Federal Excise Duty Exemption on 100 per cent Canadian Wine to be Repealed June 30, 2022 (Including 100 per cent Canadian Cider, Wine Coolers, Fruit Wine, and Sake)
As you may be aware, the 2022 Canadian Federal Budget announced plans to repeal the exemption of the federal excise duty that domestic suppliers receive for their 100 per cent Canadian-manufactured wine, cider, wine coolers, fruit wine and sake – herein referred to as “Impacted Product”. The repeal of the exemption will become effective June 30, 2022.
Suppliers can view the latest federal excise duty rates according to their product-type here.
Implications for Supplier Pricing
As the BC Liquor Distribution Branch (LDB) will continue to purchase Impacted Product at the Duty Paid Cost, it is the responsibility of suppliers to remit excise duties to Canada Revenue Agency. Suppliers that wish to adjust their Duty Paid Cost (i.e. supplier price) must submit a Price Change Request to LDB by May 20, 2022 in order to take effect for the Period 4 wholesale price list beginning July 3, 2022. If suppliers do not make a change to their price for Period 4, LDB will assume that the current supplier price includes the excise duties.
LDB Wholesale Pricing Calculators have been updated to incorporate excise duty rates into pricing models.
Please note that LDB does not permit Wholesale Price Promotions (WPP) and Price Changes within the same period. Price Changes cannot be made to SKUs that suppliers plan to put on WPP in Period 4. For these SKUs, Price Change Requests must be submitted for Period 5. The Period 5 price submission deadline is June 17, 2022 and price changes will become effective on July 31, 2022.
BC VQA Rebate Program
Suppliers should be aware that rebates for LDB-distributed BC VQA wines are calculated based on the in-bond cost of the product. The calculation does not take into account excise duty paid by the supplier.
If suppliers do not make a Price Change request for Period 4, July 3, 2022, LDB will assume that the current supplier price includes excise duty and deduct it from the supplier price to calculate the in-bond cost. This in-bond cost will then be used to calculate the 50 per cent VQA Rebate for Period 4 receipts of BC VQA wines into LDB Distribution Centres for all POs received on July 3 and onward. As a result, the VQA Rebate payment will be reduced by 50 per cent of the excise amount compared to the currently calculated amount.
For any questions on VQA rebates, please contact LDB BC VQA Support: BCVQASupport@bcldb.com.
For any questions on price changes, please contact firstname.lastname@example.org.
Thank you for your attention to this matter.