stats
globeinteractive.com: Making the Business of Life Easier

   Finance globeinvestor   Careers globecareers.workopolis Subscribe to The Globe
The Globe and Mail /globeandmail.com
Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space


Search

space
  This site         Tips

  
space
  The Web Google
space
   space



space

  Where to Find It


Breaking News
  Home Page

  Report on Business

  Sports

  Technology

space
Subscribe to The Globe

Shop at our Globe Store


Print Edition
  Front Page

  Report on Business

  National

  International

  Sports

  Arts & Entertainment

  Editorials

  Columnists

   Headline Index

 Other Sections
  Appointments

  Births & Deaths

  Books

  Classifieds

  Comment

  Education

  Environment

  Facts & Arguments

  Focus

  Health

  Obituaries

  Real Estate

  Review

  Science

  Style

  Technology

  Travel

  Wheels

 Leisure
  Cartoon

  Crosswords

  Food & Dining

  Golf

  Horoscopes

  Movies

  Online Personals

  TV Listings/News

 Specials & Series
  All Reports...

space

Services
   Where to Find It
 A quick guide to what's available on the site

 Newspaper
  Advertise

  Corrections

  Customer Service

  Help & Contact Us

  Reprints

  Subscriptions

 Web Site
  Advertise

  E-Mail Newsletters

  Free Headlines

  Globe Store New

  Help & Contact Us

  Make Us Home

  Mobile New

  Press Room

  Privacy Policy

  Terms & Conditions


GiveLife.ca

    

PRINT EDITION
U.S. whisky tariff circulates through Canada
space
Some suppliers and provinces are raising shelf prices, while others are absorbing the cost
space
By VICTORIA GIBSON
  
  

Email this article Print this article
Saturday, August 18, 2018 – Page B15

Prices for some whiskies from Kentucky and other U.S. states are rising for customers across Canada, six weeks after Ottawa levied tariffs on US$16.6billion worth of American imports.

Bottles of Jack Daniel's, Wild Turkey, Virginia Black, Basil Hayden's, Jim Beam and others now cost between 1.38 per cent and 16.11 per cent more in many provinces than they did on July 1, when 10-per-cent tariffs went into effect on the brown liquor as well as a host of other products, from ketchup to lawn mowers, in retaliation for U.S. duties on Canadian aluminum and steel exports.

Both whisky suppliers and the provinces have taken different tacks, either by passing the tariff directly onto consumers or swallowing the cost to keep shelf prices the same. Higher prices started trickling out in provinces including Ontario and Nova Scotia in mid-July as new shipments arrived in stores. New Brunswick refused to allow suppliers to raise prices, forcing them to bear the cost of the tariffs. Others, including Newfoundland and Labrador, Nunavut and Yukon, where new orders affected by the tariffs have yet to arrive, have so far been insulated from the fallout.

A spokesperson for the Liquor Control Board of Ontario, which does not negotiate with suppliers on price, said approximately 30 of the LCBO's 118 American whisky products have seen price increases as a result of the levies.

Take, for example, a 750-millilitre bottle of Bulleit Bourbon Frontier whisky. On July 1, an Ontario consumer would pay $40.25 for Kentucky-made, amber-hued liquor, based on prices observed by The Globe and Mail at a Front Street location of the LCBO in Toronto. That price held steady throughout most of the month, but has since increased to $42.90 - an additional 6.58 per cent.

London-based alcohol conglomerate Diageo, which owns the Bulleit brand, didn't comment on the price change specifically, but told The Globe it is continuing to assess the potential impacts of duties being applied on American products from a number of U.S. trading partners (China, Europe and Mexico have also imposed retaliatory tariffs of up to 25 per cent on U.S. whiskies).

"We hope that decision makers will work towards a sensible outcome that will maintain an open and transparent global trading system," a Diageo spokesperson wrote in an e-mail.

Canadian fans of popular brand Jack Daniel's, produced in Lynchburg, Tenn., are also feeling the burn of markups across the country. Prices began rising in Ontario on July 22. A 750-mL bottle of Jack Daniel's Single Barrel whisky now costs 5.27 per cent more (rising from $56.95 to $59.95) than it did before the trade war began. In Nova Scotia, the cost of a 1,000-mL bottle of Jack Daniel's Sinatra Century Gift shot up by 16.11 per cent on July 16, according to price changes provided by the Nova Scotia Liquor Corp. And in Saskatchewan, Jack Daniel's Honey drinkers are shelling out an additional $1.71, or 4.63 per cent, as of Aug. 10.

"In order to continue to invest behind the growth of American whisky in Canada, Brown-Forman is taking a province-by-province, brand-by-brand approach to the tariffs," Svend Jansen, a spokesperson for Jack Daniel's maker Brown-Forman said in an e-mail.

"Tariff increases could be passed directly to the consumer in full, partially or not at all. The amount will vary based on continuing negotiations."

Indeed, prices haven't budged in New Brunswick, where the province has taken a hard line, telling suppliers to swallow the extra costs from the tariff themselves. Mark Barbour, a spokesperson for provincial liquor corporation ANBL, said they interpreted the tariff as designed to affect U.S. suppliers, "and that it was not intended to punish our customers."

But farther east, prices have increased for all U.S. whiskies by the amount of the tariff in Prince Edward Island, where officials told whisky makers they need to absorb the higher costs if they want shelf prices to remain unchanged for consumers.

