Tuesday, July 10, 2012

Why does BC booze cost so much more than anywhere else? And why does BC government deny it?

BC beer, wine and spirits among most expensive in North America
Beer - or wine - or spirits - in BC among most expensive in North America 
-  Bill Tieleman photo, Merida, Mexico

And that's even before privatization of warehousing that may boost your bill. 

Bill Tieleman’s 24 hours/The Tyee column

Tuesday July 10, 2012

By Bill Tieleman

"Bill has a column, right -- so I'm warning you -- so if you tell Bill he's wrong, the chances are he's going to get a column out of if."
- Voice Of B.C. host Vaughn Palmer to Rich Coleman, B.C. liquor minister.
Do you believe the price of beer, wine and spirits in British Columbia is reasonable?
That B.C booze costs are comparable to other provinces and American states?
I don't, so I posed a simple question to Coleman on Shaw Cable's Voice of B.C. on May 31.
"Why do consumers of beer wine, and spirits pay among the highest prices in North America for those products?" I asked.
But Coleman immediately rejected my conclusion when Palmer asked: "Is he right about that?"
"Not really, no. We have a pretty comparable price structure to the rest of Canada," Coleman replied.
Oh yeah? I may only be a columnist and wine blogger, but I think the minister is wrong.
And some quick research on beer, wine and spirits prices indicates we often pay more -- sometimes much more -- than in other jurisdictions.
In B.C. government liquor stores, Labatt Blue beer costs $22.29 for 12 bottles, plus $1.20 bottle deposit, for a total of $23.49.
So how come in Chicago, Illinois, the imported Blue can be found for just $10.98 U.S. a case at Binny's private stores? That's less than half price!
Or why is it $18.50 a case in Ontario and $20.18 in Quebec at an IGA store?
And why does a Catena cabernet sauvignon from Argentina costing $21.09 in B.C. plus deposit retail at Ontario's government liquor stores for $19.95 and only $17.31 at private Calgary store Zyn?
How does Binny's in Chicago sell it for just $16.54 U.S.?
Coleman's corkers
Perhaps such price differences are why Coleman hedged his bets under questioning by Palmer after initially saying I was dead wrong.
Palmer: "He knows his wine, Mr. Tieleman, he's pretty knowledgeable about pricing, I think he might be right."
Coleman: "I don't think he is. I mean, we watch prices, there are some jurisdictions that have different pricing structures. You can go look at some types of liquor, some types of beer, whatever, and see differences between jurisdictions."
Palmer: "Bill has a column, right -- so I'm warning you -- so if you tell Bill he's wrong, the chances are he's going to get a column out of if."
Coleman: "He's not totally wrong because on some of it there is higher prices. A premium Scotch is higher in B.C. than it is in Alberta. But the floor price on some of our spirits is lower than in Alberta.
"So it's really how we tax it and how we take our revenues out of it, and in B.C. we make $900 million that goes into this fiscal plan for government, so that's where our pricing is."
Some B.C. prices are indeed lower than Alberta and other locations.
Let's drink Kentucky bourbon Wild Turkey for $28.95 a bottle in B.C., $28.25 in Ontario, $27.60 in Quebec -- or an easier to swallow $22.93 in Chicago.
That same bottle is $31.87 in privatized Alberta at a Calgary store.
But when one of the biggest selling beers brewed in Canada costs half the B.C. price in Chicago and $5 less in Ontario, I'd say someone's making a lot of windfall cash.
Higher prices for worse wine
Compare B.C., Ontario and Quebec's government liquor store profits.
B.C., as Coleman notes, makes about $900 million from selling liquor, while the Liquor Control Board of Ontario reported a $1.6 billion dividend to government from sales and the Societe Alcool de Quebec just announced a $1 billion net revenue.
But B.C.'s population is 4.6 million, Quebec's is 7.9 million and Ontario's is 13.4 million -- that's a lot more revenue per person from booze sales in B.C.
Yes there are differences between the provinces. Quebec allows corner stores and supermarkets to sell wine and beer; Ontario has the Beer Store run by big breweries as well as its stores while B.C. has a mixed public/private store network.
However none of that contradicts the higher prices in B.C. on some identical products.
Maybe that's fine with some B.C. drinkers -- and non-drinkers -- who prefer high prices that help fund government services while discouraging consumption.
But alternatively, high liquor prices are a regressive tax where lower income earners pay disproportionately more of their budget to enjoy a beverage.
It also means that those who drink are likely to purchase cheaper products because of the higher taxation and mark up rates. We pay more for crappier wine.
And despite Coleman saying his plan to privatize B.C.'s liquor warehouse operations won't mean consumers will pay still higher prices, I'm not convinced.
The new private owners will maintain a monopoly on the distribution and will also retain the unionized workers, plus find ways to make a profit -- all without increasing costs?
Here's one more clear reason I'm very dubious -- the same Catena wine priced at $21.09 at B.C. government stores is $27.99 in private B.C. Liquor Depot outlets -- 33 per cent more!
It all may drive me to drink.

