The Société des Alcools du Québec (SAQ) is a government-owned crown corporation that has a monopoly on alcohol sales in Quebec. Created to moderate the push for national prohibition (which was hugely unpopular in Quebec) in 1921, it has since become a cash cow, just as is the case with such other government crown corporations as Hydro-Québec (electricity) and Loto-Québec (lotteries).

And as is the case in other provinces, SAQ uses its monopoly powers to the fullest extent, harming the customers’ wallet.
Recently, Yves Mailloux, a Quebec wine critic, estimated that only 1% of all wines sold by SAQ (approximately 8,000 products) cost less than $10. This is less than half (2.2%) the number in 2009.

“No other industry voluntarily limits its cheap products,” he claimed. He added that in comparison in France 75% of wines cost under $4 CDN.

The SAQ has recognized that it has few inexpensive wines, but puts the blame on an increase in the alcohol tax last fall, and also on successive increases in the Quebec sales tax from 7.5% to 9.975%.

However, the SAQ has a tough time admitting the other reason why wines are so expensive – the inflated wages and benefits of its workers. While the minimum wage in Quebec is now $10.15, an SAQ cashier will earn an average of $24.81 an hour, and assistant manager, $29.41.

Unbelievably, SAQ is in the process of introducing a customer loyalty program, under which repeat customers will receive points or rewards for their loyal business. The program, to be implemented in 2015, makes little sense and will undoubtedly drive prices up further. Competing only with corner stores and their limited selection, SAQ is a monopoly provider. If you want to buy wine in Quebec, and want significant selection, you have no option other than to buy from SAQ. As Pierre-Yves McSween, a professor and chartered account, pointed out, loyalty programs always come with a cost, usually at the expense of other customers.

There is little justification for the Quebec government to be operating a liquor sales monopoly, and even less justification for starting a loyalty program for a monopoly provider. The days of prohibition are long gone and all of the arguments around government revenues or social responsibility have been settled.

The SAQ is a relic of the past and a disservice to the citizens of Quebec.