Manitoba paid $3.4M for U.S. booze currently in storage

Winnipeg Free Press

3 days ago

The Manitoba government is sitting on millions of dollars worth of American booze it paid for then refused to sell after the U.S. threatened to launch a trade war on Canada.
Manitoba Liquor and Lotteries Corp. said the price it paid for the U.S. booze, the 'duty paid landed cost,' is $3.4 million. It couldn't provide its retail value but pointed to the MLLC 2023-24 annual report that noted the gross profit margin for liquor products was 52 per cent that fiscal year.
Premier Wab Kinew announced Feb. 2 that Manitoba Liquor Marts would pull U.S. products from store shelves after U.S. President Donald Trump threatened to impose crippling tariffs on Canadian imports.
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The Manitoba government is sitting on millions of dollars worth of American booze it paid for then refused to sell after the U.S. threatened to launch a trade war on Canada.
FREE PRESS FILES
Manitoba's Crown liquor retailer also halted orders of American products, which Kinew said would take an $80-million bite annually out of the U.S. economy.
The ban on products made in the U.S. included 409 spirits, 341 wines as well as beers and other tipples bought and paid for by the publicly owned corporation.
'The retail value of that $3.4 million must be several times that if you include the massive markups that the government adds to it plus the taxes,' said Markus Buchart, a former provincial economist who filed freedom of information requests in March. 'Its retail value is probably $10 million or more.'
Liquor and Lotteries estimated the costs associated with the removal of American products from Liquor Mart shelves during February and March — overtime costs, additional labour costs and lost revenue from marketing programs — are estimated at $70,099.12. It said it is utilizing existing warehouse space to store the affected products.
Stopping the purchase of U.S. products would have an effect on American producers, but storing products that were already paid for hurts the Crown corporation through lost sales and the province through lost tax revenue, Buchart said.
'Its retail value is probably $10 million or more.'–Markus Buchart
'That got me wondering, how much existing stock is there? What if this trade war goes on for years, which it could. What are they going to do with it? It must use a lot of space and some of it will spoil, probably, or be broken,' said the former economist who worked for Manitoba Finance in the 1980s and '90s.
The ongoing costs associated with the removal of U.S. liquor products will depend on the length of time these products remain unavailable for sale, the Crown corporation said in response to the freedom of information request. It did not immediately respond to a request for comment Tuesday regarding how long it expects to store the U.S. booze.
'These products have a very long shelf life,' a Liquor Marts spokesperson said in an April 3 email to the Free Press. 'The situation with the U.S. is changing on a daily basis, and we remain very active in business planning with regards to these products in the event the trade dispute continues long term.'
The minister responsible for Manitoba Liquor and Lotteries Corp., Glen Simard, was not available for an interview Tuesday but issued a statement.
'The Trump administration has threatened jobs at the Selkirk steel mill and ag producers in Brandon with tariffs. As a government, we are standing up by taking $80 million out of the American economy by taking their liquor off the shelves. There are plenty of great Manitoban breweries and distilleries to support instead,' the MLA for Brandon East said in an email.
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Buchart said ordering Liquor Marts to stop selling U.S. booze reminded him of the 1980s boycott on the apartheid regime of South Africa. The Manitoba government, under premier Howard Pawley, banned the sale of South African wine and spirits.
In 1986, it decided to sell off its remaining stock of South African booze, and donated the proceeds to the Manitoba Coalition of Organizations Against Apartheid.
'They didn't store it; they got rid of it,' Buchart said.
— with files from Kelly Taylor
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Carol SandersLegislature reporter
Carol Sanders is a reporter at the Free Press legislature bureau. The former general assignment reporter and copy editor joined the paper in 1997. Read more about Carol.
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