BC’s Liquor Distribution Branch Hikes Prices in July

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In April, 2015 the BC Liquor Distribution Branch introduced its much hyped and now maligned reforms. This included introducing a wholesale system where every licensee and the LDB government stores paid the same price and prices on the shelf are listed pre-tax. In the previous system, prices were listed post-tax. The Government at the time promised that prices would not increase beyond a few cents. Everyone in the industry did not understand the math given that the BCLDB operating margin is projected to be 18% this year and yet they (along with all other licensees) were being asked to pay list (retail) price minus 16% for products.

In April, 2015 the government promise seemed accurate – prices did not increase significantly for most products in LDB stores. Skeptical of the likelihood this would be a long term promise, I have been cataloguing prices pre-reform, in April, 2015 and every month since. My investigations have revealed that in July this year, the LDB has suddenly and dramatically increased prices on a very large number of products, including many of the most interesting small production wines available in the Province.

The result is a 2-7% increase in prices compared to pre-reform pricing for products that were already on the shelves in March, 2015. In my view this is an inevitable result of the government’s approach to reform and the only way in which the government stores can remain financially sustainable. I also believe this is only the first of several price increases to come unless the LDB plans to run its business on close to 0 margins. In other words, when all stores pay the same for liquor, and that price is an absurd 16% below the previous retail shelf price, prices will go up, way up. The result: the most expensive liquor jurisdiction in North America just got more expensive, gouging BC consumers and increasing their cost of living to increase provincial profits. In my view, this is equivalent to a hidden tax increase.

Sloppy LDB Labelling reveals the price hikes: price on top is the pre-reform price that includes tax. Price on the bottom is the late July pre-tax price. Picture Taken August 9, 2015 at Cambie and 39th Signature Store.

Sloppy LDB labelling reveals the post-reform price hikes: price on top is the March, 2015 pre-reform price that includes tax. Price on the bottom is the late July pre-tax price.
Picture Taken August 9, 2015 at Cambie and 39th Signature Store.

Here is a sampling of the results of my research. I will be updating this soon with a more extensive price comparison between March, 2015; April, 2015; and July, 2015.

Ridge Petite Sirah Lytton Spring 2012

March, 2015: $50

April, 2015: $43.89 + 15% tax = $50.47

July, 2015: $45.99 + 15% tax = $52.89

Price Increase from March, 2015: 5.78%

Jonata Todos Syrah Blend 2011

March, 2015: $69.99

April, 2015: $60.89 + 15% tax = $70.02

July, 2015: $61.89 + 15% tax = $71.17

Price Increase from March, 2015: 1.67%

Alvaro Palacios Placet White Rioja 2009

March, 2015: $36.99

April, 2015: unknown

July, 2015: $32.99 + 15% tax = $37.94

Price Increase from March, 2015: 2.56%

Christian Moreau Chablis Les Clos Grand Cru 2013

March, 2015: $69.99

April, 2015: $66.99 + 15% tax = $77.04

July, 2015: $69.99 + 15% tax = $80.49

Price Increase from March, 2015: 6.67%

Gianni Brunelli Rosso di Montalcino 2011

March, 2015: $34.99

April, 2015: unknown

July, 2015: $33.99 + 15% tax = $39.09

Price Increase from March, 2015: 11.69%

Quinta do Vale Meao Meandro 2012

March, 2015: $29.99

April, 2015: $27.79 + 15% tax = $31.96

July, 2015: $27.79 + 15% tax = $31.96

Price Increase from March, 2015: 6.53%

More to come…

Comments

  1. The Friday Files: News & Notes From Canada's Wine Scene - […] his Vancouver-based Just Grapes blog, Shea Coulson pulls back the curtain to reveal how much wine prices have gone…

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