Canadian Alcohol Tax to Increase by 2% from April 1, 2023
The increase is considerably lower than the 6.3% increase that was initially anticipated.
Canadians may see a minor increase in alcohol prices beginning on April 1 as a result of the government’s planned 2% tax increase on beer, wine, and spirits. The excise tax, which is a 2017 policy, will be imposed directly on companies at the point of production and will annually alter the tax rate depending on the consumer price index. Although the fact that the increase is considerably lower than the 6.3% increase that was initially anticipated, it nevertheless puts further strain on firms who are already dealing with growing costs because of rising input prices for things like aluminium, raw materials, barley, and hops.
Any changes to retail costs will depend on beverage alcohol producers, who establish their own prices subject to minimum retail prices and modify pricing throughout the year, according to an LCBO representative. Pricing can also be impacted by variables including exchange rate changes, federal taxes, changes in freight rates, and price changes by rival businesses.
Because that margins are already slim, Cam Moser, Senior Manager of Craft Brewery Finance at Canadian Western Bank, predicts that the majority of the increase will be passed on to customers. He does, however, think that customers might not immediately notice any big effects.
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