Thursday, January 25, 2007

Mayor Mandel's logic: liquor privatization=less stores

This is the story

I had to re-read this a couple of times because I could hardly believe what I had read.

Edmonton's own "astute and accomplished businessman" and now Mayor, Stephen Mandel, is lobbying the province to force liquor stores to close by 11PM, and have the City of Edmonton dictate how close competing liquor stores can be located to each other.

Unfortunately, Mayor Mandel gives no reasoning for these strange regulations other than to say, "I just don't think you need to be open later than that (11PM). Buy your liquor on the way home at 5PM."

In Mayor Mandel's world, everyone works 9-5 and private business owners who have plunked down their own hard cash to start these businesses would be better off if they just listened to "astute and accomplished businessman" Stephen Mandel, rather than making rational business decisions based on silly things like profit, market share and customer demand.

However, probably the best part of the article lies in Mandel's completely backwards thinking on liquor privatization.

Mayor Mandel:
"When liquor stores were first offered as an option under privatization, one thought there would have been fewer numbers. But there have been a huge number."

According to Mandel's "astute" business logic, when the government allowed competition in the sale of a popular yet artificially rationed product that was only sold during inconvenient hours in a few select and often inconvenient locations, somehow less stores would open up (giving people less options to buy this obviously popular product).

Yes Stephen, that makes perfect sense! I'm surprised people didn't just stop consuming liquor all together once the government stopped selling it to them.

However, perhaps I'm not reading Mayor Mandel's comments literally enough. Perhaps when he said "one thought there would have been fewer numbers," he literally meant "one" single, solitary person (likely Mandel himself) thought that privatization would lead to less competition and stores, because the other 2.6 million Albertans knew it would lead to more stores, more locations and likely more variety of products sold.

The Alberta government even advertised that fact back in 1993 when they privatized (page 13).

And it has.

And this backwards economic logic is coming from one of the few people with a business background on council. I shudder to think what the ones without are brewing up.

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