Canada: B.C. introduces minimum pricing for alcohol

Vancouver Sun

By Bethany Lindsay

February 25, 2016

B.C.’s new minimum price structure for alcohol is a good step toward protecting public health, but it also helps defend existing liquor stores from new competition, according to an addictions researcher.

The new rules will set minimum prices for each type of liquor at both private and government stores and will go into effect on May 1. A 750 mL bottle of wine, for example, won’t be priced at less than $4.83 before taxes, while a six-pack of beer cans must be listed above $6.79.

“This is to help ensure that liquor is not sold at prices that may encourage the abuse or overconsumption of alcohol, and establishes a baseline to ensure that prices remain at appropriate levels with a view to public health and safety,” Bill Anderson, a spokesman for the Ministry of Small Business and Red Tape Reduction, wrote in an email.

On a practical level, the new minimum prices will prevent private liquor stores from developing a niche market in the cheap sherry and high-strength beers favoured by many problem drinkers, according to Tim Stockwell, a University of Victoria psychologist and director of the Centre for Addiction Research of B.C.

“If one takes the view that having very, very cheap, high-strength alcohol available in the community causes problems, which is a view that I have … then it’s a positive thing,” Stockwell said.

It also means that government liquor stores won’t be able to offer deep discounts on unpopular products, so drinkers with odd tastes will no longer be able to buy that glazed-doughnut liqueur at 50-per-cent of the recommended sale price.

“That, I’m sure, is only done on health grounds, because it’s not so good for revenue,” Stockwell said.

The pricing structure is also a safeguard against competition from grocery stores now that they are allowed to sell alcohol, he added. Large chains are able to buy in bulk and sell with very thin profit margins, making it difficult for smaller stores and government outlets to compete.

“It’s a sort of pre-emptive strike,” Stockwell said.

Private liquor stores are also welcoming the new minimum prices as a good way of preventing grocery stores from using alcohol as a loss leader.

Jeff Guignard, executive director of the Alliance of Beverage Licensees, said he had absolutely no concerns about the pricing structure.

“As of May 2, when a B.C. consumer walks into a store, are they going to pay any more? No. 99.9 per cent of products are going to be the same price they are now,” he said.

As of May 1, the minimum liquor prices (excluding sales taxes) at government and private liquor stores will be:

. Beer: $3.19/L, or $6.79 for a six-pack of cans

. Keg beer: $1.97/L, or $115.64 for a 58.7 L keg

. Wine: $6.44/L, or $4.83 for a 750 mL bottle

. Cider and coolers: $3.75/L, or $7.50 for a 2L bottle

. Spirits: $27.88/L, or $20.91 for a 750 mL bottle

. Liqueurs: $20.39/L, or $15.29 for a 750 mL bottle