Cost of last summer's Manitoba Liquor & Lotteries strike pegged at $10M

A month-long strike at Manitoba Liquor & Lotteries cost the Crown corporation around $10 million last year,CEO Gerry Sul said, but he's optimistic the company willmake up the loss in the currentfiscal year.

Sul anticipates Liquor & Lotteries'financial books will atone for the setback, in part,through a double-digit percentage increase this fiscal year in the sale of drinks such as coolers, hard seltzers and other pre-mixed products. He also credited the warmer-than-usual winterwith giving more Manitobans a thirst for alcohol.

"We expect to see higher volume consumption in the last couple of months, leading into the end of the year," he said in an interview following a legislative committee hearing on Tuesday.

Sulrevealed the estimated cost of the strikeat Tuesday's hearing to discuss thecorporation's report for the 2022-23 fiscal year. Progressive Conservative MLA Konrad Narth, the party's critic for Liquor & Lotteries, posed the questions.

Sul said Liquor &Lotteries calculatedthe $10 million cost estimate by projecting its sales in the absence of thelabour dispute, which included daylong strikes andwalkouts that closed some publicly-operated Liquor Mart locations and impacted the distribution centre.

Sul explained that Liquor & Lotteries also spent around$1.25 million on replacement workers and additional storage requirements during this time, while saving $2.8 million onsalaries and benefits to unionized employees.

Strike had a human cost: CEO

"We all focus on the bottom line," Sul said after the hearing, "but I think it's most important to focus on how it impacted our employees. Again, this was a significant impact to their lives, whether it's financial [or]mental wellness."

The strike occurred while the Progressive Conservatives were governing the province.

The lost sales, however, are only a small fraction of the corporation's overall financial picture, which pulled in nearly $1.65 billion in revenues and a record $740.9 million in profit in 2022-23.

In arguing for higher wages,the Manitoba Government and General Employees' Union, which represents the employees, statedthe corporation could afford the requested pay bump because itwas raking in the profits.

The workers ultimately accepted a four-year contract with wage increases of about 12 per cent or more.

While Liquor & Lotteries is noticing higher sales for what it calls "refreshment beverages" drinkslike coolers, hard seltzersand other pre-mixed products Sul said sales of beer and wine are drying up,extendingatrendhappening in Manitoba and across the country.

Sul said he isn't worried.

In fact, the corporation recordsa higher margin when selling coolers, hard seltzers and the like, which is offsettingthedecline in beer and wine sales, he said.

"If we start to see consumers again straying away from beer or from wine products, then we might start increasing our selectionin the spirits category or in" the coolers, hard seltzers and other pre-mixed products,Sultold the committee.

"We're always looking to monitor and make sure we have the right products on the shelf."

This fiscal year, sales of spirits are relatively flat, the CEO said, though he added that demandfor Canadian and U.S. bourbons is increasing.

199 cannabis stores and counting

Sul said he's also seeing continuedgrowth in recreational cannabis sales, driven by 199 and counting licensed retailers in the province.

The number of cannabis stores sprouting up in Manitoba has started to ease. So far, 22netnew cannabis stores have opened this fiscal year, which is down from the 36retailers that opened the year prior.

Sul also said there's been a downward pressure on cannabis prices, but that's been the result of increased supply from a proliferation of cannabis producers.

Many of the questions the PCs asked of Sul concerned the differences in profitability between public and private liquor retailers, but Sul said it's difficult to draw those conclusions because a number of the private retailers have other lines of business.

Before last fall's election, the Tories tried to pass legislation that would haveallowed alcohol to be sold in a wider variety of places, including privately owned retail stores.