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

Priorities highlighted for continued tourism growth in Revelstoke

The City of Revelstoke has released their Resort Development Strategy for 2019-2021.… Continue reading

MP Wayne Stetski calls for urgent climate action

Government Business No. 29 motion made by Catherine McKenna, minister of environment.… Continue reading

Stoked on Science: Why didn’t the mountain ash bloom?

Question: I’m sure I’m not the only person in Revelstoke who has… Continue reading

Revelstoke cadets host 67th annual Ceremonial Review

Revelstoke’s 2458 Rocky Mountain Ranger Army Cadets hosted their 67th annual Ceremonial… Continue reading

Construction and wildfires in the area

Forecast from Environment Canada: Today: A few showers ending this morning then… Continue reading

VIDEO: Trans Mountain expansion project gets green light, again

Prime Minister Justin Trudeau announced the decision in Ottawa on Tuesday afternoon

Demonstrators on either side of Trans Mountain debate clash in Vancouver

Crowd heard from member of Indigenous-led coalition that hopes to buy 51% of expansion project

South Okanagan retired nurse’s petition read in House of Commons

Teri McGrath wants provinces to implement no-fault system for medical errors

Grieving B.C. mom hopes Facebook message leads to new investigation into son’s Surrey homicide

Criminal Justice Branch didn’t lay charges, concluding no substantial likelihood of murder or manslaughter conviction

Okanagan library branch back in business after Monday closure

Discovery of unknown powdery substance in Vernon book return prompts evacuation, closure

Hergott: Contribution and Expectation of a will

Lawyer Paul Hergott continues his column on wills

B.C.’s measles vaccination program gains traction in May

More than 15,000 doses of the MMR vaccine has been administered across the province

B.C. farmers concerned Agricultural Land Reserve changes choking their livelihood

Dozens voice concerns at special meeting hosted on Vancouver Island

Beloved South Okanagan baker dies

Beloved baker Ben Manea died suddenly on June 15, bakery to operate for one final week

Most Read