Manitoba’s liquor policy gets a ‘C’ by Restaurants Canada

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This article was published 26/07/2022 (786 days ago), so information in it may no longer be current.

Cocktails and wine at restaurants would be cheaper if the provincial government joined most of Canada and offered wholesale pricing to foodservice businesses, industry advocates say.

“The more we have to pay, the more people are going to have to be paying,” said Anthony Cantafio, La Carnita’s general manager.

Manitoba is one of two provinces to not offer reduced prices on alcohol to restaurants and other foodservice ventures, according to James Rilett, Restaurants Canada’s vice-president for central Canada.

It’s a main reason Manitoba received a ‘C’ in Restaurants Canada’s liquor policy report card. Just Saskatchewan received a lower grade than Manitoba, with a ‘C-‘.

“Some people, they don’t want to spend the markup price on the weekends. They’ll just buy a bottle or whatever (at a liquor store) and spend (time) at home,” Cantafio said.

He noted many people grab drinks when out, even during times of high inflation. Still, reduced pricing at a wholesale level means restaurants could offer cheaper drinks, depending on their business models.

“I would love to see it happen… It’ll just be busier (customer-wise) all around,” Cantafio said.

The change might negatively affect the government’s bottom line, he noted.

Manitoba garnered a net income of $508,142 through liquor sales in 2020-21, according to Statistics Canada’s latest available data.

“It’s a pretty common, basic business practice that businesses pay less for their product than (individuals),” Rilett said.

Restaurants Canada released its report Wednesday. Manitoba has consistently gotten a ‘C’ over the last seven years.

The group calls on Manitoba to make wholesale pricing available and reduce red tape, including allowing licensee-to-licensee liquor sales. It also recommends introducing a liquor server wage.

Restaurants and other liquor licensed venues can buy beer at a 14 per cent discount, a spokesperson from Manitoba Liquor and Lotteries wrote in a statement. The vendors pay the same retail price for wine and spirits as regular customers.

“Pricing is something MBLL is exploring as part of a larger review of our operations,” the spokesperson wrote. “We are in the early stages of this assessment and have identified wholesale pricing as a key initiative.”

Wholesale pricing is not a discount, the spokesperson added.

Some of Restaurants Canada’s concerns will be addressed if Bill 38 passes, Rilett said. The bill — which would modernize liquor regulations — could undergo a second reading later this year.

“(Manitoba’s grade letter) will definitely go up as long as Bill 38 passes,” Rilett said.

He praised the proposed legislation for making it easier to get a liquor licence and for broadening the scope of what such licences allow.

Bill 38 — the Liquor, Gaming and Cannabis Control Amendment Act — would eliminate liquor licence categories and reduce regulations on businesses serving alcohol.

“It shows that the government is willing to blaze new ground,” Rilett said.

In its report, Restaurants Canada flagged federal excise duties, which increase annually, as a hardship for pandemic-hit businesses. Restaurants Canada pegged cumulative taxes on alcohol at $747 million this year, up from $526 million in 2021 and $355 million in 2020.

Manitoba does not tax the alcohol foodservice businesses buy, a provincial spokesperson noted. Manitoba Liquor and Lotteries applies liquor markups for costs associated with buying and distributing.

“What you’re seeing is (restaurants) keeping less stock on hand,” Rilett said. “Their debts are higher, so they can’t keep as much of any stock — food, drinks.”

Escalated costs due to inflation have kept customers from eateries’ doors, he noted. At the same time, companies are paying more to produce meals and keep the lights on.

A nationwide labour shortage means the industry is operating an average 80 per cent of its regular hours — 20 per cent less than pre-pandemic, Rilett said.

“It’s not a great time,” he said. “We’re cautiously optimistic.”

Quebec is the only other province without wholesale alcohol pricing for the foodservice industry, Rilett said. The nation dropped from a ‘B-‘ in Restaurants Canada’s last report to a ‘C’ this year.

Pre-pandemic, Manitoba had a $2.7 billion restaurant industry, according to Restaurants Canada.

gabrielle.piche@winnipegfreepress.com