Government to let restaurants buy alcohol at wholesale prices
VICTORIA — The B.C. government will allow restaurants to purchase liquor at wholesale prices, reducing alcohol costs by up to 25 per cent and letting businesses bolster their profit margins during the COVID-19 pandemic.
Attorney General David Eby said Tuesday the change, effective in July, will help restaurants stay financially viable as they struggle with seating and customer restrictions required by public health officials.
Currently, businesses buy liquor at the same retail prices paid by ordinary customers at liquor stores.
The change is temporary and will be reviewed in March. Government will forgo $50 million in revenue this year due to the decision, said Eby. The average price reduction for restaurants is 20 to 25 per cent, said Eby.
“It’s temporary because it is costly and there are competing demands for government expenditures,” said Eby. “But for everybody it’s very clear this was something that was necessary given how many people work in the hospitality industry.”
Restaurants will not be required to lower their liquor sale prices after receiving the discount, meaning they can continue to charge the same amount on menus for beer, wine and spirits but make more money per sale.
“I suspect the vast majority will be using this as a profit margin on the sale of a drink to fund expenses like rent and staff wages with significantly reduced traffic coming in their doors,” said Eby.
The food and hospitality sector has been hard hit by the pandemic, with in-restaurant dining banned from midMarch until earlier this month. During the peak of the crisis, as many as 180,000 of the 190,000 workers employed in B.C. restaurants had lost their jobs.
The sector has long called on government to make the wholesale pricing change, saying it is unfair that restaurants and bars have to purchase alcohol at the same retail price as consumers.
Eby said the government had been working on a lesser liquor discount for restaurants before the pandemic, but abandoned those plans once it saw the financial hardship many businesses were facing due to COVID-19.
Restaurants will also be allowed to continue to sell liquor with takeout orders, said Eby.
The move was widely praised by the hospitality sector Tuesday, which has been advocating the policy change for 20 years.
“This is probably the biggest change in a generation in liquor policy in the province, it’s that big,” said Ian Tostenson, president of the B.C. Restaurant and Foodservices Association. “It’s absolutely historic. And it’s been talked about for years.
“It’s really going to give a lot of help and hope to the industry.”