????

  • Crazy World
    January 13, 2014 - 11:39

    Strange world we live in when we have such a high addiction rate on PEI are we are disappointed when liquor sales targets are not met. Should the target be to lower sales?

  • Walt
    January 13, 2014 - 10:39

    The writing in this article could be clearer or the information provided by the Commission needs to be better. Are the provincial stores experiencing operating losses or are the gross sales declining. A store can have its sales decline and still generate a profit.