Canada: BC Wholesale Pricing Reform On The Horizon?

Last Updated: September 29 2014
Article by Geoff McIntyre

This article was originally published on Canadian Grapes to Wine.

Last year, when the BC government announced it was seeking public input in to a comprehensive review of the Province's liquor policy, many in the wine industry (both producers and retailers) hoped the review would lead to changes to BC's wholesale pricing system for wine. Critics of the current wholesale pricing system have said that the current system is hard to understand and results in many layers of tax that are buried in the retail display price. The end result is high consumer prices, particularly in bars and restaurants. They say the playing field is not level for all retailers due to the different discount factors. Finally, some experts wonder whether the practice of rebates to producers of BC VQA wines would withstand scrutiny under international trade agreements, since it favours BC wines over imports.

BC has a mixed retail delivery system for liquor. While the government controls all aspects of licensing and wholesale distribution of alcohol, the retail sector is comprised of a combination of government liquor stores and privately-owned licenced retailers (private stores, restaurants and bars, and manufacturers with tasting room licenses). When it comes to BC wine, retail prices are set by the winery. This may be done in conjunction with the BC Liquor Distribution Branch (BCLDB) when the winery is seeking a listing in a government store. A price and a SKU is registered with the BCLDB for each individual product. The retail display price includes Federal GST (5%) and BC PST (10% for liquor). There is no true "wholesale price" that a winery charges to a licenced retailer. Instead, the wholesale price is determined by backing out the taxes (mentioned above) from the retail display price as well as a LDB mark up, which is currently 117% for BC table wine. The BCLDB has a program that rebates a portion of this mark up to producers of BC VQA wine as an incentive to sell through the government store channel.

From there, private retailers get a discount which varies depending on the type of licence. Licenced retail stores get a discount of 16% from the LDB wholesale price. Independent wine stores get a 30% discount and a small group of Rural Agency Stores get a 12% discount. Licenced retail stores (LRS) get a 16% discount while licenced establishments such as restaurants and bars get no discount. They pay the full LDB retail display price less the 5% GST and 10% BC PST. Restaurant and bar owners must mark up their prices more than normal to cover higher purchase costs resulting in prices that leave many visitors to the province will a case of sticker shock.

During public input, several key stakeholders had included recommendations regarding the current system in their BC Liquor Policy Review submissions. Here is a summary of the key points on wholesale pricing outlined the submissions of some of the BC industry's stakeholders:

Modernize Wine British Columbia

  • The current system is complicated & results in high consumer prices in the medium to high categories (motivating consumers to seek cheaper, imported wines)
  • The system does not treat retail level licensees equally
  • The fact that LDB pricing formula/ mark up combines both a government revenue element and a built in profit margin does not promote efficiency or competition
  • Wineries must adopt the "wholesale discount" policies and therefore are denied a normal economic pricing model
    • Replace current system with simpler flat tax or percentage-based tax
    • Implement the same wholesale price for all retailers
    • Keep policies which support BC producers

Canadian Restaurant and Foodservice Association

  • Licensed establishments are unfairly disadvantaged. Decreasing restaurant sales ultimately decreases government revenues
    • Move to an Alberta-style flat tax
    • Implement a 16% wholesale discount for licensed establishments
    • Increase Licenced retail store discount from 16% to 20%

BC Wine Institute

  • The current Ad Valorem system is fair & consistent
  • Move to a volume-based flat tax would favour high-end import wines at the expense of medium priced BC wines
    • Keep the system as is

BC Estate Winery Association

  • The Current Quality Enhancement (QEP) & VQA Support programs are critical for BC wineries
    • Keep the current system but reduce PST on liquor from 10% to7%
    • Apply PST & GST at the till

BC Restaurant and Foodservice Association

  • A flat tax works better in a fully privatized retail environment (like Alberta). It is not realistic in a blended retail environment like BC
    • Keep the current system
    • Give licensed establishments the same 16% discount as LRS stores

The BC government released its Final Report from its BC Liquor Policy Review in November 2013. It contained 73 recommendations, but despite submissions on the topic, there was no mention of changes to the wholesale pricing & distribution system. However, a BC government March 6, 2014 Press Release, dealing primarily with the concept of allowing liquor sales in grocery stores and farmers' markets, the government made the following comment:

"The B.C. government will be developing a new price-based wholesale pricing model for wine and spirits distributed by the Liquor Distribution Branch, so that the price all liquor retailers pay is consistent across the board"

It appears that the BC government is committed to making changes, but any revisions to the current wholesale pricing model in BC will have to meet two important criteria set out by the Liquor Policy Review:

  • Revenue neutrality – the costs associated with any reforms or changes must be less than or equal to the incremental revenues to the government, and
  • Any changes must respect existing obligations under collective agreements and interprovincial/international trade agreements

Despite the calls for more simplicity in the system, a move to a flat tax based on volume, as has been implemented in Alberta, does not appear to be in the cards. Rather, the government's reference to consistency for retailers seems to hint at a move to level the playing field by equalizing the discount percentages available to different types of retailers. But with no clear direction coming from industry stakeholders, it's anybody's guess as to what a revised wholesale pricing system for BC wine will look like. Stay tuned...

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.