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Artwork above provided by the author.
One of the first daunting tasks with running the wine program of a new restaurant in a post 7-01 world, is trying to figure out what the hell is going on at the LDB and what it now means to be a ‘Licensee.’ This is a little timeline of recent events in BC and some of the thoughts that have been flooding my head.
Prior to July 1st, the only difference between someone walking in off the street to buy a bottle of wine and a restaurant (Licensee) buying that same bottle to sell to their guests was the very modest 9% (ish) discount that the restaurant received. Some consumers find it difficult to stomach paying restaurant markups of over 2x what they would at the liquor store, but the reality is that the restaurant industry operates on much thinner margins than many realize and most of these restaurants rely heavily on alcohol markups to be able to open their doors at night. Unfortunately, it was necessary that you pay $50 in the dinning room for a $22 bottle of wine, because unlike nearly every other country in the world where dinning out is valued by society, there were no wholesale prices for restaurants (save for the measly 9%-ish).
Francois Mikulski’s ‘06 Bourgogne - a delicious bottle of wine that I paid $38 for at Clyde Common in Portland. That $38 bill included zero tax.
So then HST (Harmonized Sales Tax) comes into the picture on July 1st. At first it looks like the people will actually save some money on wine. Instead of paying 15% tax (10% Liquor and 5% GST) on a bottle of wine (taxes that are already factored into the price at a government store), you’d pay the one harmonized tax of 12%. Excellent! Except that in order to compensate for this potential savings for us all, the government raised their markups on wine entering into the provincial system from 117% to 123% (not considered by them to be a ‘tax’), keeping the shelf prices roughly the same. Shit! From what I understand, there are few, if any, jurisdictions in the world where the citizens pay that much of a ‘markup’ (although I’ve heard rumblings that one of the Scandinavian countries may be close). But I shouldn’t complain, because we get roads and healthcare and all that (right??).
Fine, whatever. I can manage with that, because at least prices aren’t increasing.
Then, within the restaurant community, some began warning others to stockpile wine before July 1st, because the Licensee discount was going to be abolished. This, I simply didn’t believe and chalked up to someone’s misunderstanding of the HST changes. As far as I was concerned, the differences in taxes collected had been balanced (as I’ve described above). But sure enough, that 9% discount is now gone. It might not seem like a whole lot, but in order for a restaurant to maintain the same cost percentage on a $25 bottle (say 40%), they would need to mark it up an extra $5. I don’t understand the logic on eliminating the discount (and would love someone to explain it to me), but it seems like they used the confusion that came with the HST change as an opportunity to pull away a Licensee privilege. Ah, the old distract-and-grab… oldest trick in book.
The BCLDB then sent out a memo to its ‘wholesale customers’ (it’s nice that they consider restaurants wholesale customers even when they now pay the same as everyone else) with a ridiculously complicated equation that managed to prove that restaurants would in fact make higher profits after all these changes. I had to go over the example a dozen times and read the explanation on Winelaw.ca before I understood it properly. The example assumed that restaurants follow certain practices in their pricing of wine that I can tell you are very rare (for example, the list price of a bottle includes all taxes).
On Winelaw.ca, Mark explains that the Licensee would then be able to apply for an input tax credit to recover some of this discount they previously were entitled to (probably a monthly, quarterly, or yearly kind of thing), yet they are disadvantaged by having to pay more up front and will likely recover less than the 9% discount seen before. Many people managing the wine affairs of Vancouver’s restaurants will still be under pressure from higher powers and owners to maintain the same costs (be that number 35, 40, 45%) and we will probably see list prices rise even more. Because you didn’t think it was possible to pay more than $35 for Lindeman’s Chardonnay! Ha! Will this tempt more restaurants into buying (illegally, as currently you must buy from the BCLDB) the odd case of wine from specialty shops with good (non-abusive) customer service, great selections and owners that will actually offer a discount on purchases by the case? What a bunch of novel concepts! I’d say it’s very likely.
