Beverage prices something to get hot and bothered about
HOW COULD IT BE summer without taking issue with the high prices related to obtaining a refreshing adult beverage?
If you stopped by a liquor store this week, you may have noticed wine prices on the rise ... just as the weather reaches the point where a nice rosé would hit the spot. That would be the result of the nanny state – i.e. the Wynne government – sticking it to consumers yet again.
Measures from this year’s provincial budget kicked in, adding two per cent to the cost of a bottle of wine. The tax is moving from its current rate of 65.5 per cent to 67.5 per cent for Ontario wine, and from 71.5 per cent to 73.5 per cent for imported wine.
The tax will increase a further two per cent in 2017 and 2018, and by one per cent in 2019, when the minimum cost will be $7.95 for the same 750ml bottle available for a few dollars south of the border.
When other taxes are added, an Ontario wine maker will now receive only $4.27 on a $10 bottle of their Ontario wine. The other $5.73 of the price goes to taxes and bottle deposits. Things are even worse for imported wine, where the pre-tax price of the wine is only $3.44 on a $10 bottle, reports the Canadian Taxpayers Federation, always keen to track such things.
Beer and spirits are also being swept up in the move to separate Ontarians from their money.
That’s the reason there’s ongoing contempt for the government in general and, specifically, with a longstanding dissatisfaction with the handling of alcohol sales in the province, from absurd pricing to rigged sales restrictions.
Much of the ire is simply a reflection of our inherent dissatisfaction with the LCBO and paternalistic liquor laws, coupled with our distrust of pretty much anything overseen by bureaucrats and politicians. Tax increases are seen as another reason to privatize the operation, stripping government of its outdated controls of alcohol.
Yes, the stores themselves have come a long way over the years. They’re much nicer places to shop, especially compared with the Beer Store, that even more antiquated governmentsanctioned cartel selling us our suds. The hours have been extended, but there’s nothing like the convenience found in other jurisdictions. Nor the selection. And, most gallingly given that the LCBO is the world’s largest buyer of spirits, nothing like the much better prices found elsewhere.
If the LCBO really wants to be accepted, cut the prices significantly, offer a much better selection (something akin to a grocery store in Buffalo would be a start) and offer more convenience.
The province, of course, has no interest in any of that.
With alcohol, as with cigarettes, governments suffer from multiple personality disorder. On the one hand, they’re addicted to the revenues, on the other they want to discourage consumption. The nanny state prevails, but they do love the money. (There’s a similar issue with gasoline, electricity and water, where governments preach conservation, but decry the losses when we actually cut back.)
The nanny state is never more apparent when it comes to booze. Ontarians apparently would become hardened alcoholics without minimum pricing and fettered access. All we have to do is look at the problems in nearby provinces and states to see that. Oh, wait, that’s not what you’ll find. And the government doesn’t want you to look elsewhere, lest you become even more upset about the poor state of things here. Disillusionment is bad for the business of re-election.
With its modernization efforts, the LCBO is trying to suck and blow. If the goal is about marketing to boost sales, then that runs completely contrary to a host of regulations (nanny state, remember?) to make alcohol more expensive and less convenient to obtain.
Privatization is not the cure-all, however. As we’ve seen elsewhere, that can and often does lead to higher prices, less selection and, over time, control concentrated in fewer hands.
What’s really needed is a cultural shift to something more European in flavour when it comes to booze: treating adults like, well, adults. Lower prices would be a start, as would allowing some competition in the form of specialized stores that could offer up some of the huge list of products the LCBO seems disinclined to stock (see the craft beer or whisk(e)y selections of some small U.S. shops, for instance).
Touching on the longstanding debate, if beer and wine were sold more widely in grocery and convenience stores (the government is trying this as a PR stunt, rather than an actual change), it would benefit smaller breweries, which are now dependent on a retail channel owned and controlled by their much larger competitors.
Pricing is a big issue. In parts of Europe, you can find very drinkable wines for under $3 a bottle. Imports from Australia and the U.S. that run $15 to $20 here can be had for a third of that price. That tells you it’s all about markup and taxes – as noted, successive spendthrift governments are addicted to the LCBO profits, not to mention the tax revenues.
Where we might be inclined to drop a few bucks on a new Ontario wine or craft beer, the government’s pricing often precludes that option. Backwards policies make it even more difficult for upstarts to reach consumers. As a consequence, the industry suffers.
The province has no interest in consumers or small producers. Next time you’re in the U.S. seeing what real options are like and fuming over the one-bottle limit at the border, keep in mind that pricing in Europe, though varied, is mitigated by an EU customs agreement that allows each person to transport 110 litres of beer and 90 litres of wine and 10 litres of liquor from one member country to another on every trip.
That’s a fact that’ll leave you crying in your (overpriced) beer... or wine, should it still be in your budget.