Tuesday, July 24, 2012

BC Liberals finally deserve a toast for introducing restaurant wine corkage!

Cheers to the BC Liberals for once!

Wine lover Bill Tieleman - the Wine Barbarian - toasts BC Liberals' decision to bring in corkage at BC restaurants! - Shirley Ross photo
Why new wine corkage rules in restaurants could be revolutionary in British Columbia.

Bill Tieleman’s 24 hours/The Tyee column

Tuesday July 24, 2012

By Bill Tieleman

"God made only water, but man made wine."

- Victor Hugo, 1802-1885
Cheers to the B.C. Liberal government!

Shocked? It's not a sentiment seen often in this space but credit should be given when any party does the right thing.
And on new wine corkage rules in B.C. restaurants, the government has -- gulp -- done a good job.

The concept is simple: restaurants with a liquor license can let customers bring their own bottle of wine for a meal and be charged a corkage fee rather than buying wine from the restaurant.
The "bring your own wine" fee can be anything the restaurant decides -- from nothing to perhaps as high as $50 a bottle -- and there is no government bureaucracy involved in setting the fees or administering the process.

Most restaurants will charge a $10 to $25 corkage fee, to discourage customers from packing in the cheapest Somewhat Blanc or Recent Rouge wines. They may also ask patrons not to bring bottles in that are already offered on the restaurant's wine list.
The BYOW idea, while straightforward and practiced for years in other provinces and countries, is potentially revolutionary here.

Corkage could increase restaurant sales while reducing the cost of wine to consumers and allowing them to enjoy a better quality quaff at the same time.
"This is a common sense change that will result in more people going to restaurants," Ian Tostenson, B.C. Restaurant and Food Services Association president, said Saturday in an interview.

Hey, easy on that mark up!
But the government cannot guarantee corkage's success. It's up to restaurants to make the most of this opportunity and consumers to take advantage by patronizing those who offer it.

Unfortunately, one downside is that many restaurants are already too greedy with existing wine pricing mark ups and may do the same with corkage.

I recently dined at a B.C. restaurant in a tourist town where a Louis Latour bottle of pinot noir from France retailing for $23 in government liquor stores was offered for $63 -- almost a triple mark up and a $40 profit!

Instead of buying that bottle, my wife and I had a much cheaper cocktail and glass of wine for under $40. So it was a lose-lose. The restaurant lost out on making more money and we didn't have a bottle with dinner, plus we won't go back because of their wine pricing.
Check one of Vancouver's best restaurant's wine listsand you can find painfully high prices, like $50 for a Pfaffenheim pinot gris from France worth $19 in a B.C. liquor store or $62 for a Errazuriz carmenere from Chile retailing at $22 or $120 for a de Toren Fusion V red wine from South Africa that retails for $45.

The standard doubling of retail prices for wine in restaurants is bad enough but more than that is unconscionable. Big mark ups are a major reason many people don't go out as often to restaurants or don't buy wine to go with their food.
And as the price goes up, the mark up should go down accordingly -- but often it doesn't, so patrons buy low-end wine instead.

Why should a restaurant charge $40 for a $20 retail priced wine and $100 for a $50 bottle, making $20 on one and $50 on the other for identical service and the same wine glasses?
So far those restaurants have probably gotten away with it because they think customers are simply stupid and don't know they're being fleeced with every glass.

But my suspicion is that many patrons would spend more on wine and be more likely to return if the establishment offered either a flat rate mark up no matter what the price or at least a much lower mark up on higher end wines.
If restaurants offer a reasonable $10 corkage fee, customers can bring in a $30 retail priced wine and save $20 over what would be charged on a standard 100 per cent mark up if they bought a similarly priced wine off the list. And they can bring in a special bottle saved from their cellar for years or a more expensive one for a special occasion.

Just the beginning
"This whole movement to modernize liquor laws is a consumer rebellion over the high cost of alcoholic beverages in B.C.," says Mike Klassen, who runs the BC Wine Lover blog.

"Drinking wine in moderation over a family dinner is one of life's great pleasures, yet it's prohibitively expensive for us. Fairly priced corkage fees are a step toward affordability," Klassen told me.
I completely agree and think smarter restaurateurs will take other innovative steps with corkage, such as waiving or reducing the BYOW fee on traditionally slower days like the beginning of the week or offering no corkage if you bring in a large party or order a more expensive multicourse meal.

Those are all now possible and fortunately B.C. has avoided some problems Quebec created with its corkage rules. In that province only unlicensed restaurantscan allow customers to "bring your own wine" -- with the result that none of the best eateries offer corkage. In downtown Montreal just six restaurants advertise BYOW.
But expect some B.C. complaints nonetheless. Pub owners who serve food may be crying in their beer -- because the government excluded them from offering BYOW.

As also recently outlined here, B.C. charges some of the highest retail prices in North America, so corkage fees won't change that reality.
And of course, what would a meal in B.C. be without the hated Harmonized Sales Tax being applied? Unfortunately, until the HST disappears in April 2013, corkage fees will be subject to the tax along with your food.

