SAQ would make more money for taxpayers if it was better run, study suggests

Productivity at Quebec's government-run liquor board has remained stagnant over the past three decades, leading to lower profitsthan would otherwise have been possible, a new study suggests.

Robert Gagn, a professor at HEC Montral and one of the authors of the study, said the Quebec government hasnot benefited as much as it could have from retail alcohol sales.

"By neglecting the importance of efficiency at the SAQ, the government has foregone potential additional income, or else it has forced consumers to pay more for their alcohol," Gagnsaid in a statement.

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The study found that the SAQ's rapid expansion in the late 1990s hindered its productivity for years, with the Crown corporation unable to manage the rapid growth in the number of outlets.

In the end, although "expansion considerably boosted SAQ sales, it was at the expense of efficiency," the study found.

Gagn said Quebec would benefit from closer oversight of the SAQ's operations, which would lead to either "lower prices for consumers or higher dividends for the government."

The SAQ recorded a profit of $1.1 billion in 2015-2016.

In 2005, Gagn was part of a budgetary review panelthat recommended an end to the liquor board's monopoly on wine and spirit sales.

Currently, bottles of wine that cost between $10 and $20 in Ontario are about $1 to $2 more expensive in Quebec.

50-cent price drop

The SAQ issued a newsrelease on Monday in response to the study, saying the agency hasbeen making efforts to improve efficiency and productivity since 2006. Itsaid that those efforts have paid off the most in the last two years.

"The gains in efficiency have already allowed us to put in place concrete measures to benefit customers,"the liquor board said.

Recently, the SAQ cut the price of 1,600 wines by 50 cents, saying that the price drop was due toincreased efficiencyand that itwill continue to review pricing.

It said efficiency and productivity initiatives should result in savings of approximately $30 million inthe current fiscal year.