REGINA - Auctions to sell the permits associated with the soon-to-be-closed SLGA retail stores will begin on Feb. 6.
McDougall Auction will be conducting the online auctions, which will be staggered with final auctions happening starting Feb. 15. According to the province, these will be held in real time at https://mcdougallauction.com/new.
These auctions are for the permits only, with no buildings, fixtures or inventory are included in the sale. 35 permits will be up for bid from private bidders: 34 cover the SLGA retail closures announced during the Speech from the Throne in October while the 35th was a previously-closed Saskatoon store.
The province released further details about the auction process Tuesday for the SLGA liquor store licenses that are being relinquished when the stores close by the end of March.
The auctions are for the retail store permits only; no assets, inventory or buildings are included. Winning bidders must still apply and qualify to hold a retail store permit.
According to the province, interested bidders must preregister and must pay a $5,000 deposit to participate in the auction, which is refundable if they are not successful. The winning bidder must also meet all the terms associated with holding a retail store permit, including good character.
There will be six auction groupings and the online auctions will take place over a period of ten days. The province says each auction is open for 10 days and will take place in real time, with bids visible as they are made. There will be a website open to ordinary members of the public who can follow the bidding process as it unfolds.
Here are details on which communities are included in the groupings for auctions of the licenses, and the licenses that are up for bid:
Auction Group 1 – Feb. 6-15 includes Regina, Saskatoon, Prince Albert, Watrous and Carlyle.
Auction Group 2 – Feb. 7-16 includes Regina, Saskatoon, Moose Jaw, Estevan, Assiniboia and Moosomin.
Auction Group 3 – Feb. 8-17 includes Regina, Saskatoon, Swift Current, Meadow Lake, Nipawin and Biggar.
Auction Group 4 – Feb. 13-22 includes Regina, Saskatoon, Yorkton, Melfort, Esterhazy and Buffalo Narrows.
Auction Group 5 – Feb. 14-23 includes Regina, Saskatoon, North Battleford, Weyburn, Humboldt and La Ronge.
Auction Group 6 – Feb. 15-24 includes Regina, Saskatoon, Prince Albert, Fort Qu’Appelle, Creighton and La Loche.
The reason there are multiple auctions for Regina, Saskatoon and Prince Albert is due to those communities having multiple SLGA locations and therefore more than one permit up for bid in the auction.
Any individual or business can put in a bid during the auction. The winning bid will give the individual or business the opportunity to formally apply for the retail store permit. The prospective retailer must still meet regular SLGA liquor licensing requirements to hold a retail store permit, including good character.
The winning bidders could still be able to sell their permit, but they must open the stores and they must be running before that can happen.
In speaking to reporters at the legislature Jan. 10, Minister for SLGA Lori Carr defended the process being used to auction off the available permits.
"We've shown in the past the way that permits have gone out and individual businesses have taken those businesses and become successful in many communities across the province. We don't expect this to be any different."
While some previous SLGA permits have been done by auctions already, this online process is different from the process employed by SLGA in 2016 for the original SLGA stores that were closed to make way for private permits.
In that instance, said Carr, individuals had to bring a business plan forward and then the government determined based on those business plans who would get the permits.
The current employees of the existing SLGA stores will be able to put in a bid, but won’t be getting preferential treatment in the bidding process this time.
“Last time there wasn’t a value for them as per se," said Carr. "There has been a market created and so now there is a value for them, and so we are going to continue on with that.”
The expectation is there will be plenty of bids for the SLGA permits. "We've had lots of interest, people are really excited, lots of calls -- when are they going up for auction, how is it going to work -- so we expect lots of activity when they do come."
Carr would not speculate to reporters on who will be making bids, though there are plenty of rumblings that familiar players in the private retail sector including Sobey's Liquor and Co-op will be interested.
The permits being sold will not be tied to any specific locations or previous operations, but they must remain in the municipality they are associated with. The new operator must also meet local zoning requirements and bylaws.
Once auctions for the retail permits wrap up, auctions will then be resumed for communities which qualify for an additional permit under SLGA's population matrix. These had been suspended during the pandemic.
As for the 34 SLGA liquor stores that are closed, Carr said the province owns 19 of those properties and expects most of those to be put up for sale after March 31 through a real estate agent, after they do an assessment to see if the properties could be used internally within government.
The existing stores will start closing in the third week of January beginning with the Regina Lewvan location, with all remaining SLGA stores closing by the end of March. The existing stores are also divesting their current stock of products.
Carr acknowledged that "yes, there are some products that are not available, but in all of the communities that these stores are closing there is another retail sales permittee, that if an individual wants a different product they can go to a different store."
The opposition New Democrats have issued a statement on the auctioning of the permits, with SLGA Critic Nathaniel Teed saying a lot of people were asking "is this what I voted for?"
Teed noted the SLGA liquor stores were still profitable, despite Minister Carr insisting to reporters the stores would be losing money starting next year.
"Nobody asked for the Sask. Party to sell off profitable liquor stores that pay for our hospitals and schools or to lay off 400 workers in the middle of an affordability crisis. With this important stream of revenue lost, I fear the Sask. Party government will continue to increase taxes and hike power and energy bills again just to pay for their bad financial decisions."