Liquor changes could push up prices

Good news: private and public B.C. stores get the same liquor tax mark-up starting April 1. Bad news: it's as much as 124%

Private liquor stores

Private liquor stores

VICTORIA – When the B.C. government announced its latest changes to liquor distribution, the reaction was not what I expected.

Private store representatives complained bitterly that the government is allowing further expansion of fridges and “cold rooms” in selected government liquor stores, and longer operating hours that include more Sunday openings. Those hours, along with non-union staff, are the private stores’ big advantages as things stand in B.C.’s hybrid liquor retailing system.

The B.C. Government Employees’ Union didn’t seem at all perturbed that state-run stores’ key advantage was also going to be gone effective April 1. That would be preferential wholesale pricing, in which the government’s monopoly wholesaler sells to them at cost and to private stores at higher rates.

How much higher? Liquor Distribution Branch officials were carefully vague on that, and it varies depending on which of the 22 wholesale categories you look at. They released a graph that suggests the average wholesale cost to government stores might be going up 10 to 15 per cent to create a “level playing field” with private stores.

That wholesale price difference is the main reason private stores have generally higher retail prices. And the majority of the province’s revenue of nearly $1 billion a year comes from this monopoly wholesale business, where the hidden tax is coyly termed a “mark-up.”

When the new, simplified system comes in next spring, a bottle of hard liquor will have a “mark-up” of 124 per cent. That’s right, LDB more than doubles the price with its wholesale liquor tax. And if it’s premium booze, anything valued at more than $21 a litre will get an extra luxury tax on top of that.

Coolers and ciders will see a 73 per cent mark-up. Wines are taxed at 89 per cent, with extra luxury tax on premium wines. Beer gets a per-litre tax with ascending rates for small, medium and large breweries. Then of course there is federal and provincial sales tax applied to all of it. Cheers!

Premier Christy Clark acknowledged that the first guiding principle of this overhaul is to keep that government revenue coming.

The new BCGEU president, Stephanie Smith, doesn’t sound like your bullhorn-toting socialist of yore. She insists she’s gung-ho to compete head to head with those private interlopers and get back some lost market share, particularly on the high-volume cold beer sales.

The union has another ace in the hole. Its current contract stipulates that LDB can’t close stores. In some small towns there are government stores that lose money, particularly since they’ve had more private competition. But at least for the duration of this BCGEU contract, the government retail arm will continue to operate in some places as a perverse social program, subsidizing retail clerk jobs that pay nearly twice what private retail pays.

And let’s face it, running a till at a liquor store is not rocket surgery. Private and government store staff have to take the same training, and liquor inspector sting operations have increased vigilance on ID checks in all stores.

With higher wholesale prices applied to government stores, this kind of artificial support will cost more. The only way LDB could maintain it without subsidizing it from the wholesale windfall would be to raise retail prices.

The LDB says this new simplified system is “not intended to impact consumer pricing.” Note the careful choice of words.

Oh, one last thing. There is another new tax in the works. It will be applied to higher-alcohol beverages, in an effort to reduce adverse health effects.

Tom Fletcher is legislature reporter and columnist for Black Press.

Twitter: @tomfletcherbc

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Comox Valley RCMP had access to 20 Street blocked off between Cousins and Choquette avenues as they conducted a raid of a house on the block. Photo by Terry Farrell
Comox Valley RCMP raid Courtenay problem house, several arrests made

Neighbours have reached out to media on several occasions with complaints about the property

A vial of Oxford-AstraZeneca COVID-19 vaccine is pictured at a family doctor office, Thursday, Feb. 25, 2021 in Paris. THE CANADIAN PRESS/AP -Christophe Ena
Tentative COVID-19 vaccine site chosen in the Comox Valley

B.C. is moving into Phase 2 of its COVID-19 mass immunization plan

Cumberland is considering downtown densification proposals, and with that comes questions around parking, among other things. Photo by Mike Chouinard
Water bottling ban, parking key changes for Cumberland zoning

Bylaw on amendments still need adoption following March 2 hearing

Arzeena Hamir, working her booth at the Comox Valley Farmers Market. LUSH Valley was recognized last month as a partner of the year by the BC Association of Farmers’ Markets. Photo by Bill Jorgensen
LUSH Valley recognized for collaboration with Comox Valley Farmers’ Market

They won Partner of the Year award by the BC Association of Farmers’ Markets

Chelsea Harry was last seen Feb. 21. Photo via Comox Valley RCMP
Comox Valley RCMP seeking help locating a missing woman

Missing person last seen in Courtenay on Feb. 21

B.C. Health Minister Adrian Dix and provincial health officer Dr. Bonnie Henry head for the B.C. legislature press theatre to give a daily update on the COVID-19 pandemic, April 6, 2020. (B.C. government)
B.C. nears 300,000 COVID-19 vaccinations, essential workers next

564 new cases, four deaths, no new outbreaks Thursday

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Municipal Affairs Minister Josie Osborne speaks in the B.C. legislature, March 4, 2021. (Hansard TV)
B.C. Liberals, NDP sing in harmony on local election reforms

Bill regulates paid canvassers, allows people in condo buildings

The intersection of Melrose Street and Third Avenue. (ELENA RARDON / ALBERNI VALLEY NEWS)
Suspect in custody after two pedestrians struck in Port Alberni hit and run

RCMP asking for video footage, credit witnesses for quick arrest

The Courtenay Fire Department hopes to start a new recruit training program in mid-2021, pending Provincial Health Orders. Scott Stanfield photo
Courtenay Fire Department gets creative

Due to public health orders resulting from COVID, the Courtenay Fire Department… Continue reading

(National Emergency Management Agency)
No tsunami risk to B.C. from powerful New Zealand earthquake: officials

An 8.1 magnitude earthquake shook the north of New Zealand Thursday morning

(AP Photo/Richard Vogel, File)
Pandemic stress, isolation key factors as to why Canadians turned to cannabis, alcohol

Study found that isolation played key role in Canadians’ substance use

Grand Forks’ Gary Smith stands in front of his Church of the Flying Spaghetti Monster float. Photo: Submitted
Grand Forks’ Flying Spaghetti Monster leader still boiling over driver’s licence photo

Gary Smith, head of the Church of the Flying Spaghetti Monster of B.C., said he has since spoken to lawyers

Most Read