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BC Alcohol Price Study – Bad for Wine Industry

Recent recommendations from the Centre for Addictions Research at the University of Victoria have been in the news lately as they advocate changes to alcohol pricing in BC when the HST is introduced. See this recent media coverage in the Vancouver Sun which included a column by Pete McMartin. Randy Wilson of Liquor Plus provided a valuable counterpoint on this issue on CKNW\’s Bill Good Show today.

The wine industry has good reason to be seriously concerned about the recommendations in this report because they pay almost no attention to the well-established fact that moderate wine consumption is actually good for you.

The main recommendations of the report, and the reasons for them, are as follows:

  • Setting a minimum price for a \”standard drink\” of $1.50 at retail and $3.00 in restaurants/bars. This is based on an assumption that increasing the price of cheaper liquor will decrease consumption for problem drinkers.
  • Adjust liquor board markup so that lower alcohol content products have lower markups and higher alcohol content products have higher markups. This is based on an assumption that higher prices for higher alcohol products will encourage people to drink products with lower alcohol.
  • Use increases in revenue to address alcohol-related problems.


While the intentions of the report\’s authors are obviously genuine, this appears to be a case of poorly conceived public policy. Like the prohibitionists and temperance advocates of 90 years ago, the writers of this report make almost no distinction between the safe and beneficial moderate consumption of wine and other more harmful patterns of consumption (which by and large are limited to a tiny minority of BC drinkers – usually thought to be about 1%).

The first recommendation is questionable. BC already has some of the highest taxes on liquor in the world which often result in retail prices which are double those south of the border. If higher prices would reduce consumption, then we should already have significantly less consumption (and, by extension, less problems with alcohol) than in neighbouring jurisdictions – which we do NOT. In fact, countries like Italy and France which have drastically lower taxes and retail prices have far less problems with alcohol than we do. In any event, it seems unfair to penalize the large majority who consume responsibly for the sins and problems of a tiny minority. We do not adopt this policy rationale for any other behaviour with which a small minority causes problems (eating junk food, driving a car) – why is it ok for wine drinkers?

The second recommendation is dangerous for the wine industry. Problem drinking is not an equation that is as simple as \”higher alcohol products = higher problems\”. Wine has a considerably higher alcohol content than beer or coolers. According to this recommendation, the markups on wine should be punitive to discourage wine consumption and encourage people to switch to \”lower alcohol\” beer or coolers. However, as most people know, the moderate consumption of wine is actually good for you. It\’s much more important to focus on responsible consumption than simply focusing on alcohol content. Why should a person who wants to drink one glass of expensive wine (or Scotch for that matter) be penalized for responsible consumption simply because the alcohol is higher? Which do you think is the healthier choice: 2 glasses of wine with dinner or many low alcohol beers?

The research behind this report seems questionable. For example, one headline element claims that the direct costs of alcohol exceeded government revenue by $57 million in 2002 based on \”solid estimates\”. However, this looks like very dubious science. The claim is based on some Ontario research that attempted to calculate the total costs of alcohol and other drug abuse in Canada by totalling medical costs, law enforcement costs, and other social costs such as work disruption. The actual research acknowledges that the totals are estimates … but if one looks at the research, it seems that, apart from the health care costs, the \”estimates\” are more akin to wild guesses … for example, the estimated law enforcement costs are based upon a survey of the motivations of prison inmates and the work disruption and social costs are based upon assumptions which could be very inaccurate.

Most people will find the recommendations in this report to be counter-intuitive, particularly as they relate to wine consumption. We would all do well to remember that the failure to separate out moderate consumption from problem consumption was what led North America to the disastrous experiment with Prohibition … from which we are still trying to untangle ourselves 90 years later. Don\’t get fooled again!

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