Wednesday, February 28, 2007

Will higher recycling fees raise BC wine prices?

....Or more to the point, in a wine-retailing universe where pricing is already clinically psychotic, will anybody notice?

There's been a lot of rending of garments in the press by some B.C. winemakers over the upcoming April 1st jump in environmental fees on bottles and cans. But in contrast to all the other factors that contribute to the cost of your bottle of, say, Blasted Church Pinot Noir, the 7-cent enviro-rise is going to be pretty small beer.

So why the fuss? Because---at least according to the BC wine institute---producers will either have to eat the increase themselves, or lose their precious "price points" of, for example, $9.95, $14.95, or whatever. Now, given that we're talking about an increase of something less than 1/2 of 1% on a $16 bottle of wine, it's hard to shed more than a few crocodile tears here---especially since, depending on where you shop, those classic $XX.95 price points may not even exist. And if a private retailer is setting profit margins based on a consistent percentage---say, 20%---those classic price points have already perished in a haze of percentage and decimal points.

So what'll we see? Not much: private retailers may make adjustments up or down (which they might do for 1001 other reasons anyway) and producers will raise prices where they can and eat the fee increase where they feel they can't. In other words, it'll be business as usual, people.