LIQUOR PRICES HARD TO SWALLOW.

Owning a profitable bar or restaurant is challenging enough at the best of times. Margins are notoriously thin — hovering around the three to four per cent range — and many don’t survive past the first year. If you’re a liquor licensee with beer, wine or spirits on your menu, you uncork a whole new set of challenges. This is where governments really slam the door on hospitality.

From prohibition- era liquor laws and exorbitant pricing to illogical policies and red tape, the obstacles in front of a bar or restaurant owner can be mind-boggling. One of the biggest head- scratchers is price. In most provinces, there’s no or limited wholesale pricing for business owners: They pay the same price that you and I do when we walk into our local liquor or beer store. In some cases, licensees have to pay full price even if an item is discounted for consumers! The system makes it extremely difficult to provide the value consumers are looking for.

Every other product can be purchased by a business owner at a wholesale discount. Why not beer, wine and spirits? So far, Alberta is the only province with true, across-the-board wholesale pricing for licensees.

Restaurants Canada has just released its second Raise the Bar report card on provincial liquor policies. It rates each province on several factors, including price, selection, licensi ng and regulation of beverage alcohol. Alberta comes out at the top of class, but only with a “B” grade. While the province offers wholesale pricing, it recently cancelled plans for a review of outdated liquor laws and instead added new costs for licensees.

Newfoundland and Labrador is at the bottom of the class with a Dminus. One of the key concerns is a liquor monopoly that has the conflicting roles of supplier, competitor and regulator.

In compiling the report, we heard some interesting stories from Restaurants Canada members, for example, a bar owner who is located right across the street from a craft brewery. Instead of crossing the street to buy that particular beer, he must place an order through the provincial liquor board. Then the craft brewer has to ship the order to a distribution centre 45 kilometres away, and the liquor board ships it back to the bar — with a delivery fee tacked on to the price.

There are dozens of other provincial policies and regulations that are equally hard to swallow. And our federal government has added two more to the mix.

First, the government quietly introduced a new escalator tax in its last budget, meaning that the federal excise tax on beer, wine and spirits will automatically rise with inflation, every year in perpetuity. That adds up to a half-a-billion-dollar tax increase in five years — without a vote in parliament and without regard for the economy.

Second, the federal government, in conjunction with the provinces, explicitly excluded beer, wine and spirits from the Canada Free Trade Agreement. Gerard Comeau, who was prevented from bringing beer that he purchased legally in Quebec back to his home province of New Brunswick, is taking the issue to the Supreme Court in early December. We’ll be watching this case with interest.

If Canada truly wants a hospitality industry that welcomes the world, it’s time to treat bars and restaurants as valued businesses in our communities. It’s time to move beyond our antiquated liquor framework.

After all, licensed restaurants and bars account for 48,000 businesses, directly employ 560,000 Canadians, and generate $ 8.2 billion a year in economic activity. And with profit margins hovering around three per cent, most of that money is re-invested in the community. Bars and restaurants do more than serve food and drinks. These are businesses that revitalize neighbourhoods, attract tourists and visitors and provide a safe, regulated environment for customers to enjoy a drink with friends.

Undoing policies that are rooted in prohibition-era thinking takes time. The only question is, who wants to be at the top of the class in the next Raise the Bar report?

Shanna Munro is the president and CEO of Restaurants Canada, a not- for- profit association that represents the restaurant and foodservice industry. www. restaurantscanada.org.

IN MOST PROVINCES, THERE’S NO OR LIMITED WHOLESALE PRICING FOR RESTAURANT OWNERS.