© Guardian photo by Heather Taweel
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.
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.