.

19 comments:

Anonymous said...

Well, let's try posting one more time Bill, and see what happens.

One of our boys is working in Washington DC this summer. My husband and other son recently went to visit him. Beer was much, much cheaper than here in BC and when they came back they brought me a 60 pounder of Smirnoff vodka. Price? $19.95 at the liquor store, not duty-free, as they flew from DC to Seattle and then drove home. A 26er of Smirnoff in BC is $24.95.

Anonymous said...

The new private owners will maintain a monopoly on the distribution, AND it will all be done out of Alberta via TILMA.

There will be no "retained unionized" distribution workforce left in BC and that is how they will make their money.

Ron S. said...

That buffoon Coleman raised the temperature as soon as he opened his mouth. Did anyone else notice the cloud cover burn off? The man is a clown and hasn't had anything truthful come out of his bloated body since 2001 or earlier. What a bag of hot air!

Anonymous said...

Rmember when the NDP raised the tax on beer.

BC's finest whinery whining about wine.

Must be a slow start to the summer.

Anonymous said...

At what great day in the morning, have the Campbell/Clark BC Liberals, ever been honest about anything? Price gouging in BC is obscene. Heat, hydro, food costs, MSPBC up, ICBC vehicle insurance up, gasoline through the roof. It only stands for reason, liquor costs go sky high too.

BC is the most corrupt province in Canada. Not only do the BC citizens get ripped off by, the Campbell/Clark BC Liberals...We get ripped off by Harper too. Harper encourages Canadians to shop in the U.S. He even made it easier. It is so very true. We pay far more for our own goods, than other country's do.

I would say, boycott the BC liquor stores. That's exactly what I am going to do.

Anonymous said...

Stellar article Bill,thank you.Interesting to see how Coleman and his wingman Palmer handle facts when asked.

Miles Deighton said...

It really hurts the pockets of consumers when the BCLDB cannot get a discount from the manufacturer, such as with locally produced small-batch products or high-end scotches.

For instance, a bottle of Highland Park 18 year old is about $86 around most of the world. In BC it's $150. This isn't a "consumption discouraging tax" because mr. swill is going to buy the cheapest Vodka he can get. Merridale cidery on Vancouver island recently made a blog post describing how they get $140 out of a case of spirits that is $500 from the BCLDB.

By the way, Bill, you need to get one of your facts straight, and please, write a column against me for this if need be:

Private liquor stores are provided ONLY a 15% discount from the BCLDB relative to the prices we pay at government stores (And they cannot buy from anyone else) and are NOT ALLOWED by law to charge less than them! That means on a $100 bottle of champagne, the private store pays $85 and then they must cover private store costs, which will invariably be more since they do not have the wal-mart like operating and buying power of the BCLDB (or infinite tax revenue for operating costs).

