Our governments are addicted to alcohol

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Alcohol is one of the five most addictive substances according to many studies. Other drugs that are often on the inglorious list are heroin, cocaine, nicotine and barbiturates.

Of course, both heroin and cocaine are illegal in Canada. Barbiturates are a controlled substance. And products containing nicotine are highly regulated. Cigarette companies are prohibited from advertising their products or sponsoring cultural events.

However, alcohol is fully standardized. And despite mountains of evidence why drinking is a bad habit (heavy drinkers are more likely to die of heart disease, cancer, cirrhosis of the liver), government-controlled monopolies like the Liquor Control Board of Ontario (LCBO) and the Société des alcools. du Québec (SAQ) encourage us to consume more using various marketing tactics.

Alcohol abuse is a major problem in Canada. According to surveys conducted by Statistics Canada, 15.6% of the country’s population aged 12 and over self-declared “heavy drinkers” (males who reported consuming five or more drinks, or females who reported having drank four or more drinks, on one occasion). , at least once a month during the past year).

Also, according to a report recently released by the Canadian Center on Substance Use and Addiction (CCSA), in 2017, alcohol contributed to 18,000 deaths in Canada. That same year, the costs associated with alcohol use in Canada were $16.6 billion, with $5.4 billion of that amount going to health care.

A recent Statistics Canada study suggests the problem may have gotten worse recently, with nearly 25 percent of Canadians saying they thought their drinking had increased because of the pandemic.

As we all know, alcohol (except beer) is mostly sold by provincial Crown corporations like the LCBO and the SAQ. While it is debatable whether governments should have kept the distribution and sale of alcoholic beverages in their hands, one thing is clear: when it comes to alcohol, it is not only the consumption that creates addiction, but also the income generated by their sales.

In 2021, the LCBO paid a dividend of $2.55 billion to the Ontario government, equivalent to 1.4 per cent of the province’s annual budget. SAQ paid $1.22 billion to the Quebec government, which represents one percent of its annual revenue.

These great benefits make them hard to resist, but also complicated.

On the one hand, you have government-controlled monopolies, managed and governed primarily by entrepreneurs with retail and marketing experience. By nature, these professionals are constantly looking to increase the benefits that are paid in full to the councils that depend on them as part of their budgets.

But, unfortunately, alcohol consumption has its downside. Beyond the personal tragedies for individuals and their families, excessive alcohol consumption also imposes an enormous cost on the nation’s health care system. According to one estimate, alcoholism costs Canadians up to $15 billion a year. This means that the billions of dollars in dividends generated by the sale of alcohol are effectively used by governments to treat those injured by alcohol abuse. A bit absurd.

Much wine has been consumed since 1927, when Prohibition ended and the LCBO was established. According to an article published today on TVO, at the time, the stores “were designed to make the experience of buying alcohol as embarrassing as possible” and “LCBO officials believed that superior customer service was not reflected in the volume of sales but in the prevalence of good social conditions in the surrounding community and the absence of drunkenness”.

But today, the LCBO is a marketing partner of Air Canada, and you can earn extra Aeroplan points when you buy wine and spirits. And SAQ has its own loyalty program, Inspire, with 1.9 million members that can be directly targeted. According to SAQ spokeswoman Linda Bouchard, the annual cost of the program was $3.7 million in 2021.

Although small compared to other retailers, the LCBO and SAQ still have significant amounts of marketing and advertising efforts. For example, for the 2021-22 fiscal year, SAQ spent $7.13 million on “advertising and promotions.”

LCBO spent $2.36 million in the most recent year on advertising and promotional items. However, that figure represents “net expenses,” and an emailed statement from the LCBO press office confirmed that the advertising is “paid for largely by suppliers.” Therefore, the actual advertising budget is significantly higher.

Asked how the SAQ’s marketing efforts can be justified given the known harms of alcohol, spokesman Bouchard said the Crown corporation is “very sensitive” to the issue and promotes in its advertisements “a responsible consumption… where good practices are proposed (glasses not too full, limited number of bottles on the table, etc.).

The LCBO press office wrote that “as part of our commitment to safe and informed consumption, we advocate for responsible retail practices and foster a culture of moderation to help Ontarians make responsible choices for their health and well-being”.

As for the LCBO-Aeroplan partnership, the press office declined to disclose any financial details, writing that “customers are not necessarily buying more products, but are encouraged to try new products.”

However, a quick browse of the LCBO website shows that customers who purchase a full case (12 bottles) of new vintage arrivals currently receive 1,000 bonus Aeroplan points.

Wine and spirits are a legal product and consuming them in moderation could be fun. Just like cigarettes and cannabis, we all know where to find them. However, encouraging consumers to consume more alcohol is wrong practice. This is especially true given Canada’s new low-risk drinking guidelines that the CCSA will officially launch in January 2023. The new guidelines recommend avoiding alcohol altogether or consuming no more than two drinks per week.

Alcohol is not much different than tobacco and should have similar regulations and standards regarding its marketing and advertising practices. Alcohol revenue paying for healthcare costs makes no sense.

Amir Barnea is an associate professor of finance at HEC Montréal and a freelance columnist for the Star. Follow him on Twitter: @abarnea1TO SHARE:

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