Critics blast wine price hike: NB Liquor’s advice to wine suppliers to boost prices called a tax grab

The latest price increase, that will see NB Liquor reap more money from consumers without boosting its mark-ups on products, is simply another way to take more money from New Brunswickers, said Kevin Gaudet of the Canadian Taxpayers Federation.

“It’s a tax grab of a different kind, except this one grabs you in the wallet and the liquor bottle at the same time.”

Prior to its March 1 price increase, which mainly targeted wines, NB Liquor advised its suppliers to increase their costs.

That allowed the Crown corporation to collect more money from customers while avoiding the unpopular move of increasing its mark-up on wine.

Because NB Liquor’s mark-up on wine is a fixed rate (148 per cent), the Crown corporation makes more money on any wine it sells, even though it initially paid a higher price for the product.

“I don’t know why they’d want to be making even more money than they already do…it strikes me as the wrong move at the wrong time,” said Gaudet. “It’s a classic example of government taking more money out of your pockets at the worst possible time in the economy.”

If NB Liquor truly needs to boost its revenues, it should have been upfront with New Brunswickers, he added.

Last week, a spokeswoman for NB Liquor said all wine suppliers increased their prices by two per cent. An additional three per cent increase was added to some suppliers to cover freight and exchange fees. Rose-May Poirier, Conservative MLA for Rogersville-Kouchibouguac, said she plans to file a right-to-information request asking government for all documents relating to the latest price increase.

Poirier said NB Liquor’s explanation that the increase isn’t intended to boost profits doesn’t make sense as the Crown corporation also said the additional money was needed to meet its budget for the year.

“You have to question what this all means,” she said.

Charles Cirtwill of the Atlantic Institute for Market Studies said it’s easy to predict how consumers will react.

“They’re not going to be happy,” he said.

“What you have here is a monopoly basically dictating their own profit margin.”

The provincial government has resisted calls to privatize NB Liquor, saying the Crown corporation provides much-needed cash to run government programs such as education and health care.

“We want to remain cost competitive but, at the same time, we want to get a good return on investment to invest in health care and education from the taxes generated,” said Premier Shawn Graham.

Yesterday, Graham said NB Liquor posted record revenues last year and he’s hoping to see similar results this year.

“We want to make sure we get the best value for the taxpayer and we have a competitive price regime,” said Graham, adding New Brunswick carries a huge selection of products.

But Gaudet said it’s absurd to think that the health-care system would suffer if government sold NB Liquor.

Quebec, Alberta and Saskatchewan, which all have varying degrees of privatization, have all been successful, he said.