They have to mark it up from that $85 to something that will make it worthwhile for them to carry the product.

BC's liquor laws make it near-impossible tough for pretty much everybody - including consumers of high end products who do not binge drink and carry most of the burden with BC's flat tax rate - and it appears as though Mr. Coleman and company indiscriminately like it that way.

Anonymous said...

"I would say, boycott the BC liquor stores. That's exactly what I am going to do."

Why not just boycott excessive drinking? Would mean less torn apart families, and much less of drunk drivers on the road.

But it's good to see Bill getting into the spirit of this issue.

A nice glass of chilled Baby Duck would be good right now...

e.a.f. said...

Baby Duck, oh no do they really still make that splonk?

The reason private liquor stores make a profit is they pay their workers much less than the government pays their workers. The private liquor store workers can barely pay their rent & groceries & have little or no disposible income.

Government liquor store employees are paid enough so they can live a decent life. They are the ones who support small busines because they actually have some money left after shelter & groceries.

Anonymous said...

You're also forgetting that government liquor store workers are BCGEU, which always wants high pay for the store workers.

and yes I would say government liquor store workers are paid enough to live a decent life. They should considering how much taxpayer money they get for slinging grog and scanning the bottles at the check out counter and his associate does nothing except put bottles into bags.

The UFCW worker at Safeway doesn't get that much.

DPL said...

Baby Duck, my God that's a blast from the past. BC wines used to be pretty awful for sure. Within a two block area of the provincial store over here, are two private ones and a lot of us ignore the higher prices, less option in those two places. The province wanted to get rid of their own stores so their friends could take over. People like Coleman don't like unions so are quite prepared to have the private guys hire young people at minimum wage.

kootcoot said...

"The reason private liquor stores make a profit is they pay their workers much less than the government pays their workers"

That and the fact that any such private outlet I've ever shopped at charged a premium of 15% or so at least over BCLB prices, making their only real value to the consumer the extended hours of sale.

I remember years ago reading an article about how a bottle of blended scotch wound up costing about $5.00 at the BCLB (which should give you a clue how long ago it was).

At that time a bottle leaving the distillery cost about 25 cents but then after VAT, export taxes, import duty and all the various taxes applied everytime the case was moved from a truck to a boat to another truck etc., it hit the BCLB at a hefty $2.50. Then the general markup at the joy juice store was a simple matter of doubling what ever cost it was at arrival, yielding a retail price of $5.00.

I know today quality single malt pre-historic scotch is much cheaper in the States, some states anyway. My youngest son who lives in BC always arranges for his older brother in Oregon to bring "gifts" of single malt when coming to visit.

I still think privatization would be worse, higher prices and grumpy underpaid employees. The example you or a commenter cited from Alberta demonstrates that.

By the way, it has been my experience that beer on the prairies, the Regina part at least would be too expensive at any price, I guess because they make it out of their barely potable water.......when I lived in Winnipeg I liked the beer there, better water?

PeterInEdmonton said...

Seriously, Bill, pinning BC’s expensive booze on the Liberals? I moved to Edmonton from BC in 1979 and liquor was been generally cheaper in Alberta for most of that, including under the last BC NDP administration and the Socreds.

I helped a work colleague stock his 1999 Vancouver wedding reception with XO by bringing some back at a huge (30%?) discount from the Superstore liquor store. Like all Superstore products, some booze is even cheaper if you buy in bulk. I also helped a BC manager buy 25-year-old Balvenie as a special bonus for a hard-working staffer from our excellent Chateau Louis liquor store.

The gap has closed in recent years, but like you I can still cherry-pick examples. For example, the last time I took your advice when we got together down there, I enjoyed a very nice glass of Kim Crawford Marlborough Sauvignon Blanc. Current price per BC’s web site: $19.99. Price at Edmonton Superstore Liquor Store: $18.89. Buy six or more for a unit price or $17.84.

