Craft beer lovers may suffer some sticker shock at B.C. liquor stores this month.

The B.C. Liquor Distribution Branch (LDB) has jacked up the prices on a number of popular B.C. craft beer products.

Want to buy a 650-ml bottle of Driftwood's award-winning Fat Tug IPA? You'll need to shell out nearly eight per cent more than what it cost you before the B.C. government's changes to wholesale liquor pricing.

On April 1, the LDB came up with standard wholesale prices for every product, which was designed to even the playing field for liquor retailers by eliminating a hodgepodge of subsidies given to different sectors of the industry.

In March, less than two weeks before her government brought in the new system, Attorney General Suzanne Anton accused critics of "beer mongering" for suggesting her new pricing formula would result in consumers paying more at the till.

"B.C. Liquor Stores expect no significant change to product pricing on their shelves in April as a result of the move to wholesale pricing," Anton said.

Her prediction, for the most part, has come true.

Although prices have been increased on 87 per cent of the beer products being sold in B.C. Liquor Stories, most of them could be described as nominal - 54 per cent of the increases are less than five per cent.

You'll pay a few more pennies for a 24-pack of Budweiser, $31.79 instead of $31.73, while Molson Canadian, Labatt Blue and Kokanee are mostly unchanged.

The price hikes on B.C. craft beer, however, can indeed be labelled "significant."

B.C. craft brewers Parallel 49, Bomber Brewing, RB, Four Winds and Dead Frog all sell products that were hit with seven-or eight-per-cent price increases on June 1. Gary Lindsay, director of marketing and sales for Driftwood Brewery, saw his entire line of beer get hit with a price hike of at least seven per cent without ever being consulted.

"The government looked at the numbers and thought 'a lot of this craft beer is not very profitable the way we've done things, so we need to increase the margins here,' " said Lindsay. "The increase comes at the cost of the customers. We didn't increase our price and we didn't increase what we get paid by the LDB."

B.C. private liquor stores, which used to receive a 16-percent subsidy on wholesale costs, now pay the same price that B.C. government stores pay.

Ken Beattie, president of the B.C. Craft Brewers Guild, says many of the wholesale prices attached to craft beer rendered them unprofitable for private operators.

"As of April 1, the wholesale price (on B.C. craft beer) was too high and the retail markup too low. What you are seeing now is a correction in craft beer prices to make the markup higher to make it more profitable," said Beattie.

Beattie says his industry is worried higher price points and slimmer profit margins will make it tougher to get their produce inside private liquor stores.

"We can see them not bringing in certain seasonals or certain other beers because private stores have to price them so high that they can't sell. They can't afford to have them sitting on the floor," Beattie said. "The private retailers will eventually view craft beer as not profitable.

"No one is winning - not the breweries, not the retailers and not the customers. Although you could argue that the government is winning a bit more because they have raised the prices."

The B.C. NDP, which provided The Vancouver Sun with a spreadsheet comparing June to March LDB prices, is calling on the government to take a second look at its new wholesale pricing system.

"When they brought in the change they promised beer prices would not go up and now 90 per cent of them have higher prices ," said NDP leader John Horgan. “They made a commitment to the people of B.C., and also a commitment to the craft brewers, who they called a cornerstone of the new economy. You don’t assist an industry by adding more cost to their bottom line. They called the new wholesale prices the start of a new era of openness, but they’ve just passed along more costs to the consumer.”

Anton did not respond to a request for comment.

The Ministry of Justice did respond with an emailed statement attributed to Liquor Distribution Branch spokesperson April Kemick:

"Like any retailer, BC Liquor Stores review prices on an ongoing basis to ensure products are priced according to market demand, profitability, changes in supplier prices, etc. In any given month, some prices go up and some go down. Minimal price increases - in the range of 20 to 50 cents - were applied to some beer in June, while in other cases, price promotions were applied, making products less expensive.

BC Liquor Stores have always supported B.C. craft beer and continue to actively explore new ways to increase the profile of B.C. beer in stores, including through displays and in-store signage, marketing, beer tasting events and more. These efforts have helped to contribute to steadily growing sales - in the past two months alone, craft beer sales have grown by approximately 40 per cent in BC Liquor Stores."



sbrown@vancouversun.com

Twitter.com/BrownieScott





Interactive chart by Chad Skelton, Vancouver Sun

Beer prices on the rise

Example of BC Liquor Store craft beer prices (pre-tax)

Nelson Paddywhack IPA 6x355ml cans



March: $10.83; June: $11.79



Bomber Brewing ESB 6x355ml cans

March: $9.88; June: $10.79

Driftwood Fat Tug 650ml bottle

March: $5; June: $5.39

Dead Frog Classic Nut Brown 6x341ml bottles

March: $10.65; June: $11.29

Parallel 49 Gypsy Tears 6x341ml

March: $10.87; June: $11.29

Central City Red Racer Imperial IPA 650ml bottle

March: $5.65; June: $6.29

Four Winds IPA 4x330ml bottles

March: $8.22; June: $8.79

* This story has been corrected to indicate the above price changes were from March to June, and not May to June which appeared in an earlier version of this story.



