SAQ | Support the momentum of local producers

From the Commission des liqueurs to the Société des alcools, the “drinking” market has evolved considerably in Quebec. However, the recent report by Nathaëlle Morissette⁠1 and the issues associated with the labor conflict that is emerging at the state corporation show that a reflection on the nature, mandate and future of the SAQ is necessary.

The SAQ runs two hares at once. Trading, importing and marketing wines and spirits from around the world at the best value for money is one thing. Acting as a partner of booming local production is another.

However, it is time for this partnership to be put forward with the aim of supporting our local industry, then gradually reducing the share of our imports in the wine, beer and spirits market, for the benefit of consumers, fond of quality local products, and local producers.

The SAQ has considerable commercial strength. It can rely on its monopoly to demand highly competitive prices from foreign producers – before taxes.

Unfortunately, this search for the best quality-price ratio fuels a business culture focused on short-term profit, which is not best suited to the development and support of Quebec producers. After all, the approach of crushing import prices and focusing on the most profitable products is not the same as supporting booming local production.

Specify the mission

We cannot treat the local wine and spirits industry in the same way and with the same profitability targets as those of foreign producers. If the SAQ is to act as a true partner of the local market, it should start by including it in its constituting law.

To date, this law, centered on the “mandate to trade alcoholic beverages”, contains no explicit mention of the role of the SAQ in supporting the development of local producers.

However, behind each Quebec product sold there is added value: jobs, land use, a reduction in the environmental footprint, etc.

Reading the SAQ’s 2022-2023 annual report confirms this. The direct and indirect economic benefits of increasing local production are not on its radar screen. Results are presented, without distinction between the import mission (intended for high profitability) and the role of partner of Quebec production. Of the 119 pages of the report, the results – more visual than substantial – of the increase in “Origine Québec” sales fit on a single page.

Room for changeints

In the debate – often simplistic – on a hypothetical privatization of the SAQ, we usually forget that a very large part of the alcoholic beverage trade is already outside the monopoly of the state company. This is also the case for most beer sales. However, the growing market place occupied by Quebec microbreweries in convenience stores and grocery stores offers food for thought.

To ensure the development of our national production, changes are necessary. Should we review the mandate of the SAQ to make its role as partner of local producers more explicit? Split the activities of the state corporation in two in order to distinguish its mandate of importing at the best cost from that of marketing and supporting local products?

Or, again, take a further step in market liberalization by facilitating, like microbrewery beers, the sale of local wines and spirits in convenience stores, grocery stores and restaurants? This would rally Quebec consumers.

To date, local producers are at the mercy of the SAQ’s decisions, at least as soon as their production goes beyond the property sales model.

Our relationship with alcohol has evolved significantly since the plebiscite on prohibition organized by Wilfrid Laurier in September 1898. Quebec then demonstrated its specificity by voting massively against a policy of prohibition widely supported by the rest of Canada. Since then, the establishment of a state monopoly in 1921 has served us well.

However, the state corporation has still not found the way to ideally support Quebec producers. Without clear details from the shareholder, profit maximization risks preventing the SAQ from fully assuming the driving role it could play in this sector of our economy for a long time to come. It’s about optimizing profits, of course, but without crushing local producers.

1. Read the article “Sale of Quebec spirits at the SAQ: the end of the “open bar””

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