New wine prices will pinch B.C. consumers

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      I’m working on this week’s column in a corner booth in the lounge of Cactus Club Cafe’s Broadway and Ash location and, frankly, I’m extremely frustrated. Don’t get me wrong—the food and service are on point, and when I glance up at the TV, the Canucks are leading the Senators by a couple of goals. Things should be good, right?

      What’s upsetting me is the B.C. government’s new wine-pricing system, which is due to take effect this coming April. This is the part where I beg you to stay with me. Hey, I know that crunching government numbers isn’t the most gripping of topics, but if you’re reading this column, this is something that affects you—and in my opinion, it totally, totally sucks.

      The long and short of it is that the provincial government is about to implement a major overhaul of the pricing structure of wine in B.C., and simply put, it’s gonna hurt.

      Up until now, there’s been a listed price for wine in B.C., the same price you see on government liquor-store shelves. Independent liquor stores have received a discount of either 16 or 30 percent off these prices based on their licence, and restaurants receive no discount whatsoever. (That’s another rage-filled column.) That wine you pay 25 bucks for at your local government liquor store costs any restaurant wishing to resell it 25 bucks as well. At the same time, restaurants aren’t permitted to purchase from private liquor stores, nor will that be allowed in the foreseeable future.

      Now, with the coming introduction of wine sales in grocery stores, the government is looking to bring in a new pricing structure that provides a base wholesale price for wine, leaving it open to all stores (grocery, private, government) to dictate the final selling price. Basically, the politicians arrive at this price by adding 89 percent to the first $11.75 of the supplier cost of a wine, and then a 67-percent markup on anything above that. What this means is that for stores to continue with their current profit margins, the new wholesale prices look to maintain the status quo shelf prices (or even offer a marginal discount) for wines currently listed under $15, but (and here’s the kicker) we could be seeing significant increases on everything else, even wines now priced as low as $15.

      There are countless consequences of this potential move, including a guaranteed spike in black-market purchasing of wine by local restaurants and consumers in Alberta, where product is significantly cheaper, which will add to that province’s coffers and hemorrhage B.C. tax income.

      But let’s look at this by referencing what’s right here in front of me at Cactus Club. I’m going to take some liberties by making some speculative calculations of price increases, based on a formula created by Mark Hicken, a Vancouver-based lawyer who specializes in wine law. I’m assuming that Cactus Club would want to maintain its current profit margin.

      Cactus Club lists California’s J. Lohr Seven Oaks Cabernet Sauvignon ($22.99, B.C. Liquor Stores) at $12 per glass. Under the new system, that government liquor-store price will hover around $29, immediately bringing that $12 glass to $15. Not into a California Cabernet or being so spendy? Germany’s Selbach “fish label” Riesling ($17.95, B.C. Liquor Stores) is a citrusy, delicious $9 glass of wine. Under the new system, we’re looking at about $20.50 in stores, and that $9 glass can easily go up to $11.

      Don’t assume that going by the bottle will ease any pain. Argentina’s Viña Chela Organic Malbec is $14.99 in government liquor stores and on the wine list at Cactus Club for $32—a standard markup of just over 100 percent. Come April, we’re looking at adding around $2.50 to the shelf price and potentially about $5 more on the list here, bringing it to roughly $37.

      Should this system be implemented, restaurants will likely take a major financial hit. Really, either it’s restaurants that are going to have to absorb way higher costs, or it’s going to be you. I’m guessing you don’t want it to be you.

      When the recession hit hard in 2008, we saw broad layoffs of hospitality-industry staff across B.C., along with the shuttering of many beloved Vancouver restaurants (Parkside, Aurora Bistro, Fuel, et cetera). The magnitude of these changes could easily dwarf the recession’s effect and devastate our dining landscape.

      Some will point out that wines under $15 will stay the same price, and that those hovering around the $10 mark could even be a tad cheaper. Hey, I’m not elitist. I’m kinda broke sometimes too, and I’ve certainly sipped my fair share of $10 to $15 wines. When I do enjoy these wines, though, I keep in mind that in exchange for me minding my budget, I’m consuming industrial, factory-produced product that’s often built on the back of shoddy labour practices, unsustainable farming methods, and padding the pockets of multinational corporations.

