As April showers roll into Metro Vancouver, students are likely to roll out some extra cash when purchasing a six pack or a bottle of red for their end-of-term parties.
The Liberal government’s initiative to increase taxes on wine and allow certain liquor retailers to move into grocery stores has local bar and liquor store owners wondering how they are going to keep their heads above water.
According to Business in Vancouver, markups under the old, two-tiered tax system created a retail price for each bottle of wine, which was then reduced by different percentages to create a of variety wholesale prices depending on the retailer. The new system, which began on April 1, offers a similar set of markups, but instead of the formula adding up to different retail prices, it now adds up to a universal wholesale price that applies to all wine retailers, public and private.
According to Minister of Justice Suzanne Anton, “the new wholesale pricing model is about enabling more competition in the marketplace,” meaning that privately-owned and government-funded retailers will be forced to compete with one another.
This is definitely more problematic than it may seem. Vancouver wine lawyer Mark Hicken suggests “government stores will likely lose money system-wide with the new margin structure if end consumer prices stay the same.” If government stores can no longer compete, then the Liberals’ plan will result in a weaker public system that may eventually lead to full privatization — something that I feel isn’t in the best interest of British Columbians.
This system contradicts the idea that changes were made to enhance the billion dollar industry.
Another major change is that grocery stores will soon start to phase in liquor. The BC Liberals have created a lottery scenario that will select liquor stores to relocate to grocery aisles, guaranteeing the success of those lucky businesses but likely taking down other retailers in the area.
The Tyee states sheds light on Suzanne Williams, a very unhappy local bar and liquor store owner. She feels the government has not adequately explained the complexities of the new system to her, and has put forth an unfair timeline for the lottery application, as she received her application a mere day before the lottery began. Moreover, its exhaustive list of requirements has her shaking her head at the lack of communication the government has had with liquor retailers.
We are moving into a system rife with complication and inequalities that will affect consumer prices as well as liquor store operators and employees. This seems to contradict the idea that the changes were made to enhance the billion dollar industry.
Without a doubt, vendors will do everything in their power to keep their prices low. This may not be difficult for small private businesses that are willing to relocate and cut wages, but the fact remains that the government is failing a whole lot of stores, bars, and private retail owners. Anton has justified this initiative to the public by suggesting that it will “level the playing field,” but you don’t have to look hard to see how unfair, unjust, and deceitful these changes really are.
The BC Liberals have unveiled a confusing and chaotic system that appears to have no real winners. Anton suggests that it’s impossible to see how the change will affect businesses, and that the government should not be blamed for any future inflation. But it seems clear to me that these supposedly ‘modernized’ regulations do nothing but add stress and disarray to one of BC’s most lucrative industries.
