(Wines&Vines) - 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.

The new pricing structure took effect April 1, 2015, following a review two years ago of the province’s liquor policies.

Government announced the revamped pricing policy in November 2014 with a view to setting a common base price for both state-run liquor stores and private retailers, and doing “away with the existing complex model that offers retailers various discounts depending on the type of retailer they are.”

While the pricing formula underwent several changes prior to implementation, it consistently drew fears that prices would increase. (See “B.C.’s Higher Markups Worry U.S. Exporters” and “B.C. Wineries Eye Price Hikes.”) 

Now, data obtained by Wines & Vines indicate that those fears have been fulfilled.

Pricing breakdown

An analysis of 3,821 SKUs sold through B.C.’s government-run liquor stores—where prices are typically closest to wholesale pricing—indicates that 3,177 products (or 83.1% of wines) saw prices increase by at least 2 cents or more, while just 472 items (or 12.4%) saw prices drop.

U.S. wines were near the overall average, with 80% rising in price while just 11.2% saw prices fall.

But for wines produced in Canada, increases kicked in for just 66.4% of wines, while 18.6% saw prices decrease.

Additionally, the increases were not evenly distributed: For 95.1% of Canadian wines that saw prices rise, the bump was less than 5%. A far smaller proportion of U.S. wines—just 74.2%—experienced such a minimal increase.

Instead, 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%.

Among the several factors influencing prices, exchange rates are a key reason for the smaller jump in the price of Canada’s domestic wines. A year ago, the U.S. dollar averaged $1.09 Canadian; today, the average rate over the past month was $1.22.