Cost of privatisation versus government alcohol retailing systems: Canadian example

Drug Alcohol Rev. 2012 Jan;31(1):4-12. doi: 10.1111/j.1465-3362.2010.00276.x.


Introduction and aims: Alcohol retail monopolies have been established in many countries to restrict alcohol availability and thus, minimise alcohol-related harm.The aim of this study was to estimate the impact of the privatisation of alcohol sales on the burden and direct health-care, law enforcement costs and indirect costs (lost productivity due to disability or premature mortality) in Canada.

Design and methods: Simulation modelling. International Guidelines for the Estimation of the Avoidable Costs of Substance Abuse were used. All burden and costs were compared with the baseline taken from the aggregate Cost Study on Substance Abuse in Canada 2002.

Results: If all Canadian provinces and territories were to privatise alcohol sales we assume that consumption would increase from 10% to 20% based on available Canadian literature. Under the 10% scenario the costs would increase from 6% ($828 million) and under the 20% scenario costs would increase 12% ($1.6 billion).This increase is substantially greater than the tax and mark-up revenue gained from increased sales,and represents a net loss.

Discussion and conclusions: Alcohol-attributable burden and associated costs will increase markedly if all Canadian provinces and territories gave up the government alcohol retailing systems.For public health and economic reasons, governments should continue to have a strong role in alcohol retailing.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Alcohol Drinking / economics
  • Alcohol Drinking / epidemiology*
  • Alcohol Drinking / legislation & jurisprudence
  • Alcohol-Related Disorders / economics
  • Alcohol-Related Disorders / epidemiology
  • Alcohol-Related Disorders / prevention & control*
  • Alcoholic Beverages / economics
  • Alcoholic Beverages / supply & distribution*
  • Canada / epidemiology
  • Commerce / legislation & jurisprudence*
  • Computer Simulation
  • Cost of Illness
  • Costs and Cost Analysis
  • Guidelines as Topic
  • Humans
  • Privatization / economics