      You get what you pay for, and people will likely flock to these types of wines once this system rolls out, when preferred styles are priced out of their weekly budget. Consequently, this new system will punish honest farmers, independent producers, those who put pride in their work via ethical farming and business practices, and, simply put, decent-quality wine. It also punishes you, the consumer, in stores and in restaurants.

      There are many of us in the industry who aren’t going to take these changes lying down. Hopefully, local wine-lovers won’t either.

      B.C. attorney general Suzanne Anton and MLA John Yap are spearheading these changes. Find them on Twitter at @SuzanneAnton and @John_Yap.




      Dec 10, 2014 at 1:34pm

      Kurtis, you've got it all wrong! The government is graciously levelling the playing field for the benefit of us consumers. Just look how well happy hour and grocery stores liquor sales turned out!

      Ed Sadowski

      Dec 10, 2014 at 1:35pm

      This is tax grab by stealth! We should sick Bill Vander Zalm on this.
      Just imagine what this will do to BC wineries, where the majority (in fact almost all) of their product currently sell for more than $15.

      This is exactly the over-egged mess one can expect from government bureaucrats to cook up. Yet another reason for the government to get out of the alcohol distribution business as Alberta has.


      Dec 10, 2014 at 1:58pm

      Got to keep the Cactus Club profit margins! If people aren't drunk enough, they might notice the quality of the food!


      Dec 10, 2014 at 1:59pm

      Im a wine buyer. Id call myself a significant wine buyer defined as someone who collects, and ages wine. That said i never turn my nose to low priced quality wines.

      Here is what I have to say about this: All my wine purchasing is being moved to Alberta. You would have to be an financial moron to buy wine in this province. I hate to say it but people who can afford to buy quality wine arnt stupid with their money, and will not pay these local prices (i know I talk to a large number of them).

      BC ALREADY had the highest prices wines in North America BEFORE this increase FYI.

      Table wine at resturaunts only me. If I want something good ill stay home and pop the cork of something i brought in from Alberta.

      Jim P.

      Dec 10, 2014 at 2:56pm

      Bradley: I can't tell if you're being sarcastic but regardless of your thoughts on happy hour, the proposed changes were done hastily and without consultation. There are better ways to change the wine-pricing model that would allow for the government to keep its revenue, while not raising the prices of wines over $20. This isn't an elitist issue. It's a middle class issue.

      Linda Holford

      Dec 10, 2014 at 3:15pm

      From reading the comments from those wanting to buy from Alberta. Why not help the smaller producers and BC wineries. Buy directly from the winery or buy from the private liquor stores, where the smaller producers are able to market their wines to.

      As Kurtis put it, "Consequently, this new system will punish honest farmers, independent producers, those who put pride in their work via ethical farming and business practices, and, simply put, decent-quality wine. It also punishes you, the consumer, in stores and in restaurants."


      Dec 10, 2014 at 5:18pm

      Expecting the BC liberals to have clue about small business margin and management is like hoping water turns to wine, have they ever come up with anything remotely based on what the market needs vs. what they 'think' it needs?


      Dec 10, 2014 at 5:20pm

      Whatever. Nobody needs to drink alcohol.

      You lost me at

      Dec 10, 2014 at 5:24pm

      "Cactus Club Cafe’s Broadway and Ash location and, frankly, I’m extremely frustrated. Don’t get me wrong—the food and service are on point"

      since when does ANY Cactus Club have good food or service????
      You need to get out more.


      Dec 10, 2014 at 6:20pm

      Why would I buy local wine if a.) there is no incentive to buy local b.) BC wines are WAY over priced when comparing it to similar priced wines from France, Italy or Spain. BC wine is a tourist trap product.

      Seriously, does it make sense that this price increase will also raise the pricing when buying the wine from BC wineries direct? I dont blame the local wineries for the increase. They are also a victim. I do blame them for their poor value when considering the price you pay for the lack of quality you get.

      Value first.