Issue link: http://winesandvines.uberflip.com/i/528936
July 2015 WINES&VINES 21 WINE INDUSTRY NEWS V ancouver, B.C.—A contentious revamp of wholesale liquor pricing in British Columbia has boosted shelf prices for more than 80% of wines sold in the province— primarily imported products. U.S. wine exporters worried the pricing struc- ture that took effect April 1 would cause prices to increase. Now, data obtained by Wines & Vines indicate those fears have been realized. An analysis of 3,821 SKUs sold through the province's government-run liquor stores— where prices are typically closest to wholesale pricing—indicates that 83.1% of wines (or 3,177 products) saw prices increase by at least 2 cents or more, while just 12.4% (or 472 items) saw prices drop. U.S. wines were near the overall average, with 80% rising in price, while only 66.4% of wines produced in Canada were subject to price increases. Additionally, the increases were not evenly distributed: 25.8% of U.S. wines that increased in price saw prices leap between 5% and 31.1%. The maximum increase for Canadian wines—and a far smaller proportion at that—was just 16.7%. The B.C. government announced the re- vamped pricing policy in November 2014 with a view to setting a common base price for both state-run liquor stores and private retailers, doing "away with the existing complex model that offers retailers various discounts depend- ing on the type of retailer they are." "The current retail-level margins are not sufficient for either private or government re- tailers to cover their operating costs…so some- thing has to give," said Mark Hicken of the Vintage Law Group in Vancouver, B.C. "The most likely result will be price increases.…I expect that to continue over the next few months until the retail sector gets back to sus- tainable margins. The end result will be higher costs for consumers." Other costs have also moved north. Charles Smith Wines of Walla Walla, for instance, boosted the FOB price of its key wines by $4 earlier this year, said Heather de Savoye, who oversees Northwest and international sales for the business. According to de Savoye, who said the increase came based on cost of goods, vine- yards and sourcing, "We're probably going to see a recalibration of pricing across the board, with everybody," she said. —Peter Mitham B.C. Hikes Cost of U.S. Wine in Revamp of Pricing Structure Divergan F – PVPP West Coast: 81 M Street Fresno, CA 93721 Tel: 559.485.2692 Midwest: 1401 Ware Street Waupaca, WI 54981 Tel: 715.258.5525 The Wine Lab TM : 640-D Airpark Road Napa, CA 94558 Tel: 707.224.7903 East Coast: 1165 Globe Avenue Mountainside, NJ 07092 Tel: 908.301.1811 The Revolutionaries Behind Wine's Visionaries Malolactic Bacteria, Non-Saccharomyces Yeasts Fermentation Nutrients Membrane Cartridge Filters, Laboratory Consumables OenoFoss - FTIR Analytical Instrumentation Filter Sheets, Lenticular Cartridges, Cellulose Pre-Coat Fibers Cross Flow Filters, RO Systems Liquid and Granular Enological Enzymes Oak-Mor ® / Oak Avantage ® Chips and Granular Oak www.gusmerwine.com sales@gusmerenterprises.com CO 2 Analytical Instrumentation Wine Hose & Spray Nozzles At Gusmer, we know the wine you create is just as unique as you are. Portable Ozone Systems H 2 S Preventing Saccharomyces Yeasts Lysozyme For over 90 years, Gusmer has ofered a full range of innovative enological tools that enable your creative expression through unique and interesting wines. Equipment, analytical instruments and processing aids brought to you from leading suppliers in the wine industry, all backed by strong Gusmer technical support. The options for expression have never been greater and the tools have never been better – so go ahead, be unique, express yourself. For more information, contact Gusmer today.