British Columbia·FACT CHECK

B.C. Liberals accused of secretly imposing 'hidden booze tax'

A report comparing 156 randomly selected products sold at BC government liquor stores shows retail prices have risen 11 per cent since BC Liberals implemented reforms that they said would not hurt consumers.

NDP report shows prices up 11% since B.C. liquor reforms

'When a big brand goes up a few cents, it's a lot of money,' said John Clerides of Marquis Wines, holding a popular bottle of Concha y Toro Sauvignon Blanc. Its price rose nine cents. (Natalie Clancy/CBC )

A report comparing 156 randomly selected products sold at B.C. government liquor stores shows retail prices have risen 11 per cent since the B.C. Liberals implemented reforms that they said would not hurt consumers.

The NDP,  which commissioned the report, says the increases are due to B.C. Liberal liquor policy reforms in 2015.

CBC's Fact Check team tried to verify the pricing comparison but B.C.'s liquor board deletes price history from its online catalogue and no longer publishes a printed version.

But a survey of industry insiders and producers found unanimous agreement that government pricing is to blame.

"It's a hidden tax. It's as simple as that," said John Clerides, president of Marquis Wine Cellars, a private wine store in Vancouver's West End.

"They just screwed the small retailers and the consumers," Clerides said. 

He said officials have arbitrarily raised prices on most products, except the most popular items.

For example, a bottle of Concha y Toro Sauvignon Blanc only went up nine cents, but a bottle of 21-year-old Glenlivet scotch went up $112.09, or 64 per cent, to $285.99.

The same bottle is $45 cheaper at an Ontario government liquor store.

Two years ago, the province introduced liquor reforms which included a new wholesale pricing model for public and private liquor stores. At the time, the government said these changes would not hurt consumers.

Comparison of beer prices showed price hikes of .6 per cent to 34 per cent since 2015. The average beer price increase was 13.3 per cent. (Natalie Clancy/CBC)

The NDP hired an alcohol consultant who keeps data to review pricing but the consultant did not want his name released for fear of retaliation. 

"People worry if they are publicly criticizing  the government over liquor policy, that they might have trouble getting liquor licenses for their clients ... they don't want to put their names to it but the data speaks for itself," said David Eby, NDP candidate in Vancouver Point Grey.

CBC spoke to several wineries, breweries and importers who did not want to be named for the same reason.

Nearly all said they did not raise their wholesale prices, and that the liquor branch has been arbitrarily raising retail prices to maximize profits.

BC  liquor prices up since 2015

  • Beer up 13.3 per cent
  • Wine up 11.6 per cent
  • Spirits up 10.7 per cent
  • Coolers and ciders up 10 per cent

"Generally the wholesale price has remained the same for the last two years," said Ken Beattie, executive director of the Craft Brewers Guild, which represents B.C. booming craft beer makers.

CBC found one example of a winery that raised the price of an ice wine, but could find no other explanation for all the other price increases listed in the study.

Revenue rises along with prices

"That correlates almost directly with a 12 percent increase in revenues to government from alcohol. It's quite clear what it is. It's a hidden beer tax," said Eby.

Those numbers are from B.C.'s Liquor Distribution Branch (LDB)'s annual service plan, which projects the liquor branch will generate $3.3 billion in sales, and contribute more than a billion dollars in provincial revenue this fiscal year. 

The B.C. Liquor Distribution Branch controls the wholesale and retail price of alcohol, as well as who can buy and sell it in the province.

"The most galling thing to me is that this was done secretly," said Eby who believes the government's control over retail and wholesale pricing and policy is unfair to private stores and consumers.

'They were dishonest with the public,' said David Eby of the B.C. Liquor Distribution Branch after a study found prices have risen 11 per cent since 2015. (CBC News)

"They gamed the system to secretly increase the cost to consumers, all the while claiming that they weren't increasing prices."

LDB will not answer questions about pricing or retaliation because its public servants say they can't comment publicly during provincial election campaigns.

Clark says sales are up

Christy Clark agrees revenues have increased but she has a different explanation.

"Our wine sales have gone up and our beer sales have gone up," said Christy Clark in response to questions from CBC News.

"We have seen a massive 400 per cent  growth in craft beer in B.C ... a huge expansion in the numbers of wineries in our province that has created thousands of jobs as a result of liquor reforms we have made, not as a result of high taxes," said Clark.

But Eby said the sales volume only increased by 4.7 per cent last year, not enough to account the soaring revenues.

"Yes they did sell more products but that doesn't nearly make up for the 12 per cent increase in revenues and that came from raising the price of beer and wine," he said.

B.C. Liberal leader Christy Clark places wine bottles in a case as she visits Gray Monk Winery during a campaign stop in Kelowna. Her campaign message: 'Our wine sales have gone up and our beer sales have gone up'. (Jonathan Hayward/THE CANADIAN PRESS)

This was a made-in-Victoria recession.- John Clerides, Marquis Wine

"They took business away from private wine and liquor stores through policy, this was a made-in-Victoria recession for the stores, it had nothing to do with outside market forces," said Cerides, who is angry that Clark attributed increased profit to higher sales.

Clerides believes profits are up at government stores at the expense of private stores like his that are not allowed to open on Sundays or sell to restaurants and hotels.

'Rogue' liquor board

"I've worked in almost every market in the country and I've never seen a liquor board, a government agency allowed to run rogue like this where they are just  defining things as they go and raising prices arbitrarily. It's shocking," said an importer who asked that he not be named.

Comparison of wine prices showed price increases by as much as 44.6 per cent. The average wine price increase was 11.6 per cent. (Natalie Clancy/CBC )

The new prices exclude tax, which is now added at the till.

"That was a smokescreen that confused the consumer and they have been able to somewhat hide these tax increases," he said.

A group that represents B.C.'s 690 private liquor stores believes prices will soon stabilize.

"The big jump of approximately ten per cent that people have seen is not going to continue as this is more of a market correction," said Jeff Guignard of the Alliance of Beverage Licensees.

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With files from Manjula Dufresne