Price increases create bottleneck for brewers

News Provincial

The Liquor Distribution Board (LDB) of B.C. changed its pricing model on beer, with the previous three-tiered system falling to the wayside. A wholesale model was introduced in April and prices were hiked up on June 1. Which, for Gary Lindsay one of the Partners at Driftwood Brewery, came as a bit of a surprise. “We didn’t know about it until June 2 when someone told us.”

Graphic by Niusha Derakhshan
Graphic by Niusha Derakhshan

Seventy-four products were increased by 10 per cent, and 123 products saw a five to 10 per cent rise — any of these products being B.C.’s own craft beers. “Officially it’s one of those unofficial taxes,” said Lindsay. “It is a price increase but the suppliers aren’t getting more money for that price increase . . . ” Instead the government is taking in the money from that increase. “I would say that’s sort of an indirect tax, right?”

No one enjoys a price increase, but a representative from the Lansdowne Central Liquor Store in Kelowna, B.C. said in an email that, “I think at first it will affect us somewhat,” but that it won’t last long. Customers go to her store specifically to try the seasonal releases from B.C.’s craft breweries, which is a luxury that the government-managed liquor stores rarely get to enjoy.  “I think it will piss off people,” said Lindsay, “but on the other hand, craft beer consumers are a different group. They’re not price driven so much.”

Driftwood was planning on doing a price increase prior to the Government’s price hikes. In two and a half years they have seen their margins thin with no price changes. When the prices were spiked by the LDB, Lindsay said, “We can’t really increase our prices now . . . We ended up making less margin than we were before and we don’t really feel it’s justified to the consumer to increase our prices again.”

B.C. Liquor Store was mandated a few more changes along with the wholesale pricing: Sundays will now be included in their operating hours, and B.C. wine will be offered in some select grocery stores. In those stores, a Serving It Right-certified cashier would be open for those wanting to put wine on their grocery bill.  The press release did not mention putting craft beer on the shelves of those grocery stores.

Media agencies have had difficulty interviewing B.C. government officials on the legislation, but Attorney General Suzanne Anton was quoted in the Tyee, saying that the government is focused on “creating a competitive marketplace that will benefit consumers.”