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Laurie in Question Period

Warehousing of Liquor Products

Ms Blakeman: Thank you, Mr. Speaker. Connect Logistics is the monopoly contractor of liquor warehousing for the AGLC, and small volume importers and boutique wine shops are getting the short end of this deal. The total warehousing costs in Alberta are almost quadruple those in B.C., at $2.27 per case all in versus just 59 cents in British Columbia. My questions are to the Solicitor General, responsible for the AGLC. Why is the Alberta government allowing Connect Logistics to charge so much more for the same basket of services?

The Speaker: The hon. Solicitor General.

Mr. Lindsay: Well, thank you, Mr. Speaker. In regard to Connect Logistics and the warehousing of the liquor products in Alberta I’m not sure what formula they use out in British Columbia, but I know that in Alberta we use an averaging formula so that all of the retail stores across the province receive their product at the same price. That could explain the difference.

Ms Blakeman: No. It was a comparison across.

My second question to the same minister: given that these liquor agents have no alternative supplier in this government approved monopoly and they have no ability to get compensation from Connect for late deliveries, misordered product, losing inventory in the warehouse, shipping out newer stock before older stock, how is there any incentive for Connect to improve their services?

Mr. Lindsay: Mr. Speaker, again, it would appear that the hon. member is living in the past. We certainly did have a problem with delivery going back a year ago, but we restructured that contract, so that’s the incentive for Connect Logistics to deliver products on time, and they are.

The Speaker: The hon. Member for Edmonton Centre.

Ms Blakeman: Thank you. My final supplemental to the same minister: why does the department allow Connect to continue using the activity based costing system, which targets and penalizes our small importers and specialized boutiques?

Mr. Lindsay: Mr. Speaker, again, we restructured the contract with Connect Logistics. Activity based pricing is based on a formula that any free enterprise system would use: the cost to bring a product in, the cost to sort, and the cost to get it out. It’s as simple as that.