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

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

 

Just Posted

Trail area homicide investigation continues

Jan. 14 marked one year since Jordan Workman was discovered in the trunk of a burnt car

Updated: Outbreak prompts advisory for visitors to extended care wing in Trail hospital

A respiratory infection has been active in Poplar Ridge Pavilion since Monday, advises IH

RDCK moves ahead with Castlegar rec complex upgrade plan

Board approves grant application for $13 million from provincial, federal governments

Scammers using Castlegar home for rental fraud

Local realtors say the problem is happening more frequently with their properties

Trail police seek to ID more loot recovered during weapons search

Trail RCMP recovered numerous weapons and stolen items after search at Fifth Avenue residence

Rare ‘super blood wolf moon’ takes to the skies this Sunday

Celestial event happens only three times this century

Scientists ID another possible threat to orcas: pink salmon

For two decades, significantly more of the whales have died in even-numbered years than in odd years

B.C. dangerous offender in court for violating no-contact order, sends letter to victim

Wayne Belleville was shocked to see a letter addressed to him from his shooter, Ronald Teneycke

Crowsnest Pass RCMP seek help locating missing man

58-year-old Stuart David Duff was last seen on Jan. 6, 2019.

Judge denies requests from Calgary couple charged in son’s death

David and Collet Stephan wanted $4 million to pay for past and future legal bills

Explosion sends B.C. firefighter to hospital

Kelowna fire crews responded to a blaze at Pope’sGallery of BC Art & Photography on Friday

Ex-Mountie investigating ‘Surrey six’ murders pleads guilty to obstruction

Derek Brassington entered his plea in B.C. Supreme Court on Friday

Man blames his loud car radio, sirens for crash with B.C. ambulance

Tribunal rejects bid to recoup ICBC costs after crash deemed 100-per-cent his fault

RECALL: Salmon Village maple salmon nuggets

Customers warned not to eat product due to possible Listeria contamination

Most Read