I can also find higher prices for some products - I find Minister Coleman’s comments on price structure to be generally accurate.

But that’s the thing - you have to shop around, here. There are some stores that have good prices but limited selection (no Blue in Superstore) and others like the Chateau Louis liquor store here that have fabulous selection, and mid-level prices.

You leave out Saskatchewan, probably because it tends to be even cheaper than Alberta now and is no longer NDP. They list Wild Turkey at $28.49. Unlike Ontario, these are provinces within driving distance - good luck getting that booze back on the plane.

It is hard to compare the provinces online, because BC includes all taxes but not deposit in their catalogue, Alberta usually excludes GST in the posted price but appears to include deposit. I have calculated in GST in all of my prices posted here, but you might want to chop off a bit for returning the bottles. So the $22 I saw listed for a case of Blue was actually $23.10 with the GST but might work out to $21.90 after you take the bottles back.
Saskatchewan’s catalogue includes tax and deposit. I actually had to email Manitoba’s liquor board to find out whether their catalogue includes taxes. They don’t - You need to add 5% GST & 7% PST. So their apparently $27.29 Wild Turkey is actually $30.66.

Most readers must have snorted at Bill’s incomprehension on finding really cheap booze in the states - its been way cheaper in most US states than Canada longer than I could remember.

I think that BC in one area has a big price advantage because of their loophole allowing faux do-it-yourself wine-making shops, where I gather that the “makers” only have to sprinkle some ceremonial yeast into the mix and the store does all the rest. That’s where your honest working man can get his cheap buzz. As a wine lover, I implore you to lobby your friend Adrian not to close that loophole on his watch, the next time you have him over for a glass. Also ask him to work to continue to close inter provincial wine trade in support of Conservative MP Dan Albas’ efforts. I see no promise of a price decrease or even freeze on the NDP web site. Good luck getting any politician to reign in that cash cow.

Is your next posting going to blame BC’s environment minister for the winter rain in Vancouver?

Henri said...

Sorry I can't say one good thing in the defence of liquor, no worse curse on mankind than liquor, other than organized religion..

Anonymous said...

http://powellriverpersuader.blogspot.ca/2012/07/christy-clark-fuzzy-language-or.html

Anonymous said...

Sure,sure .... err.. "I mean, we watch prices, there are some jurisdictions that have different pricing structures."

Yeah, that's it, that's the ticket!!!

Anonymous said...

"Yeah, that's it, that's the ticket!!!'

If you drink and drive, you will get a ticket, and a fine, plus your car taken away for the day.

try to explain that to the company owner when you explain why the company car or truck is in the impound lot (and yes it does happen)

If you're going to want to barf beer and upchuck wine, do it at home with the keys locked up.

Of course you can digitally barf and upchuck comments here.

Sean Finnan said...

I live in BC and travel often to my childhood home of Edmonton, I can assure you with certainty, BC prices are about 40% higher then in Alberta. And the BC governments argument that higher prices are a deterrent is false - a $9 bottle of wine in BC can be as high as $11 in Alberta, yet the $35 dollar bottle may be as low as $18 in Alberta, proving that Alberta is doing more to keep addiction under control and less to punish the tax paying wine drinkers. A bottle of 14 year Oban in AB is $76, in BC is is $125 - is this even close?
Sean Finnan 604 562-6115

Yak said...

When I visit AB from BC, I always bring back multiple cases of cheap vodka (and other spirits) for mixed drinks. I haven't done it for a few years (just ran out) but last time I saved about $60/case of 12. You can save much more if you buy expensive brand name spirits.

Yesterday I went to the BC liquor store and the cheapest vodka to be found was $23.75. I walked out without purchasing any. Ridiculous. Some of these low end brands are routinely on sale at Superstore in AB for $16. So, you can easily pay 40% more in BC. Another great BC ripoff!