As of April 1st, there have been some big changes to BC’s liquor policy including the extension of Liquor Distribution Branch store hours and addition of refrigeration and sales in some grocery stores. These changes will allow consumers greater access to craft beer, wine, and spirits. Which is good news for people looking for more variety in their choice of beer. Along with these changes, we have also seen a change to the wholesale liquor pricing model.
Unfortunately, this model has had a predominantly negative impact on private industry. We had the opportunity to hear from a very reputable General Manager of a well attended private liquor retail store and he had this to say:
“Like all other private stores that sell beer, the April 1 changes have impacted our business in a significant way. Part of the changes included a much smaller margin to generate profits from sales on a store level – where this was 16% before, this has been reduced to about 7%.”
It remains to be seen how these changes are going to impact consumers in the long run. But so far, it seems as though small and private businesses are shouldering most of the burden on their own, instead of proportional scaling up of consumer cost. This damages the craft ecosystem by putting in jeopardy the offerings and availability of product to the consumer and makes it difficult for small, local businesses to meet their operating costs. While this remains the state of affairs for the time being, it is seems to be only a matter of time before we see these wholesale increases passed on directly to the consumer.
In terms of direct and immediate impact, as of April 1st, the display price for beer and alcohol no longer includes taxes, which will now be added at the till. Here, the Government is attempting to hide the fact the prices are going up in many cases as a result of these changes. With pricing in BC already higher than Alberta or Washington, this additional tax is hurting both the industry and craft beer consumer. The wholesale pricing is pushing more consumers out of the province to make their purchases. Which could spell bad news for the budding craft beer scene in British Columbia.
Questions or comments? Contact our Advocacy Committee