Chateau des Tours ‘04 Cotes-du-Rhone Blanc - the third label of Rayas and a fantastic bottle of wine that I paid $24 for at a restaurant in San Jose.
Restaurants should definitely have the right to a wholesale price - allowing them to sell wine at lower markups and increase profit margins at the same time. Everyone but the government monopoly wins with wholesale pricing. The fact that we don’t is a complete joke and was one element of BC’s wine trade that caused me much anxiety on my return from California. As Vancouverites, we have all we need to make this city one of the top five dining destinations on the planet - this I truly believe. However, can we even take ourselves seriously with wine list prices often over triple what the same bottle would cost on a list in San Francisco or New York? We’re sometimes forced to sell wines by the glass based on a low enough price point that sommeliers south of the border would never even consider pouring. The people of BC deserve to be able to go out for dinner and enjoy a $25 bottle (I said ‘enjoy,’ not ‘be content with!’) and our government needs to stop stifling our truly incredible hospitality industry.
One last thing (and if you’re still reading this, I thank you). Apparently the BCLDB has relayed to importers that more shelf display space will be given to the highest selling brands. More and more products will become ’speculative,’ requiring special orders, and will no longer be available on the government shelves. I witnessed this during a visit to the recently relocated (and shrunken) Signature Store that was previously on Thurlow and Alberni and now Bute and Alberni. Essentially, the value brands with big marketing budgets will receive more bottle facings, pushing out some of the smaller and slower moving labels. This is completely backwards! These are the brands that don’t need more help! In my opinion, customers should be forced to walk past a dozen aisles of delicious wine made in tiny volumes by honest producers on their way to grab a bottle of Yellowtail Merlot in the back corner (even down a hall to a separate annex). Maybe just one person a week (the LDB processes 700,000 transactions a week) will stop and grab a bottle of Marcel Lapierre’s Morgon instead, bring it home and get their fucking paradigm rocked. I realize how ridiculous this example is and am a firm believer that the average person needs someone to help them expand their palate, which is another reason why we should all be buying wine from knowledgeable people at stores like Kits, Marquis, Liberty, and Firefly and not the government stores. These shops employ people because they love wine and want to help customers take home something cool and thought provoking (how about some ‘93 R. Lopez de Heredia Rosé tonight instead of that Beringer White Zin? Another extreme example, but one I’ve personally encouraged). The one possible advantage that I can foresee in the government turning the LDB stores into Penfolds resale centers, is that it may encourage more consumers with a thirst for more than a basic selection into spending their money at the private specialty shops I’ve mentioned above.
I realize that I just ranted my way through a number of topics, but I’d appreciate any comments you have. Tell me where you think I’m wrong, or what you agree with. Why aren’t enough people pissed off yet? I’d love to hear anything you want to contribute.
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28 Responses:
July 11th, 2010 at 10:13 pm
Here’s a Government rant to add, Went to the 39 & Cambie store couple days after July 1st, and Low and Behold lots of new stickers for new prices, and get this “Savings” first of all they had the old, price, then new expensive, price then discount, then they had a bunch of bottles with a savings of $1.23 or some odd number off a 100 + bottle of wine/scotch lol.
Waste of Paper, and Time, a joke
July 11th, 2010 at 10:41 pm
Also, we need some type of lobbyist that will lean on the government to make sensible decisions here and there. Financed by a group made up of restaurants and private wine shops.
July 12th, 2010 at 1:54 am
Well said Jake. I can certainly attest to utter shock that international wineries have when first introduced to the price hike here in BC from their expected retail in native countries (that being Australia). And dare I dream about BYO with corkage charge?
July 12th, 2010 at 8:31 am
Thanks Aren - interesting point. Corkage (bringing your own wine to a restaurant and paying a fee, $10-20 generally, to have the staff serve it to you) is something I’ve been thinking a lot about. It is huge in California. Some sommeliers struggle with it, as it can be a slap in the face based on what the guest brings (and chooses not to drink from your list), but many embrace it. Taylor’s Automatic Refresher in SF in the Ferry Building for example charges only $5 if you want to bring your own bottle of wine to drink with your burgers. For me, this is a way for restaurants to make pure profit - they didn’t have to invest in buying the wine in the first place, and from what I’ve found, many people who opt to bring their own bottle will often buy another one at the restaurant.
