Published in a slightly edited version in the Financial Post, June 12, 2007, p. FP-15

 

Alcoholic Actions Speak Louder
by
Pierre Lemieux

 

We economists are trained to be suspicious of claims people make about their goals or preferences. Talk is cheap, actions speak louder than words. We prefer to look at revealed preferences – preferences revealed in actual choices. This is true even when the speaker drapes himself in the mantle of ethics. Consider the ad published last week in Québec newspapers by the Ethics Council of Educ’alcool, an alcoholic beverage trade association. A blonde with a sexy and mischievous look is portrayed as saying, “I’m appearing in a wet t-shirt ad. Nobody’s complaining.” But, the ad asks, “Would you?” It then explains that “You can file a complaining about any alcoholic beverage ad or promotion that treats people as sexual objects” (as “objects of pleasure,” says the French version in strange Newspeak). The ad goes on to say that the Ethics Council “enforces a code prohibiting communications that: promote sexism,” “encourage alcohol abuse”, and so forth. Why would alcoholic beverage manufacturers and retailers embark on a campaign against alcohol advertising and sexism? The economist’s first guess would be that the trade association’s members must be looking for a new market among young, non-sexist people, and non-wet-tee-shirt women. A related hypothesis is that they want to cajole the all-powerful government and be left alone to make some money while giving the consumer what he wants. And it’s a fair guess that Educ’Alcool members are under the thumb of the Société des Alcools du Québec, also a member. The chasm between professed ideals and preferences revealed in daily choices can be seen more clearly in the case of the provincial monopolies themselves. The Ontario Liquor Control Board was created as a moral control entity. In a recent paper, two Lakehead University sociologists, Gary Genosko and Scott Thompson, convincingly argue that, between 1927 and the 1960s, the LCBO presided over “the development of a vast bureaucracy of surveillance by provincial authorities […] around alcohol control.” Purchasing alcohol was deemed a “privilege.” The LCBO maintained a system of purchase permits and a list of people prohibited from buying alcohol. This moral mandate and its enforcing system crumbled when the good social groups stopped hating wines and spirits. But the government monopoly survived. Besides the power of trade unions, the more than $1-billion that the LCBO pays annually into the provincial treasury must have something to do with this. Signs of the LCBO’s greed are everywhere in the practices it boasts about on its website: “Sunday shopping, AIR MILES® reward miles, credit and debit payment options, value-adds and Limited-Time-Offer discounts.” Its “new brand vision,” Discover the World, calls on employees “to engage customers in a journey of discovery, to take the mystery out of the bottle and the perceived risk out of the purchase.” The moral mandate is still there, but it espouses new moral fads. LCBO’s CEO writes, in the 2005-06 annual report, “The LCBO was founded on social responsibility and we are now building on that tradition of caring by promoting environmentally responsible retailing practices.” The LCBO supports “a captive breeding program for the Eastern Loggerhead Shrike, an endangered predatory songbird.” Captive? Gouging its captive clientèle is probably now the LCBO’s real priority. Whatever they say to please their political sponsors, private businesses are in the industry to make a buck. Good for them and for the consumer! As for the public monopolies, like the SAQ or the LCBO, they continue sucking their two breasts (my apologies for the hyperbole, I must have seen too many Educ’alcool ads): control and money.