Towards a rise in the price of beer

On April 1, not only will your electric bill go up (0.9%). The Liquor, Racing and Gaming Authority (RACJ) forecasts a 2% increase for the floor price of beer. The biggest leap in seven years.

This is the information that was transmitted to the Sun by the RACJ on Wednesday. However, it is important to mention that Canada’s consumer price index (CPI) in 2018 was 2.3%, according to Statistics Canada.

This is important when we know that the RACJ usually adjusts the minimum price of blond liquid sold across the province based on this percentage.

First joined during the day on Tuesday following an analysis of the impact of a 2.3% jump in the beer market rates conducted by the site DepQuébec.com, the RACJ had I did not want to comment on the file.

At the end of the day, however, management opted to publish on its website the increase in beer rates in anticipation of April 1 st . Usually, these data are first and foremost disclosed in the Gazette officielle du Québec.

In a document sent to the Sun , the RACJ explains that in order to carry out its calculation, the organization used the December 2018 consumer price index (12-month change).

In the past, the RACJ seems to have always used the average annual CPI from January to December (2.3%, consumer price index: annual review), as mentioned in the law. No one in the organization could provide an explanation on Wednesday.

If a comparison is made between previous years and increases based on Statistics Canada data, the increase in the percentage of the floor price of beer would not have been the same with the recently used formula. Last year, the increase would have been 1.9% and not 1.6%.

But back on topic. At 2% or 2.3%, this will be the largest increase since 2012 (2.90%). Note that in 2015, the increase was also 2%.

This change in pricing, which will vary according to the alcohol content by volume, will result, for example, in a jump of 51 cents (2%) – or 58 cents (2.3%) – when purchase of a case of 24 bottles of beer with an alcohol content of less than 4.1% (355ml). The Bud Light brand will see its floor price for this format increase from $ 25.37 to $ 25.88 (2%).

As another example, the minimum price for a 12-bottle Molson Dry brand (5.5% alcohol) will increase by 28 cents (2%) – or 32 cents (2.3%) – 1 st of April. The bill that was $ 13.90 last year will now be $ 14.18.

Selling price

It is important to note that this increase in the price of beer will not necessarily be reflected in the same way in the consumer portfolio, as several retailers and grocers in the province are already selling their different brands of beer above the floor price. .

It remains to be seen whether the bill will be passed on to hops or sponged by industry players.

“It’s very high as a rise. The Costco brand and the discount convenience stores such as the Dépanneur Rapido will certainly have to revise their prices, as they still offer certain products at minimum prices, “warns the site manager DepQuébec.com, Guy Leroux.

“About five or six years ago, beer sold more at minimum prices in convenience stores in Quebec. Today, the trend has changed. Prices on the market have recovered. The biggest players still sell some products at low cost, but only in very large quantities as for boxes of 60 cans, “he says, adding that Quebec remains one of the least expensive markets across the country.

It must be said that some grocery chains are now bypassing the minimum price set by the Régie des alcools with cross promotions. For example, over the last few months, consumers have been able to take advantage of discounts on their groceries when buying two crates of beer.

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