April 1, 2015
VANCOUVER – A string of broken promises leading to the release of the new liquor pricing system in B.C. makes for a tough April Fools’ joke for many retailers, producers and consumers of liquor in B.C.
“Prices aren’t going up” – Private cold beer and wine store edition
The government has released their new wholesale price listing for cold beer and wine stores, and the twelve private wine stores in the province. More than 20,000 of the new wholesale prices are more than one per cent higher than these stores used to pay for the same products before April 1, with a third of those showing increases higher than five per cent. Increases are most notable among craft beers, and wines priced at $20 and higher.
“Prices aren’t going up” – Government retail store edition
The government promised industry repeatedly they would issue the government store April 1 retail price list on March 20th. Despite the Attorney General saying the prices were “on the Internet”, they weren’t, and the full list of prices was not released until today.
This secrecy makes it impossible to determine if government store prices are going up significantly, or if government plans to take a significant loss on their retail operation overhead in order to keep prices roughly the same by selling products at margins lower than 17.2 per cent.
“No new licenses”
The Attorney General repeatedly promised industry that no new licenses would be issued, and then introduced Bill 22, the Special Wine Store Licence Auction Act last week. This proposed law paves the way for the government to auction off previously dormant licenses to sell B.C. wine in grocery stores.
The explanatory note to the bill says: “This Bill authorizes the general manager to conduct auctions for the right to apply for special wine store licences to be issued … These licences will authorize the sale, from locations approved by the general manager within specified grocery stores, of wine, cider and sake made from British Columbia agricultural products.”
“Level playing field”
The new licenses that the government plans to auction off carry the benefits of “VQA” licenses, which were established to give B.C. wineries an advantage when selling their products to consumers. The advantages of these licenses for licensees include discounts from government pricing of over 25 per cent, the ability to locate within one kilometre of other existing stores, and the ability not to pay for wine until it is sold to a consumer.
All other retailers under the government’s new rules get no discount, must not locate within one kilometre of other existing stores, and must pay for product up front before it sells to consumers.
The VQA licenses will auctioned off to the “highest bidders” and they will likely be located within one kilometre of existing cold beer and wine stores and private wine stores, putting those stores, often owned and operated by families or individual entrepreneurs, at a significant disadvantage. That is clearly not a level playing field.