The Privatization of Wine Sales in Quebec in 1978 and 1983 to 1984

Abstract

In 1978, grocery stores in Quebec were allowed to sell domestically produced wine along with wine that was imported and bottled by the Liquor Board in Quebec. This right was extended in 1983 to include imported wine that was bottled by privately owned manufacturers in Quebec. Larger grocery store chains were also allowed to sell wine in 1984. The aim of this study was to evaluate the effects of these policy changes on alcohol sales, primarily on sales of wine and total sales but also on sales of spirits and beer. Interrupted time-series analysis (ARIMA) with a quasi-experimental control area design was used. Canada, with the exception of the province of Quebec, was the control area. All time series were differenced to remove long-term trends. Possible permanent effects of the policy changes on alcohol sales were measured by means of intervention variables. Alcohol sales, in liters of pure alcohol per inhabitant aged 15 and above, were used as the dependent variable. Alcohol prices and the inhabitants' disposable income were used as control variables. Contrary to earlier studies regarding these policy changes in Quebec, the results presented in this study showed a significant and permanent effect of the policy change in 1978. The sale of wine increased by 10%, but the effect was not so large as to affect total sales. Sales of spirits and beer were not significantly affected. In 1983 to 1984, no immediate significant increase in sales of wine was found. The estimated effect of the policy change in 1978 was modest compared with results presented in most earlier studies regarding the privatization of wine sales in other jurisdictions. One explanation could be that the policy change in Quebec was valid only for a limited number of wines, which accounted for only a fraction of the total alcohol sales market.