From what I understand, it is technically illegal in BC.
July 12th, 2010 at 10:38 am
What’s also frustrating of course is that even if one would consider the 12% HST input tax credit (ITC) a ‘discount’, which it isn’t, it’s still been reduced from what licensees received prior to July 1st. Our wholesale discount of approximately 9% plus the return of the 5% GST ITC totaled more than the 12% licensees we now receive - an ancillary benefit to provincial coffers.
I actually don’t mind the cash flow hit of not receiving my discount anymore as the greater amount of ITC’s dulls the blow of the amount of GST/HST I owe the government come collection time, as is the case whether one files monthly, quarterly, or annually. I just don’t appreciate the lack of consideration for our industry well demonstrated by making an already paltry and insufficient discount relatively smaller.
July 12th, 2010 at 1:54 pm
Hey Jake,
Great article, thanks. I am sure it spells out how the majority of licensee’s feel in BC these days. I know, a few years back, I did, even with the 9%ish discount. I somehow think that as Canadians we figure that we won’t be taken advantage of by the Government… but this proves to be a very naive position to take.
I’m on the other side of the business now, and amongst other things in the wine trade, i sort of broker Spanish wines… out of Spain. Very recently I had a good look at what the govt stores were carrying, to see what we had that would be a ‘good fit’ for them. We have a pretty diverse portfolio, so I was fairly confident that we would find some common ground. Sure enough, I was shocked at the limited selection of small producer, terroir driven wines… only a few, and high end… and a whole lot of mass produced grocery store level wines… it really gets me going. After a conversation with them, via another very helpful and interested party, it turned out that there were no ‘must haves’ for her. Ha! Seems that with the global wine glut they are really swinging some bargain basement deals with those large producers with the huge marketing budgets… I guess the likes of Campo Viejo is what BC is destined to identify Spanish Wine with. How sad : (
My feeling in the end was that they were really only looking for bulk level wines… that were bottled. It really made me feel sick to my stomach.
The taxation schedule, or mark up, most certainly dictates the lowest possible quality of wines to enter and move well in the market. It is a forced scenario that does not need to exist, but that does, and is tolerated.
The great news is that there are private wine shops that ARE interested in terroir driven wines. We are grateful to have relationships with a few of them, and do hope that the wine consumers of BC will support these stores in their efforts to bring in interesting products.
As well, there are MANY importers in BC that bring in fantastic selections of terroir driven wines that are listed as specs, and at the very least offer restaurants and private stores a much better selection than the regularly listed products. Thanks Guys!
Perhaps the consumer might like to have a look at the price that the Bodega sees as the bottle of wine leaves his cellar… comparatively, it might just make them cry. On the other hand, it might make them stand up and demand their right to a quality of life that includes good wines at a reasonable price, including a good selection to take home and enjoy in their own surroundings.
July 12th, 2010 at 2:54 pm
Very well said Jake, what a great rant! I stuck with you sir and stand firmly behind you. I find the whole thing an embarrassment and completely frustrating, it’s like some sort of sick joke.
I aint laughing dickhead.
Get it together BCLB.
Fucking goverments.
…all this page needed was some swearing. your welcome.
July 12th, 2010 at 10:06 pm
As long as consumers are willing to buy, pay for and drink crap, nothing will change. That is the state of wine in this province right now - the vast majority of consumers don’t care what they drink nearly as much as the price they pay and are not aware that they are being ripped off.
July 13th, 2010 at 10:39 am
Thanks James - you’ve helped me understand more about the input tax credit, which in the long run works out to a couple percent less. You’re right that the whole thing is a lack of consideration for our industry.
