July 13, 2020

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Alcohol sales spiked early in pandemic

Manitoba Liquor and Lotteries saw retail alcohol sales increase during the initial stage of the pandemic, generating $2 million more in revenue in March and April than the same period last year.

The increase helped the corporation offset losses from shuttered casinos.

Chief executive officer Manny Atwal provided new details on the corporation’s pandemic response and anti-theft strategy during a legislature meeting on Crown Corporations Thursday afternoon.

The corporation has also managed to significantly reduce thefts at its Liquor Mart locations that last year amounted to $2.9 million in product taken from store shelves, doubling the total from the previous fiscal year, Atwal said.

Manny Atwal, Manitoba Liquor and Lotteries chief executive officer, said the corporation was not able to slow the rate or severity of thefts despite launching an anti-theft strategy more than a year ago and seeing some initial positive results. (John Woods / Winnipeg Free Press)

JOHN WOODS / WINNIPEG FREE PRESS

Manny Atwal, Manitoba Liquor and Lotteries chief executive officer, said the corporation was not able to slow the rate or severity of thefts despite launching an anti-theft strategy more than a year ago and seeing some initial positive results. (John Woods / Winnipeg Free Press)

"Outside of COVID-19, one of the greatest challenges faced for the corporation has been Liquor Mart thefts," Atwal said.

Despite launching an anti-theft strategy more than a year ago and seeing some initial positive results, Atwal said the corporation was not able to slow the rate or severity of thefts.

The corporation’s introduction of controlled entrances at Liquor Mart locations, however, has stemmed robberies since the first entrance was installed at the Tyndall Market Liquor Mart last November, he said. The majority of liquor stores have since been renovated with controlled accesses and the roll-out to all Winnipeg locations is expected to be completed in the coming weeks.

"Over the past several months we’ve gone from over 400 thefts and robberies on a weekly basis to less than a dozen," Atwal said.

A spokeswoman for MLL said they’re unable to disclose the total cost of the security initiative before construction has been completed.

Following the arrival of the novel coronavirus in Manitoba, retail Liquor Mart sales in March and April increased by $4 million over 2019, Atwal said, with a net income of about half. Those sales have since levelled out.

Some of those gains, however, were deflated by revenue losses from licensees, including restaurants and wine stores.

"We’re pretty much on budget, plus or minus a percentage point or two at this point," Atwal said of liquor operations.

“Over the past several months we’ve gone from over 400 thefts and robberies on a weekly basis to less than a dozen.” ‐ Manny Atwal, chief executive officer at Manitoba Liquor and Lotteries

Atwal’s remarks came during the first sitting of a Manitoba Liquor and Lotteries CEO and board chair before the committee since November 2016.

Despite a significant drop in revenue attributed to the pandemic-based closure of casinos and the province’s VLT network, MLL has been able to manage its expenses relative to income and is projecting to have a positive cash flow until the end of the second quarter.

Approximately 1,300 MLL employees, or 40 per cent of the company’s workforce, have been temporarily laid off -- including 1,100 casino employees and 200 staff in management and support roles, Atwal said. More than 130 have been redeployed to assist in home delivery efforts and distribution.

A treasury board document posted online in mid-April said Manitoba Liquor and Lotteries normally contributes more than $600 million a year into government revenue but could see negative cash flow for some time, The Canadian Press reported.

The chief executive officer said the corporation continues to operate as a "cash-positive" business.

"As you can imagine the casinos and VLT network contributed significantly to our bottom line from a revenue standpoint," Atwal said. "The shutdown of those for two months now is impacting our fiscal delivery relative to budget."

Atwal said online gaming has more than doubled since the pandemic but is still relatively small and less than a tenth of what was lost with the closure of casinos and VLTs. The corporation has also put non-safety related projects temporarily on hold to manage expenses. Meanwhile, cannabis operations have not been significantly impacted, Atwal said. The corporation is currently in the process of developing new forecasts for the full fiscal year.

"Our most current projections show that we would likely not be cash flow negative. Our projections go forward to the end of the second quarter, at this point, and there’s still a number of assumptions and variables in there that could impact that number," he said.

Opposition MLA Adrien Sala said the contradiction between the treasury board analysis and what MLL officials stated Thursday raises concerns over the government’s request to its departments and Crown corporations to find savings.

"We learned clearly today that the premier’s messaging around these Crown corporations and how they’re bleeding money and using that as a pretense for making cuts across the whole of government are totally baseless," Sala said.

Crown Services Minister Jeff Wharton said quarterly reports are a good gauge, but are not the end result.

"Certainly, the CEO had mentioned these are fluid times and the numbers are always fluid as well," Wharton said.

danielle.dasilva@freepress.mb.ca

Danielle Da Silva

Danielle Da Silva
Reporter

Danielle Da Silva is a general assignment reporter.

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