As of 2006, Alberta is the only Canadian province to have enacted completely privatized liquor retailing. All other provinces maintain government ownership and control over much of the liquor industry, especially with respect to distilled spirits. This privatization was carried out in late 1993 and early 1994 under the auspices of one of the AGLC's predecessors, the ALCB.
The sale and distribution of beverage alcohol in Alberta had been conducted privately, under licence until 1916 when, during the height of the Prohibition movement, the Liberal government called a plebiscite in which Albertans voted in favour of the Liquor Act, which imposed an outright ban on the sale of alcohol in the province.
As was the case throughout North America, Prohibition proved to be an utter farce in Alberta. However, the United Farmers government that replaced the Liberals in 1921 knew that the still-powerful temperance movement would have to be appeased, so when they called a new plebiscite to repeal Prohibition in 1924 they promised that the sale of alcoholic beverages would be tightly controlled. When the plebiscite passed and Prohibition was repealed, the Liquor Act was replaced by the Liquor Control Act and the Alberta Liquor Control Board was created. The first hotels to be re-licensed were the Palliser Hotel in Calgary and the MacDonald Hotel in Edmonton.
The ALCB would maintain tight control over the Albertan liquor industry for the next seven decades. Hotels that met the strict requirements for a liquor licence had to adhere to draconian rules regarding the décor, cleanliness and aura of the establishment. According to historian David Leonard, the idea was to make drinking establishments as sparse as possible. Patrons were not allowed to stand up with their drinks in hand and entertainment in a licensed beverage room was prohibited. Although women were allowed to drink alongside their male counterparts at first, "mixed" drinking was later blamed for riotous behaviour and in 1928 the Liquor Control Act was amended, so that special rooms had to be put together for "Ladies and Escorts." In the 1930s the ALCB took it upon themselves to arm hire armed officers to enforce the Liquor Control Act. The Royal Canadian Mounted Police would assume enforcement duties after taking over provincial policing duties from the Alberta Provincial Police in 1932.
Beer off-sales were permitted from hotels starting in 1934, however the sale of wine and hard liquor remained very tightly controlled. As was the case in most Canadian provinces, the only legal way to purchase spirits in Alberta was to travel to a deliberately uninviting ALCB store, where the customer was forced to apply in paper for what they wanted and have it then fetched by a staff member after the customer's age was carefully checked. The ALCB did not permit individualized packaging for wine or spirits, rather they purchased wine and spirits from the wineries and distillers in bulk barrels and bottled them into stone jars and bottles with the ALCB brand for sale in stores. ALCB stores were few and far between (especially in rural areas), and spirits were frequently watered down prior to bottling.
A Social Credit government would assume office in 1935 and the Socreds would go on to dominate Albertan politics for the next three decades. The socially conservative governments of Premiers William Aberhart and Ernest Manning were slower to relax liquor laws compared to most of their contemporaries in other provinces. In one notable policy, the Social Credit government refused to licence commercial airlines during their tenure and took vigorous steps to ensure that commercial flights were not serving alcohol whilst travelling through Albertan airspace.
The Albertan government and ALCB started loosening some restrictions in the 1950s and 1960s. Clubs and canteens could be licensed from 1950 onwards. In a plebiscite held in 1957, voters in and near Edmonton and Calgary voted overwhelmingly to de-segregate beverage rooms, however men and women would not be allowed to drink together province-wide until 1967. Having repealed the requirement for customer signatures on counter slips to purchase alcohol in 1965, in 1969 the ALCB opened its first self-serve liquor store in Edmonton. By 1970 the ALCB was no longer bottling products.
The Progressive Conservative government that replaced the Socreds in 1971 moved to loosen restrictions further, lowering the drinking age from 21 to 18 after taking office. Although some Albertan MLA's since then have mooted raising the drinking age back to 19 to match the laws of neighbouring British Columbia and Saskatchewan, the lower drinking age remains in effect as of 2008. Responsibility for domestic beer warehousing was transferred to the Alberta Brewers' Agents Limited in 1973.
The 1980s would see restrictions relaxed further, with the first wine stores licensed in 1985 and the first hotel-based cold beer stores approved in 1988. In 1990 hotel off-sales expanded from beer only to beer, wine and spirits.
Under Municipal Affairs Minister Steve West, privatization was carried out in a strictly business-like manner. The 202 ALCB liquor stores were systematically sold off. Where private interests believed an existing ALCB store could be profitably operated as a privately owned liquor store, the store continued to operate under new ownership. Liquor stores that were not economically viable in the private sector were closed down with the properties sold to the highest bidder. Between September 4, 1993 and March 5, 1994, every ALCB store was either sold or shut down. With respect to the ALCB stores that were converted to private liquor stores, the Alberta Union of Provincial Employees was denied successor rights to the private stores. Whereas all non-management ALCB employees in 1993 belonged to the AUPE, as of 2006 no privately-owned liquor store is known to have become unionized except for those owned and operated by Loblaws under the Great Canadian Liquor Store and those owned and operated by Safeway in conjunction with a Safeway Grocery Store.
