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If you are interested in seeing how badly out of step BC is with the rest of the wine world, you will likely want to read this article (warning: you may get very mad at the government after reading this):
Outdated BC Wine Laws & Policies
If you want a shorter read (or don't want to get angry), these are the more general problems with BC's laws and rules related to wine that Free the Wine would like fixed.
1. Retail Distribution System
The laws and rules governing the sale of wine in BC are complex and inconsistent. Private retailers must compete with government stores which operate at an obvious advantage. However, even within the private system, there are numerous different types of licenses for wine retailers in BC. The terms of the licenses are dramatically different meaning that the tax rates, wholesale pricing and retail pricing vary a lot from one retailer to the next. For example, the wholesale discount (off the government retail price) for some private stores is as low as 10%. Others get 16%. Still others get as much as 30% (which is a more reasonable rate for a business). Tax rates also vary dramatically from as low as 12% tax to more than 135% depending upon the origin of the wine and the type of retail license. Our retail playing field is uneven and needs to be fixed.
2. Restaurants
In most parts of the world, restaurants can buy wine at wholesale prices direct from the winery or distributors. In BC and for most purchases, restaurants must buy all their wine from a designated government liquor store at FULL RETAIL PRICE. Direct delivery is available from BC wineries but not from any other winery, agent, or distributor. Restaurants are not permitted to let customers bring their own wine into the restaurant, even if it was purchased from a government store. This system means that restaurants make less money on wine sales than in other parts of the world and must charge higher prices. As a result, our hospitality and tourism industries are at a distinct disadvantage compared to our competitors in Alberta and Washington. This needs to be fixed.
3. Reasonable Import and Export Laws
At the present time, very little BC wine is exported outside the province. Indeed, it is illegal to ship BC wine to most of the other provinces unless the wine is routed through the liquor board in the destination province. There are a number of promising industry initiatives underway to try and correct these problems and to promote BC wine.
However, BC needs to get its own house in order. For example, under current BC laws, it is illegal to bring wine into BC from another Canadian province unless you voluntarily pay the liquor board markups and provincial taxes (which will total about 135% if the wine is low to moderately priced!). If BC wants to export wine, it should not be imposing punitive taxes and fees onto wine coming from other provinces.
Another example: if you return to BC from outside Canada with more wine than is permitted by your meager duty-free allowance (2 bottles per person after 48 hours absence), then you will be hit with taxes and fees that will usually exceed the full cost of the bottles that you are trying to bring back (85% liquor board "markup" plus some excise tax and 12% HST). The liquor board markup is simply a hidden tax which goes directly to the provincial government.
These tax rates are unheard of in the western world and are extremely high even within Canada. The BC government should revise these rates to reasonable levels. If we want other jurisdictions to import BC wine, we should not be imposing excessive taxes and fees on wine coming into the province.
For more information on any of these issues, please contact us.
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