Wendy, thanks for reading. We’d love to see more thought -provoking, terroir-driven Spanish wines in our market - especially because I haven’t had the chance to enjoy many, but I understand how the markups make it discouraging and upsetting. I think this is true for many regions. I would love to see producers like Domaine de Belliviere from the Loire and Jacques Puffeney from Jura for example, but at the end of the day, who is going to pay $70 for a bottle of Pineau d’Aunis or Arbois Poulsard (besides me and maybe a few others)? That’s not even considering restaurant mark-ups! This makes me sad.
Cheers for the support Alex - I knew I could count on you for a little profanity.
Shea, I think most of the consumers in the province are content with the situation because they don’t know any different. You and I have both lived in the US (in one of the biggest wine markets in the US mind you) and know how drastically different (and better) a wine culture can be. Without this experience, I probably wouldn’t spend so much time being upset. It’s up to us to educate people that the grass is most definitely greener.
July 13th, 2010 at 11:22 am
What happened to the BCRFA’s anti-HST campaign that began with vigor last fall? Licensees were lobbied for financial aid to support the campaign - public rallies, government lobbying, social network and on-line petitions - then sometime in November…poof! Nothing. Not an email, letter, grimace or ‘ahem’. The BCRFA IS our lobby group. I’m not being critical because I feel they have value to the licensees, but was there some kind of backroom deal? Their very public campaign literally dried up and blew away with not so much as anyone noticing.
July 13th, 2010 at 11:26 am
To truly to get the Government to change is to show them, that they will make more moeny privatizing, which they would seeing as they don’t need to pay what is it 1.2billion in over head? I mean the Tax will always be there. If the privatize it, and leave the tax in place, and even lower it a bit, they would still make more money then running and paying Building/Employees/Storage etc etc.
The Government would win, more money for General Revenue for them to waste.
Weston~
July 13th, 2010 at 1:26 pm
From what I understand, the G’ment has not eliminated the Provincial Liquor Tax ( PLT ) , just eliminated the PST. Although at this time, the PLT is not being applied, they still have the ability and the power to turn the PLT back on if they find that their coffers are not as full as they would like.
I predict, and you can say you heard it here first, that the G’ment will turn this back on in 24 months when people adjusted to HST, even though they had raised prices to adjust for the percieved loss of income at the LDB, basically double dipping the citizens of Britiish Columbia.
July 13th, 2010 at 6:32 pm
Thanks for this perspective. It’s really not a tax itself that bothers me…it’s a tax (or taxes) applied inequitably and without some sort of transparency (x + y% = z).
Education of consumers is paramount for BC to see any sort of development and (hopefully) change. Dialogue is in there, too - so each stakeholder can see and hope to understand more than just one perspective.
Let’s keep the conversation going. I learn more each day.
July 13th, 2010 at 10:32 pm
Vic, that’s interesting. The BCRFA’s website doesn’t have any updates on the HST page since before the tax was implemented. I’d like to hear more about this.
Weston - I can’t pretend to understand the economics of operating the BCLDB, but I would imagine the private sector could do it more efficiently. Should our government still be handling the sale of Alcohol? Prohibition has been over for nearly 80 years.
Neil, let’s all just hope that your predictions aren’t true.
Thanks Jeannette - I agree that conversation and education on the major issues is important. Hopefully we can drum up more attention and media coverage.
July 13th, 2010 at 11:22 pm
Weston, that argument has been put before the BCLDB for almost a decade. Firstly, the union is fairly powerful and secondly when you already make a ton of money it is hard for bureaucrats to see any incentive to make more by eliminating their own jobs. And since they are the ones to feed the ministers with information, well…
July 14th, 2010 at 3:34 pm
I love this writing everyone - thanks for the passion, insights and encouragement.
As an agent, when I had to re-price our wines for post-July 1, I too was gobsmacked at the cheek the LDB had to raise the mark-ups further to rob BC of what would have been a genuine tax-cut. Who else in the world taxes liquor at the rates seen in BC? All to maintain a anachronistic, inefficient burden of an institution and a thorn in the side of hospitality, food and wine culture. I look forward to the day when the people of BC can throw off the LDB’s yoke that only retards the cultural enrichment of the province, and provides business with the freedom and incentive to operate is a truly business-like manner. I don’t think I will ever understand how the Federal Governement can on one hand enforce the Competition Act in every other aspect of commerce, yet turn a blind eye to blatent minimum-price fixing and collusive commercial processes and practices by the provincial governments.
