Online bootlegging: B.C. booze industry concerned local buyers are clicking on Alberta

Click to play video: 'High B.C. booze prices driving business to online sellers'
High B.C. booze prices driving business to online sellers
Independent liquor stores in B.C. say the province's high prices are driving customers to Alberta-based online retailers -- who offer some products at retail prices below B.C. wholesale. Richard Zussman reports. – Jun 20, 2023

British Columbia’s liquor regulator is reaching out to its counterpart in Alberta following repeated concerns that cheaper alcohol prices in the neighbouring province have attracted an increasing number of online buyers in B.C.

It’s illegal to ship most alcohol for personal consumption from other provinces into B.C., but according to Darryl Lamb, a manager at the largest privately-owned liquor store in the province, that’s exactly what’s happening.

“A lot of these premium sales that used to take place in British Columbia are now just going to the online sphere and moving to Alberta, which has significantly lower prices,” he told Global News on Tuesday.

“That also means that those tax dollars are no longer being spent here in British Columbia, they’re flowing to Alberta.”

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Alberta and B.C. have different markup and taxation systems.

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In B.C., suppliers sell their products to the BC Liquor Distribution Branch (BCLDB) for a price of their choosing.

The BCLDB then applies a fixed markup formula, federal customs duties, the container recycling fee, and a federal excise tax to determine the wholesale price for private and public liquor stores.

British Columbia is one of the most expensive places to buy alcohol in Canada. Alberta is among the cheapest.

The Wild Common Still Strength Tequila Blanco, for example, is available on sale through the Calgary-based Craft Cellars website for $124.99, down from $152.99. Online at Vancouver’s Marquis Wine Cellars, the same product retails for $249.99.

Lamb said the wholesale price of that tequila in B.C. is $152.

Craft Cellars also lists the Ardbeg 10-year-old Scotch Whiskey at $79.99, on sale from $99.99, while BCLIQUOR sells it for $112.99.

The same Calgary shop offers the Laphroaig 10-year-old Single Malt Scotch Whiskey for the sale price of $69.99, while BCLIQUOR lists it at $81.69, on sale until July 1.

The Malbec Escorihuela 1884 Estate Grown Mendoza goes for $12.99 at Craft Cellars and $21.99 online at BCLIQUOR.

“The BCLDB just had their spirit release last weekend, and across the industry, the word is that it was quite the flop, simply because those items you can find for 40, 50, 60 per cent lower online from Alberta and they’ll deliver right to your door,” said Lamb.

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Jeff Guignard, executive director of the Alliance of Beverage Licensees in B.C., echoed Lamb’s concerns.

He said he’s aware of one store recently losing “tens of thousands of dollars” in premium product sales to Alberta, and estimates this form of online bootlegging is costing B.C. “millions.”

“Industry is losing some of our high-end consumers who purchase $100 bottles of wine or $1,000 bottles of scotch,” Guignard said.

“That not only means we’re losing business at the exact same time we’re trying to recover from the pandemic, it also means the B.C. government is losing out on tax revenue that it needs to fund its priorities here, so this is a serious problem and it’s gotten worse the last couple of years.”

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Guignard said he suspects inflationary pressures combined with cheap shipping have contributed to the increase, and there needs to be a “serious conversation” about equalizing the markup system between the two provinces. Lamb agreed.

“The only thing we’re asking for is essentially, we need to level the playing field to make shipping not valuable,” Lamb said.

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As it stands, British Columbians can only ship 100 per cent Canadian wine purchased directly from a Canadian winery into the province for personal consumption.

They can, however, bring unlimited quantities of liquor, wine and beer into B.C. after travelling to Alberta in-person, as long as the booze comes back with them.

All liquor stores in the Prairie province have been privately run for decades, after Alberta became the first in Canada to privatize liquor retailing in 1993.

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The Alberta Gaming, Liquor and Cannabis (AGLC) inspections branch is responsible for enforcing the province’s legislation and policies.

“Alberta liquor stores are not permitted to deliver liquor products to locations outside of Alberta, as per Section 4.11.1 a of the AGLC’s Retail Liquor Store Handbook,” the BCLDB wrote in a Tuesday statement.

British Columbia’s Liquor and Cannabis Regulation Branch will be reaching out to the AGLC in response to industry concerns, “and will continue to monitor the situation to determine the best response strategy and enforcement roles,” it added.

Official Opposition MLA Peter Milobar, B.C.’s shadow minister of finance, called on the solicitor general in the province to “start enforcing the laws of British Columbia or start adapting the pricing of these liquors” to prevent “bleed-off to Alberta.”

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