By Jeff Nagel
The province’s latest liquor reform will make it easier for wine stores to relocate into grocery stores – provided they offer only B.C. wines – but there’s no sign the government is rethinking its change to wholesale wine pricing that will sharply drive up the price of more expensive bottles.
Friday’s announcement by Justice Minister Suzanne Anton in Langley at Chaberton Estate Winery is being hailed by B.C. wineries because some supermarkets that can begin selling wine come April will be barred from stocking foreign wines.
Under the change, existing VQA and independent wine stores can relocate or transfer their licence to an eligible grocery store as long as 100 per cent B.C. wine is sold. Those licence transfers won’t be limited by a rule that disallows new outlets if there’s an existing one within one kilometre.
Liquor policy reform leader John Yap called it a “winning combination” to allow grocery shoppers to also buy B.C. wine and support the local industry.
“The B.C. wine industry is entering into a new era of winemaking,” added Chaberton co-owner Eugene Kwan.
The new model is different from the store-within-a-store model in that it allows B.C. wine to be on regular grocery store shelves and shoppers would pay for it at designated registers staffed by trained employees who are at least 19.
Anton said a limited number of new licences – she would not specify how many – will be made available to sell just B.C. wine in grocery stores.
The extra licences will mean more competition for private wine stores that have already been critical of some of the province’s liquor reforms.
Vancouver lawyer Mark Hicken, who acts for wine industry clients, predicts there will be “no takers” on wine stores relocating under the new B.C.-only model because they would lose most of their international product lines.
Hicken said the B.C.-only rule may violate Canada’s international trade agreements.
Pricing change worries restaurants
A major concern for wine stores and B.C. restaurants is the change unveiled recently to the province’s wholesale pricing formula for wine that ends the discount advantage for independent wine stores.
It may mean little change or even cheaper prices for wines that now cost $15 and under. But the final retail price of pricier bottles is expected to rise sharply come April, in both private and government stores, and in restaurants.
Wine industry lawyer Mark Hicken has estimated wholesale prices in B.C. will rise 12 to 29 per cent on higher-end wines as a result of the change.
He estimates a bottle that now retails for $30 will be priced at $33 to $40 under the new model, and the price hikes could be 25 to 50 per cent on the most expensive bottles that now go for $100 and up.
BC Restaurant and Foodservice Association president Ian Tostenson said restaurants must pay retail prices and usually charge their patrons double, so the price of a nicer bottle when having dinner out will soar, putting more pressure on an already struggling service industry.
Tostensen said restaurants are bracing for 10 to 20 per cent wine price increases on bottles over $17 or $18. He hopes the province will realize it has made an error and correct the wholesale pricing formula.
“I think they’re going to do some adjustments,” he said. “This is supposed to be a revenue-neutral exercise. Government doesn’t want to be seen to be putting prices up. So there seems to be a miscalculation somewhere.”
In a statement emailed by her staff, Anton said the standardized wholesale price is to level the playing field for all liquor retailers and enable more competition.
“Trying to guess what each individual retailer will charge per product at this point is complete speculation,” she said, predicting consumers will see little if any change for most products.
Anton said the province is watching to ensure the new policies have no unintended consequences.