Wendy et al, thanks for the encouragement on supporting terrior-driven wines and smaller producers. I chose from the outset that this was the path I wanted to take, and it’s nice to hear that there is support out there in the industry for that vision. You can learn more about our company, K+ARimports at http://www.kplusar.com.
July 15th, 2010 at 1:15 pm
My understanding was that there never was a wholesale discount for restaurants. My understanding was that the 9% was the credit for the 10% liquor PST that the restaurant would have to remit to the gvm’t when they sold the bottle. I assume there is a similar credit for the 12% HST, but that the process is now more difficult.
Naturally the fact that there is no discount for restaurants is absolutely comical. Restaurants take a lot of flack in the public eye because of high markups, but as Jake stated if we were in a normal place, they’d have a wholesale discount and would be able to make their points without the massive markups…
For those that don’t work in the industry, the extent of the evil the BCLDB brings is beyond simply the insane high prices. Delivery time for spec items is 2weeks - IF YOU’RE LUCKY. Furthermore trying to return faulty product is an exercise in jumping through many hoops. The shipping department makes an error on almost EVERY order they put out to licensees, on top of this when they notice the error, they don’t contact the customer, they wait for the customer to contact them (and presumably hope they don’t notice).
The overall sense is that there is an intentional attempt to make life difficult on private retailers, and in fact to discourage the public from shopping there (the handling of returns for example is vastly different at private stores than at a BCLDB store).
Cheers!
July 16th, 2010 at 1:53 am
More good points Aron. As someone eagerly awaiting the arrival of specs, I (and I’m sure anyone else who orders them on a regular basis) can vouch that whatever system the BCLDB is using to move a few cases of wine from a warehouse into a specific store is incredibly inefficient and inherently flawed. There is absolutely no incentive for good customer service - everyone MUST buy from the government. The Licensee employees are understaffed and their stress and frustration is obvious when dealing with many of them. I’m willing to bet that a private company would be able to get you your wine order in a few days - they’d be hungry as hell for your business and I can guarantee that you’d get a smile and a positive attitude. A little bit of friendly competition is all it would take to bring this out.
Also, strangely enough, yesterday I received a call from a wholesale LDB employee verifying that I returned a bottle of corked wine to Kits Wine Cellar about a month ago. They explained that the retailer couldn’t get refunded for this bottle unless I verified - an example of little things they do to make it a little more difficult on private retailers as Aron mentioned above. 1st point: shouldn’t they just be happy for the fact that the vast majority of faulted bottles never make it back for return anyways and cut their losses. 2nd: that’s an insulting use of my tax dollars - paying someone to sit around and call people who returned faulted bottles all day. How about we pay 122% markup on wine instead of 123%, and you eliminate ridiculous jobs like those.
July 16th, 2010 at 3:16 pm
They dont take a loss on returns. They turn around and charge the importer for them. It’s a brilliant make work scheme.
July 16th, 2010 at 3:37 pm
Continued…
I might as well keep compiling my rant here as I deal with issues related to the restaurant opening (tonight!)
Today I stopped by our second assigned store (Thurlow/Bute) to pick up one particular wine to get me thorough until more of our Specs arrive next week (because they usually take TWO WEEKS). There were 11 bottles of the wine on the shelf and I took 10. The manager at the store told me that he wouldn’t sell me 10 bottles and apparently a memo had gone out to licensees stating that for orders of over 6 bottles, you’d have to place an order (and wait the 48 hour turn around time). He told me he would only sell me 3 bottles. After I haggled with him and explained that the restaurant was opening tonight and I needed this wine to fill a hole on the list, he eventually agreed to sell me 5. He later told me that because they were a new store, the bigwigs were keeping a close eye on the store and a hole on the shelves wouldn’t look good. I’m not making this up. If it was a customer off the street, would they have denied the sale? Would a private store essentially refuse to take my money because it would make the shelf look empty? Hell no, they’d sell that wine and put something else there. Completely ridiculous.
