SAQ wine-pricing scheme questionable: auditor's report

The Parti Qubcois is calling on the Liberal-appointed president of the provincial liquor board to resign in light of a critical report from the province's auditor general on a European wine price-fixing scheme.

Quebec Auditor General Raymond Lachance released the report Tuesday, a report that documentsirregularities in the pricingsystem created in 2005 by the Socit des Alcools du Qubec, known as the SAQ.

"They wanted to get some money in their negotiations to get the best [wine] prices in Canada and they wanted to keep some of it for [themselves] also," said Lachance.

The system involved SAQ negotiations with wine suppliers to offset a worsening exchange rate on the euro. In late 2005, the SAQ decided to negotiate directly with suppliers to maintain high wholesale costs, which would have kept retail prices artificially high.

SAQ president Sylvain Toutant was forced to strike down the mechanism following a media storm sparked by report in La Presse in early 2006.

He maintained at the time that the SAQ board of directors was not aware of the change in pricing methods, which Lachance said was reproachable.

Lachance's report estimates Quebecers were forced to pay about $8 million too much for wine as a result of the pricing mechanism.

Reacting to the report,Toutant admitted he did not properly supervise SAQ's wine price negotiations, but said the scandal was an unfortunate bump in the road towards better corporate practices.

He said he would not resign, despite the urging of Parti Qubcois finance critic Francois Legault that he do so.

Quebec Premier Jean Charest defended Toutant at the National Assembly Tuesday and said he has confidence in the SAQ's management.

Two SAQ vice-presidents, Laurent Mriaux and Alain Proteau, were forced to resign in early 2006 during the price scandal.