The ALCB initially retained warehousing and distribution responsibilities for wine, coolers, imported beer and spirits. The warehousing operation was contracted out to a private operator, Connect Logistics in June 1994. Connect Logistics leased the ALCB's existing warehouse in St. Albert and continues to warehouse all wine, coolers, imported beer and spirits legally sold in Alberta. Domestic beer is warehoused and distributed by Brewer's Distributor Limited. The AUPE was again denied successor rights to the Connect Logistics-operated warehouse and the warehouse thus became a non-union operation.
Privatization was controversial, attracting criticism from people who worried about the social costs of liquor privatization. However, all available evidence indicates that privatization has had no social consequences in Alberta. In the end, the fiercest sustained opposition came from organized labour who were upset about the sudden loss of thousands of unionized public sector jobs.
It is worth noting that ALCB workers had gone on strike earlier in 1993 and caused an interruption in service at Albertan liquor stores. Compared to other Canadians, Albertans are generally seen as less friendly to unions and many Albertans were disappointed by what they interpreted as the union's lack of concern for Albertans' social lives (the strike over the Victoria Day weekend). Some Alberta labour leaders continue to view the privatization as a retaliation against a legal strike. It is still debated whether this strike directly influenced the Tories' election promise and subsequent decision to privatize liquor store, or influenced some Albertans to vote for Klein as a result.
Distribution delays by Connect Logistics became a problem in 2006 with complaints from liquor retailers that they weren't receiving stock on-time and had empty shelves as a result. Some retailers also initiated legal action against the AGLC.
In response, the AGLC hired a 3rd-party consultant, Price Waterhouse Coopers, to review the provinces liquor distribution system. The report was publicly released in March 2007. The complete report can be found on the AGLC's website.
The report did not make any drastic recommendations on how liquor products are distributed in Alberta. It recommended that Connect Logistics remain in its role and continue to warehouse and distribute wine, spirits, and imported beer to maintain "stability" in the system. The biggest difference in this arrangement would now require a formalized contract between Connect Logistics and the AGLC including "performance indicators" for things like consumer service and on-time delivery.
One of the more controversial recommendations was for a new warehouse pricing system. In July 2007, the AGLC approved the new prices for storage, warehousing and distribution. Connect Logistics claims the new prices better reflect the actual handling costs of each product. Some managers of smaller liquor stores believe that the system works to the advantage of larger operators.
Over the 2007 Christmas season, the stories of empty liquor store shelves and product shortages disappeared from the media as shelves remained stocked.
Although Alberta has deregulated its retail liquor industry to a greater extent compared to any other province, its Connect Logistics-administered monopoly on the wholesaling of wine and distilled spirits is comparable to the systems in what in the U.S. would be considred an alcoholic beverage control state. This means that by U.S. standards, Alberta would still be defined as a "control" jurisdiction.
When the U.S. abolished Prohibition in 1933 the bordering U.S. state of Montana modeled its own liquor control board on the one in place in Alberta. Interestingly, Montana has made similar changes to Alberta over the years and its present liquor distribution system is still very similar to the present Albertan system. It is considered to be one of the 18 "control" states in the U.S.
In recent years disorderly conduct at and near licenced establishments became identified as a growing problem, particularly in the major cities. The province's economic boom and resulting affluence of its youth have been identified as the root cause of the increase in binge drinking, but some blamed inadequate restrictions on alcohol sales in establishments (compared to other provinces) as contributing to the problem. In July 2008 the Albertan government responded to complaints by police and other groups by introducing new regulations to restrict the sale of alcohol in restaurants and bars. Among other things, as of August 1, 2008:
The AGLC will be responsible for enforcing the new rules.
The AGLC consists of a Board and a Corporation. The Corporation acts as the operational arm of the organization, while the Board is responsible for reflecting the government's direction through policy and regulatory matters.
Although liquor is retailed in Alberta by private interests on a competitive basis, like its predecessor the AGLC has maintained a monopoly over the wholesaling of wine, coolers, imported beer and spirits. The AGLC, technically speaking, continues to be the purchaser of these products and thus Albertan liquor taxes (which are still relatively high compared to taxes in the U.S.) are technically termed the AGLC liquor markup. The wholesaling operation itself is mostly handled by Connect Logistics who continue to be based in St. Albert. Maintaining a monopoly over the wholesale business allows the AGLC to maintain tighter controls over liquor distribution than a more competitive system would allow, in particular it allows the AGLC to ensure that it does not miss out on any of its "markups" (the bulk of the liquor tax in any Canadian province, including Alberta is the provincial liquor markup).
Between 1999 and 2006 the AGLC operated as part of the Ministry of Gaming. When Ed Stelmach became premier he restructured government so there were fewer ministries and ministers. The Ministry of Gaming was abolished following December 2006's reorganization and the AGLC was assigned to "report through" the Alberta Solicitor General.