July 19th, 2010 at 2:25 pm
This shelf space issue in the liquor stores has been making me angry ever since I heard about it. Like the people on here, I believe that consumers should be exposed more often to things they may not know already… after all, isn’t that how most of us find wines that knock our socks off? Sad.
As someone who does regular ordering for a private store, I can definitely vouch for the lack of care and (sometimes) incompentency of some of the LDB employees. Case in point, when dealing with the LDB regarding a couple of returned bottles from customers of my store who gave me numbers for the LDB employees to call to verify that they had indeed returned said bottles, I was told by an LDB employee that I was being denied my return because they could not get ahold of the customer. As she then put it, “We will try to call them two… maybe three times. If we don’t reach them then we can’t verify whether or not someone actually bought this wine and returned it for a valid reason. BUT, feel free to complain via email!”
Uhh….. huh?
Remember how EVERY bottle of wine in BC comes from the LDB anyways? Literally? What do you mean you can’t take it back because you can’t verify it’s origins?
It’s the biggest joke I’ve ever heard. Also, the least funny joke I’ve ever heard.
As far as spec product ordering, the kicker of that hilarious system is when they sometimes just fail to place an order so after waiting for it for the requisite 10 days and then not receiving you are told to ‘maybe try to place your order again’ and then lo and behold, 10 days after that you get double the amount you wanted in the first place because when you placed your second order they found your first order and well, sorry…. you ordered it. So deal with it or pay the 10% ‘restocking fee’ that you must cough up when they have to inconvenience themselves by putting things back on the shelf. This on top of the amazing new ‘can’t buy more then 6 bottles without placing an order and waiting 48 hours’. It is absolutely the worst customer service I have ever heard of. Consistently mind boggling.
And kudos to you guys for bringing attention to the amount of bullshit we have to deal with when involved with the LDB. As you can probably tell by my rant, I’ve been a frustrated buyer for awhile and it’s nice to know I’m not the only one.
July 19th, 2010 at 2:33 pm
As an afterthought, I do realize that this is not the fault of a lot of employees of the LDB but an issue that stems from up on high. Our liquor system in this province is so archaic and frustrating that sometimes its easy to forget that they are but cogs in the machine.
As ridiculous as it is from where I’m standing, I am certainly glad I’m not on the restaurant liquor-ordering side of things. From what I can ascertain you guys are really getting the worst of it.
July 19th, 2010 at 3:13 pm
Aron is correct, there never was a “discount” to licensee it was a tax factor not discount factor. The PST and GST were removed from the price and then the GST is charged back on the “now tax free” price. It seemed like a discount to alot of people but if we priced our liquor in this province before taxes rather than use value-added taxes no one would have been thinking there was ever a discount.
What gets me is there is one thing that should have dropped in price after HST and that’s liquor, it’s also the one thing the government has full control over and instead of giving us a little break they screwed us. Does anyone realize this was a $180,000,000 tax grab!
July 22nd, 2010 at 11:28 am
Santanna, I completely agree with your points, including that it isn’t the LDB employees that we should take our frustration out on. From what it seems, many of them are just as frustrated.
Bryan, I agree that we should have gotten a break, but they seized the opportunity.
August 4th, 2010 at 4:29 pm
Hello to everybody,
This is really an interesting forum with very helpful comments that are coming right from the real practice and not from theoretical guidelines and documents provided from the LDB. I “might” be interested in trying to import wine and spirits here in BC, but I still haven’t taken my decision…. it really seems…weeeell protected for the domestic alcohol industry which is understandable – any country in the world has custom duties, taxes, mark-ups, and so forth to protects its domestic industries. At the same time statistics say that BCLDB made $460.5 million on imported wines for 2009 in comparison to $398.2 million for 2008, which is a whoooole 15.7% growth.
