B.C.’s restaurants and bars will be able to permanently buy liquor at a discounted rate to help increase their profit margins as they recover from the economic damage caused by the pandemic, the government has announced.
Solicitor General Mike Farnworth said allowing restaurants to purchase booze at wholesale prices – a temporary measure put in place in June to help restaurants decimated by the pandemic – will become permanent policy effective immediately.
“Early in the pandemic, our government took urgent action to support B.C. restaurants and pubs by allowing them to purchase alcohol at a wholesale cost,” Farnworth said in a statement.
“Now we are making this change permanent to give these businesses certainty and help them recover, and to help the estimated 190,000 British Columbians who work in this sector.”
Purchasing liquor at wholesale prices could reduce alcohol costs for bars and restaurants, allowing them to eke out more profits on alcoholic items when faced with fewer dine-in patrons and rising delivery costs.
“It is going to save our members roughly 20 per cent as far as their liquor costs, so this is certainly a huge step forward for liquor policy in B.C.,” said Mark von Schellwitz, Restaurants Canada vice-president.
“It’s just fair, we should be on a level playing field with retailers when it come to access our liquor on a wholesale price and then being able to sell it as a retail price. It not only helps our licensees but it will help our customers as well with better products and pricing.”
Restaurants and bars have for many years been required to buy their alcohol at the same full retail prices paid by members of the public.
The sector complained it was unfair, though government said changing the rule would unnecessarily cut into the profits it enjoys from its government-run liquor distribution system. It cost almost $50 million in forgone revenue to make the change for six months in 2020. And it will cost $71 million annually to make the change permanent, according to Farnworth’s ministry.
“As the sector continues to pivot and adapt to meet customers’ needs, this measure will better position business owners to regain stability as they navigate through the pandemic to economic recovery,” Economic Recovery Minister Ravi Kahlon said in a statement.
The restaurant sector is still hoping government will make permanent another temporary change that allows it to sell and deliver liquor with food. That’s set to expire March 31.
Restaurants would like that expanded to include cocktails and mixed drinks, said von Schellwitz. “Right now it’s impractical to order a bottle of spirits, whereas ordering cocktails would certainly be better,” he said.
Another request is for restaurants to be able to purchase alcohol from any licensed retailer, so they could run out and get a couple of bottles from a private store if they are running short rather than submitting an order to government’s wholesale branch.
“There are a number of recommendations that we continue to work on with government. We are very grateful for their direction on this and following through on their campaign commitment to make wholesale pricing permanent.”
Roughly 10 to 15 per cent of the restaurant sector is permanent closed, and two-thirds of the industry is losing money each month. “That’s 85 per cent of the industry just trying to tread water right now and survive the pandemic,” said von Schellwitz.