A Word About Pricing

August 18, 2015 § 3 Comments

This is something new for the blog and I will look to post something of this nature each month… unless you tell me not to. Let me know what you think.

As you know this blog is dedicated to reviewing wines under $20 but the cruel reality is that what is $20 in BC is $15 in Alberta or $8 in California, so I thought I would throw my two cents in as to why I think our pricing in BC is not only a detriment to the economy but also creates negative consumption behaviour instead of curtailing it.

For years the industry has criticized the government about its mark-up/tax structure in BC. It’s a structure that sees you and me pay some of the highest prices for wine, beer and spirits in North America. The question has long been why?

Close to a century ago BC, like other provinces in Canada and states in the US, shed the legal cloak of Prohibition in favour of control over pricing, regulation and distribution. Here in BC the government determined that high prices, and therefore high taxation, would limit consumption, specifically the kind of conspicuous consumption that leads to a tearing of the social fabric, and if that didn’t work, they would make booze hard to get.

Here is the, perhaps unintended, assumption underlying high prices; rich people don’t create problems associated with alcohol only poor people do.

There isn’t any evidence anywhere that shows higher prices curtail negatives for the long term. The stigma about drinking and driving has become entrenched in our culture and that had nothing to do with pricing. Consumers in California don’t drink 5 times more because their prices are 20% of ours. In fact they have similar consumption to us, but a more vibrant and diverse wine culture that has spawned numerous economic opportunities that couldn’t possibly exist here.

Positive culture no matter if surrounds a society, sport, food or wine is not born of elites and graciously handed down to those less fortunate. Quite the contrary. History shows us that the culture that defines a nation or group comes from the ground up. In addition our culture is the cornerstone of our economic wealth. By entrenching high prices we secure the negative aspects of alcohol consumption and become impotent at solving the root causes, while making government increasingly dependent on the tax dollars that flow each year into general revenue and squelching innovation and investment.

What changes to make? My suggestion is start with a flat tax instead of an ad volerum tax. Second insure that the rules are applied equally to all those who choose to participate in the industry. Third, remove the government monopoly on distribution. After that pour yourself a glass of your favourite wine, sit down and relax… BC will be a better place.

These are just my thoughts, but I would love to hear yours.

Cheers

The Dork UnCorked

 

 

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