Now I would like to ask you a question which for some of you would be probably self-explanatory, but nevertheless I would appreciate very much, any answers or comments you might have.
Ok, here we go… first I want to list the whole import process that is described in one of the BCLDB guidelines under option B(supplier sells to distributor and distributor resells to LDB):
1. BCLD issues PO to distributor (registered for GST)
2. Distributor arranges for shipment of Product to Sufferance Bond Warehouse in Commercial Warehouse in B.C. BCLDB acquires notional title of product upon physical arrival in BC.
3. BCLDB issues request for customs clearance (within 21 days for spirits, 40 days for wine). Product transferred from Sufferance Bond to Excise Warehouse. BCLDB acts as Importer of Record paying GST and Customs Duty (Product Excise Duty deferred) to the CRA.
4. BCLDB charges the GST (on Prime Cost & Customs Duty) and Customs Duty back to the Distributor.
5. BCDLB issues Excise PO to Distributor. All costs (product, customs duty, freight allowance, domestic charges) are subject to GST where applicable.
6. Product shipped from Commercial Excise Warehouse to BCDLB Excise Warehouse / BCDLB takes physical possession and assumes risk of loss of Product.
7. BCDLB pays an amount for the Product to the Distributor. The amount paid comprises the following:
• Prime Cost (original PO amount including delivery to Canada)
• Customs Duty
• Domestic Charges (costs incurred in Canada – warehouse costs, handling, agents profits)
• Freight Allowance Credit
• GST (on prime cost, customs duty, domestic charges, freight allowance credit) where product owner has provided GST # to the BCDLB.
8. BCDLB removes Product from BCDLB Excise Warehouse for delivery to retail outlets and pays Excise.
My question relates to subsection 4, and also I’ll use one of their scenario examples so I can base my question on it.
Lets say I import 900 12 bottle cases for the prime cost of say $60:
900 x $60 = $54 000
HST @12% = $6480
Gross: $60 480
————————–
Customs Duty
$0.17 (according to the new pricing simulator) x 900 cases = $153
HST @12% = $18.36
Gross: $171.36
Then Customs Chargeback (for the distributor) invoice prepared by BCDLB on customs clearance: Customs Duty plus HST on prime cost or in our case: $6480 + $171.36 = $6651.36
Then finally we sell let’s say 30 cases:
Pime cost - $60 x 30 = $1800 - HST on that = $216 - gross = $2016
Customs Duty – $0.17 x 30 = $5.10 - HST on that = $0.61 - gross = $5.71
Freight All – 0.40 (average per bottle from Europe) x 360 (30 cases x 12 bottle) = $144 HST on that = $17.28 - gross = $161.28
Domestic Charges – 17$ (roughly including warehouse, insurance and agent’s commission per case) x 30 = $510 - HST on that = 61.2 - gross = $571.20
OR
Total amount: $2459.10
Total HST amount received from the sale: $295.09
AND HERE MY QUESTION COMES. Do we have to pay this GROSS amount of HST which is $6480 right after BCLDB prepares the chargeback invoice (like at the end of the month)? OR we pay off this amount after each sale of our products – in this case we received $295.09 from the sale of 30 cases, so we apply this HST amount received of $295.09 to the HST amount of $6480 ($295.09 - $6480 = $6184.91 left) paid by LDB?
Thanks in advance to all of you that took the time to answer my question!
Cheers!
August 7th, 2010 at 12:37 pm
European Man - sorry, I’m not sure I can help you with that - more of a technical question for another agent perhaps.
August 17th, 2010 at 7:26 pm
Frustration abounds amongst those who understand the sheer magnitude of power the LCB exercises against the people of British Columbia…thank you so much for educating the few of us who have taken the time to try to understand the complexities of a Government rotten to the core.
Until more people get what’s going on we will not change a thing in BC, it is so outrageous it defies belief, reading other peoples comments does bring encouragement that at least some here in BC now know the truth, THANK YOU!