Nonetheless, let's raise a glass. The B.C. Liberal government has earned a toast at last.


Tuesday, July 10, 2012

British Columbia wine, beer & spirits among North America's most expensive

Wine, beer & spirits in British Columbia will cost you - Bill Tieleman photo
And that's even before privatization of warehousing that may boost your bill. 

Bill Tieleman’s 24 hours/The Tyee column

Tuesday July 10, 2012

By Bill Tieleman

"Bill has a column, right -- so I'm warning you -- so if you tell Bill he's wrong, the chances are he's going to get a column out of if."
Voice Of B.C. host Vaughn Palmer to Rich Coleman, B.C. liquor minister.
Do you believe the price of beer, wine and spirits in British Columbia is reasonable?
That B.C booze costs are comparable to other provinces and American states?
I don't, so I posed a simple question to Coleman on Shaw Cable's Voice of B.C. on May 31.
"Why do consumers of beer wine, and spirits pay among the highest prices in North America for those products?" I asked.
But Coleman immediately rejected my conclusion when Palmer asked: "Is he right about that?"
"Not really, no. We have a pretty comparable price structure to the rest of Canada," Coleman replied.
Oh yeah? I may only be a columnist and wine blogger, but I think the minister is wrong.
And some quick research on beer, wine and spirits prices indicates we often pay more -- sometimes much more -- than in other jurisdictions.
In B.C. government liquor stores, Labatt Blue beer costs $22.29 for 12 bottles, plus $1.20 bottle deposit, for a total of $23.49.
So how come in Chicago, Illinois, the imported Blue can be found for just $10.98 U.S. a case at Binny's private stores? That's less than half price!
Or why is it $18.50 a case in Ontario and $20.18 in Quebec at an IGA store?
And why does a Catena cabernet sauvignon from Argentina costing $21.09 in B.C. plus deposit retail at Ontario's government liquor stores for $19.95 and only $17.31 at private Calgary store Zyn?
How does Binny's in Chicago sell it for just $16.54 U.S.?
Coleman's corkers
Perhaps such price differences are why Coleman hedged his bets under questioning by Palmer after initially saying I was dead wrong.
Palmer: "He knows his wine, Mr. Tieleman, he's pretty knowledgeable about pricing, I think he might be right."
Coleman: "I don't think he is. I mean, we watch prices, there are some jurisdictions that have different pricing structures. You can go look at some types of liquor, some types of beer, whatever, and see differences between jurisdictions."
Palmer: "Bill has a column, right -- so I'm warning you -- so if you tell Bill he's wrong, the chances are he's going to get a column out of if."
Coleman: "He's not totally wrong because on some of it there is higher prices. A premium Scotch is higher in B.C. than it is in Alberta. But the floor price on some of our spirits is lower than in Alberta.
"So it's really how we tax it and how we take our revenues out of it, and in B.C. we make $900 million that goes into this fiscal plan for government, so that's where our pricing is."
Some B.C. prices are indeed lower than Alberta and other locations.
Let's drink Kentucky bourbon Wild Turkey for $28.95 a bottle in B.C., $28.25 in Ontario, $27.60 in Quebec -- or an easier to swallow $22.93 in Chicago.
That same bottle is $31.87 in privatized Alberta at a Calgary store.
But when one of the biggest selling beers brewed in Canada costs half the B.C. price in Chicago and $5 less in Ontario, I'd say someone's making a lot of windfall cash.
Higher prices for worse wine
Compare B.C., Ontario and Quebec's government liquor store profits.
B.C., as Coleman notes, makes about $900 million from selling liquor, while the Liquor Control Board of Ontario reported a $1.6 billion dividend to government from sales and the Societe Alcool de Quebec just announced a $1 billion net revenue.
But B.C.'s population is 4.6 million, Quebec's is 7.9 million and Ontario's is 13.4 million -- that's a lot more revenue per person from booze sales in B.C.
Yes there are differences between the provinces. Quebec allows corner stores and supermarkets to sell wine and beer; Ontario has the Beer Store run by big breweries as well as its stores while B.C. has a mixed public/private store network.
However none of that contradicts the higher prices in B.C. on some identical products.
Maybe that's fine with some B.C. drinkers -- and non-drinkers -- who prefer high prices that help fund government services while discouraging consumption.
But alternatively, high liquor prices are a regressive tax where lower income earners pay disproportionately more of their budget to enjoy a beverage.
It also means that those who drink are likely to purchase cheaper products because of the higher taxation and mark up rates. We pay more for crappier wine.
And despite Coleman saying his plan to privatize B.C.'s liquor warehouse operations won't mean consumers will pay still higher prices, I'm not convinced.
The new private owners will maintain a monopoly on the distribution and will also retain the unionized workers, plus find ways to make a profit -- all without increasing costs?
Here's one more clear reason I'm very dubious -- the same Catena wine priced at $21.09 at B.C. government stores is $27.99 in private B.C. Liquor Depot outlets -- 33 per cent more!
It all may drive me to drink.