Retail liquor store permits to be auctioned
Permits will be available for Esterhazy, Carlyle:
January 24, 2020, 8:57 am
There will be new opportunities for retail liquor stores in Esterhazy and Carlyle in an online auction starting this week.
The second round of auctions for available retail liquor store permits in Saskatchewan begins January 21 with bids closing on January 31, and two communities in the southeast—Esterhazy and Carlyle—will have permits available for auction.
Communities included in the second round of auctions are the Rural Municipality (RM) of Blucher, Carlyle, RM of Corman Park, Esterhazy, Gull Lake, RM of Kindersley, Langham, RM of Longlaketon, Regina Beach, RM of Shellbrook, Unity and White City.
“There was strong interest during the initial online auction for permits that concluded in December,” Minister Responsible for the Saskatchewan Liquor and Gaming Authority Gene Makowsky said.
“The auction process has worked well and ensures that available liquor permits in the province are allocated efficiently and transparently.”
Each auction will have an opening bid of $1,000 and interested bidders are required to register at www.McDougallBay.com, which is the website where all bidding will take place.
The availability of permits is determined by the population of a community and the number of current retailers operating.
A community must have a minimum population of 500 to be eligible for a retail liquor permit.
An auction will only occur if someone expresses interest in a community where there is an available retail store permit.
Since the announcement of this approach last year, interest has been expressed in 28 communities and RMs.
In cases where there is more than one permit available in a community or RM, the auction will determine the applicant for one permit only.
Future auctions will be held for additional available permits.
The winning bidder must also meet all terms associated with holding a liquor permit.
Further auctions will be held over the next few months until all current expressions of interest are addressed.
After the initial rounds, auctions will take place on a quarterly basis, if interest is expressed in a community where there is at least one available permit.
The second auction to allocate additional retail liquor store permits begins on Jan. 21.
Permit auctions a new process
“Back in May, the government announced that new retail liquor store permits would be allocated based on the population of a community or RM and the number of existing permits within those communities,” explains David Morris of the Saskatchewan Liquor and Gaming Authority.
“Communities with a population base of at least 500 can be eligible for a retail liquor store. If someone expresses interest in a community where there is a permit available, the permit is then allocated via an online auction process.
“We had the first online auction at the end of November, and it concluded December 6.”
Permits in that first round went for hundreds of thousands of dollars each.
There were five permits that were auctioned off in the first round.
In Estevan the winning bid was $295,000, in Martensville it was $430,050, Melfort was $825,000, Warman was $500,050, and in Weyburn the winning bid is $325,100.
In the live online auction, bidders can see what the current high bid is and the actions of other bidders.
Lots of interest in first round
Morris said there was a lot of interest in the first five permits to come up for auction late last year.
“In an auction, it always depends on who’s interested,” he said. “There was a lot of interest in the first one. There were multiple bidders on all of the permits. It’s a public auction, it’s done online. People can see the bidding in real time. It’s difficult to say what the interest will be in the next round, but there was a lot of interest the first time.”
Esterhazy and Carlyle are among the communities to see auctions because there are permits available based on their population and there has been interest expressed in permits specifically in those communities.
Winners of the auction still have to meet all the requirements to be issued a liquor permit.
“Whoever is the successful bidder in an auction doesn’t necessarily receive a permit,” said Morris. “They still have to apply for a permit and meet all the conditions that come with getting a liquor permit.”
Retail liquor permits can now be bought and sold by permit holders.
Mayor says liquor business will will be a good addition to town
Esterhazy Mayor Grant Forster said that whatever business ends up with the liquor store permit, it will be a good addition to the town.
“Whether it’s a way for an existing businesses to be able to add an additional product line that’s going to help them bring in more customers, or if it happens to be a new stand-alone business, a new business employing new people, it will bring more business to town. Our hope is if it’s a stand-alone it would be a new building, which would add to the community and our tax base,” he says.
“Competition is good, and I think it will be a benefit to the town.”
There was a large amount of interest in the last round of permit auctions, and Forster expects there to be a lot of interest in the Esterhazy permit.
“Whether an existing business is going to want to jump in I don’t know, but I certainly think that a company such as Sobeys that is building stores across the province might consider a location like Esterhazy. Why wouldn’t they want to consider a town like ours, with 2,500 permanent residents and 1,000 contractors we have in the area. It has to be, for them, a pretty lucrative market if they’re able to break into it.
“There are certainly the people around to support a store. If I had the means to jump into something like this, I would be happy to go into a business like that in Esterhazy.”
He said the community is always welcoming to new businesses.
“We’ve got a fairly reasonable retail section. We’re always looking at anything and willing to welcome anything. Two years ago, I never would have dreamed that something like the Korean store we have, Tyche and Hebe, would be as successful as they are. They decided to take the chance and set up a storefront, and man, they are doing a really good job, and people are supporting them. Any new business is something we welcome to town.”
Borderland Co-op has plans for new liquor store in Moosomin
In Moosomin meanwhile, there is an SLGA liquor store, one private liquor store has been developed, the Downtown Liquor Store attached to the Uptown Hotel, and Borderland Co-op has plans for a third liquor store, which will be built as an addition to the Co-op C-Store on the Trans-Canada Highway.
“Right now we’re going through the process and waiting for the transfer of the permit,” Borderland Co-op GM Jason Schenn said. “It takes some time to get through all the hoops. SLGA has a window they demand you hit from when the permit transfers to opening, so I’m thinking we are looking in the spring 2021 timeframe.”
He said Borderland decided to get into the liquor business as a way to add value.
“We’re always looking to add to the value of our sites, and to stay relevant. Sometimes you need to get into different areas. This just seemed like an opportunity that came up at the right time, and we were in a position to go after it. We always have our horizons fairly open to be able to take advantage of an opportunity when it comes.
“In this case, because we have a highway site with a lot of travellers stopping, we have access to that market rather than just relying on the local market. I think that will be a positive thing for us, and still not impact the local volume for the SLGA site and the Uptown site. There should be room for all three considering how SLGA does their math on what are viable licence numbers for the community.”
He said the liquor store will be added onto the existing C-Store building. “We have site plans figured out. We will be doing it in combination with a bunch of other upgrades on our C-Store and petroleum site. We’re going to be doing some expansion on our pumps, expansion on our cardlock and storage. We’re hoping to add 50-60 per cent to the volume on our petroleum side, and we’re looking at different car wash equipment to try to improve the efficiency of the car wash, too.”
No additional permits for Moosomin
Moosomin currently has three retail liquor store permits, which is the maximum for communities between 2,500 and 5,000 population, so there will not be any additional liquor store permits available to be auctioned for Moosomin.