Craft beer lovers may suffer some sticker shock at B.C. liquor stores this month.
The B.C. Liquor Distribution Branch has jacked up the prices on several popular B.C. craft beer products.
Want to buy a 650-millilitre bottle of Driftwood’s award-winning Fat Tug IPA? You will need to shell out nearly eight per cent more than what it cost you before the B.C. government’s changes to wholesale liquor pricing.
On April 1, the LDB came up with standard wholesale prices for every product, which was designed to even the playing field for liquor retailers by eliminating a hodgepodge of subsidies given to different sectors of the industry.
In March, less than two weeks before her government brought in the new system, Attorney General Suzanne Anton accused critics of “beer mongering” for suggesting her new pricing formula would result in consumers paying more at the till.
“B.C. Liquor Stores expect no significant change to product pricing on their shelves in April as a result of the move to wholesale pricing,” Anton said.
Her prediction, for the most part, has come true.
Although prices have been increased on 87 per cent of the beer products being sold in B.C. Liquor Stories, most of them could be described as nominal — 54 per cent of the increases are less than five per cent.
You will pay a few more pennies for a 24-pack of Budweiser, $31.79 instead of $31.73, while Molson Canadian, Labatt Blue and Kokanee are mostly unchanged.
The price hikes on B.C. craft beer, however, can indeed be labelled “significant.”
B.C. craft brewers Parallel 49, Bomber Brewing, RB, Four Winds and Dead Frog all sell products that were hit with seven or eight per cent price increases on June 1. Gary Lindsay, director of marketing and sales for Victoria’s Driftwood Brewery, saw his entire line of beer get hit with a price hike of at least seven per cent without ever being consulted.
“The government looked at the numbers and thought ‘a lot of this craft beer is not very profitable the way we’ve done things, so we need to increase the margins here,’” said Lindsay. “The increase comes at the cost of the customers. We didn’t increase our price and we didn’t increase what we get paid by the LDB.”
B.C. private liquor stores, which used to receive a 16 per cent subsidy on wholesale costs, now pay the same price that B.C. government stores pay.
Ken Beattie, president of the B.C. Craft Brewers Guild, said many of the wholesale prices attached to craft beer rendered them unprofitable for private operators.
“As of April 1, the wholesale price [on B.C. craft beer] was too high and the retail markup too low. What you are seeing now is a correction in craft-beer prices to make the markup higher to make it more profitable,” said Beattie.
Beattie said his industry is worried higher price points and slimmer profit margins will make it tougher to get their product inside private liquor stores.
“We can see them not bringing in certain seasonals or certain other beers because private stores have to price them so high that they can’t sell. They can’t afford to have them sitting on the floor,” Beattie said. “The private retailers will eventually view craft beer as not profitable.
“No one is winning — not the breweries, not the retailers and not the customers. Although you could argue that the government is winning a bit more because they have raised the prices.”
The B.C. NDP, which provided the Vancouver Sun with a spreadsheet comparing June to March LDB prices, is calling on the government to take a second look at its new wholesale pricing system.
“When they brought in the change they promised beer prices would not go up and now 90 per cent of them have higher prices,” NDP Leader John Horgan said.
Anton did not respond to a request for comment.
The Ministry of Justice did respond with an emailed statement attributed to Liquor Distribution Branch spokesperson April Kemick:
“Like any retailer, B.C. Liquor Stores review prices on an ongoing basis to ensure products are priced according to market demand, profitability, changes in supplier prices, etc. In any given month, some prices go up and some go down. Minimal price increases — in the range of 20 to 50 cents — were applied to some beer in June, while in other cases, price promotions were applied, making products less expensive.
“B.C. Liquor Stores have always supported B.C. craft beer and continue to explore new ways to increase the profile of B.C. beer in stores, including through displays and in-store signage, marketing, beer-tasting events and more. These efforts have helped to contribute to steadily growing sales — in the past two months alone, craft-beer sales have grown by about 40 per cent in B.C. Liquor Stores.”
FOAMING OVER
• Hoyne Pilsner & Dark Matter 650 ml
March: $4.78 June: $5.09
• Phillips Blue Buck 6x341 ml bottles
March: $10.43 June $10.99
• Phillips Amnesiac Double 650 ml
March: $4.78 June: $5.29
• Lighthouse Race Rocks 6x355 ml cans
March: $10.57 June: $10.99
• Vancouver Island Piper’s Pale Ale and Hermann’s 6x341 ml bottles
March: $10.57 June: $10.99
• Moon Under Water Creepy Uncle Dunkel and Pott’s Pils 650 ml
March: $4.85 June: $5.29
• Spinnakers India Pale Ale 650 ml
March: $4.65 June: $4.99
• Driftwood Fat Tug 650ml bottle
March: $5; June: $5.39
• Nelson Paddywhack 6x355ml cans
March: $10.83; June: $11.79
• Bomber Brewing ESB 6x355ml cans
March: $9.88; June: $10.79
• Dead Frog Classic Nut Brown 6x341ml bottles
March: $10.65; June: $11.29
• Parallel 49 Gypsy Tears 6x341ml
March: $10.87; June: $11.29
• Central City Red Racer Imperial
March: $5.65; June: $6.29