On the other coast, customers in British Columbia started to see price changes for U.S. whisky products on July 29, whether it was purchased in private liquor stores, BC liquor stores, restaurants or bars. Ten per cent has been added to the "landing cost" of an estimated 200 listed products sold within the coastal province, according to the B.C. Liquor Distribution Branch, which carries around 32 brands of whisky and bourbon.

Meanwhile, Alberta has added the full tariff amount to U.S. whiskies, according to Alberta Gaming and Liquor Commission spokesperson Heather Holmen, although the province's privatized model means each retailer can adjust liquor prices as they see fit.

James Burns, chief executive of Alcanna, which operates 176 liquor stores in the province, said the retailer's large U.S. whisky suppliers have been absorbing the whole cost of the tariff so far.

"In the bourbon industry, there's a lot of small craft [distillers] and some of them are not able to absorb any tariff, any costs like that. But from the big distillers, we haven't seen really any adjustment so far," Mr. Burns said.

"Bourbon is a really, really popular spirit the last couple of years here. It's growing incredibly in popularity, so we'd be very cautious before we did raise it. At some point we might have to. But so far, no."

Consumers in Manitoba are paying more as of Aug. 6 on three of the Manitoba Liquor & Lotteries Corp.'s 10 American whisky suppliers after they requested price changes ranging from 6 per cent to 8.5 per cent. Prices have also increased in the Northwest Territories, whose liquor commission purchases its products from other Canadian liquor boards such as Alberta and British Columbia. And slightly smaller hikes loom for Quebeckers, with 26 American whiskies out of more than 100 carried by the SAQ set to become more expensive as of Aug. 19, with an average price increase of 5.5 per cent.

Ultimately, some experts believe a change in price won't matter much to Canadian drinkers of American whiskies. Davin de Kergommeaux, author of Canadian Whisky: The New Portable Expert, said brand is a critical factor in how Canadian customers choose whiskies - and they may not be deterred by a hike.

"By and large, the reason that people drink American whisky is to have a little piece of Americana," he said. "Canada doesn't import a whole lot, proportionally, of American whisky, so I don't think people are going to abandon Jack Daniel's because of the price to go to Scotch or Canadian whisky, because that doesn't have the image."

Sylvain Charlebois, a professor of food distribution and policy at Dalhousie University, agreed that brand loyalty in the alcohol industry was typically stronger than with other foodstuffs. "We're not talking about eggs or bacon. It's different with alcohol," he said.

Price matters less, Dr. Charlebois said, and people have stricter purchasing habits.

"When you walk into a grocery store, your mind is a bit different than walking into the LCBO, where you will fetch the product you've often fetched without really looking at the price," he said.

"People may have a vague idea of how much they paid, but if you're talking 6 per cent, they're not going to notice as much as say, 25 per cent."

However, he said, there could be some more conscious shoppers who decide to seek non-tariffed alternatives.

"Depending on how products are positioned in the store, you could possibly see people - instead of buying whisky for example, look at Canadian rye. And I think that was kind of the intent behind these tariffs back in July, to perhaps give a fighting chance to Canadian alternatives out there."

Associated Graphic

Bottles of U.S. whisky brand Jack Daniel's sit on display at a liquor store in Caracas on July 12. A 750-millilitre bottle of Jack Daniel's Single Barrel whisky now costs 5.27 per cent more in Ontario than it did before the U.S.-Canada trade war began.

CARLOS BECERRA/BLOOMBERG


Huh? How did I get here?
Return to Main Eric_Reguly Page
Subscribe to
The Globe and Mail
 

Email this article Print this article

space  Advertisement
space

Need CPR for your RSP? Check your portfolio’s pulse and lower yours by improving the overall health of your investments. Click here.

Advertisement

7-Day Site Search
    

Breaking News



Today's Weather


Inside

Rick Salutin
Merrily marching
off to war
Roy MacGregor
Duct tape might hold
when panic strikes


Editorial
Where Manley is going with his first budget




space

Columnists



For a columnist's most recent stories, click on their name below.

 National


Roy MacGregor arrow
This Country
space
Jeffrey Simpson arrow
The Nation
space
Margaret Wente arrow
Counterpoint
space
Hugh Winsor  arrow
The Power Game
space
 Business


Rob Carrick arrow
Personal Finance
space
Drew Fagan arrow
The Big Picture
space
Mathew Ingram arrow
space
Brent Jang arrow
Business West
space
Brian Milner arrow
Taking Stock
space
Eric Reguly arrow
To The Point
space
Andrew Willis arrow
Streetwise
space
 Sports


Stephen Brunt arrow
The Game
space
Eric Duhatschek arrow
space
Allan Maki arrow
space
William Houston arrow
Truth & Rumours
space
Lorne Rubenstein arrow
Golf
space
 The Arts


John Doyle arrow
Television
space
John MacLachlan Gray arrow
Gray's Anatomy
space
David Macfarlane arrow
Cheap Seats
space
Johanna Schneller arrow
Moviegoer
space
 Comment


Murray Campbell arrow
Ontario Politics
space
Lysiane Gagnon arrow
Inside Quebec
space
Marcus Gee arrow
The World
space
William Johnson arrow
Pit Bill
space
Paul Knox arrow
Worldbeat
space
Heather Mallick arrow
As If
space
Leah McLaren arrow
Generation Why
space
Rex Murphy arrow
Japes of Wrath
space
Rick Salutin arrow
On The Other Hand
space
Paul Sullivan arrow
The West
space
William Thorsell arrow
space





Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space

© 2003 Bell Globemedia Interactive Inc. All Rights Reserved.
Help & Contact Us | Back to the top of this page