Further privatizing Saskatchewan's liquor retailing system will cost the provincial treasury many millions in lost revenue, a research group says.

The report from the Canadian Centre for Policy Alternatives, to be released on Wednesday, comes shortly after the government launched a review of its current alcohol retailing system. The report was commissioned by the Saskatchewan Government Employees Union, which represents workers in public liquor stores.

The province owns about 75 liquor stores, but also allows booze to be sold through hotel off-sale outsets, rural franchises, and more recently, a small number of private wine and liquor stores. 

The government is now seeking public input on five options; everything from expanding the number of government stores — which Premier Brad Wall's government has already ruled out — to an Alberta-style privatization of all its retail outlets.

Saskatchewan liquor store

The Centre for Policy Alternatives thinks the government should change course and consider allowing an expansion of government-owned stores. (Neil Cochrane/CBC)

In response, the Policy Alternatives report says more privatization is generally a bad idea.

If the Saskatchewan Liquor and Gaming Authority had earned the same return on investment as Alberta's private liquor-store system, it would have lost about $250 million over five years, a news release from the research group says.

It says the existing private liquor stores in Saskatoon and Regina might be draining away $7.5 million in Liquor and Gaming board profits every year.

Although the government said in the throne speech it will not use taxpayer dollars to build more liquor stores, the Policy Alternatives report takes the opposite approach.

It recommends not licensing any more private retail stores.

It also thinks the Liquor and Gaming Authority should be instructed to study the financial implications of purchasing the existing private retail stores already operating in the province.

The full report is to be released on Wednesday.