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PRICING ADMINISTRATION David Cacciottolo Manager, Pricing Administration - LCBO
Agenda • LCBO Pricing • Recent Changes • Future Changes • Online Resources • Pricing Calculators • Quote change schedule • Q&A
What We Do Price all LCBO and private stock products
TBS Pricing
Implement changes to pricing policy
Recent Pricing Changes
• March 1 – MRP and beer fees • April 1 – Excise tax, wine markup
increase, markup harmonization, COSD
Future Pricing Changes Changes Effective Date
MRP Annually on March 1
Beer Cost of Service Annually on March 1
Beer Basic Fee Annually on March 1 November 1, 2018
Wine Markup April 2019 (1% increase)
Excise Annually on April 1
Cost of Service Differential (COSD)
Previously Ad Valorem differential within markup • +6% on imported wines and • +7% on imported spirits.
New fixed per litre rate; regional specific • Domestic and imported markup harmonized • Driven by CETA agreement
COSD Values
ORIGIN WINE SPIRITS COOLERS
DOMESTIC 0.000000 0.000000 0.000000
NAFTA 0.315880 1.239000 0.110530
CETA/ EU 0.601520 0.972990 0.813810
Other 0.649550 1.550290 1.304880
Please note: To have the correct rate applied, suppliers must submit a declaration of origin prior to the beginning of each calendar year. If no documentation is received, the ‘other’ rate will be applied.
Markup Harmonization
Table Wine Prior to April 2018 April 2018
Ontario 69.5% 71.5%
Canada - out of province 75.5% 71.5%
U.S & Imports 75.5% 71.5%
Whisky Prior to April 2018 April 2018
Domestic 139.7% 139.7%
U.S 146.8% 139.7%
Imports 146.7% 139.7%
Wine Examples Before and After COSD
ORIGIN QUOTE PRICE CURRENT PRICE April 30
DOMESTIC $50.32 CAD $9.95 $10.05
NAFTA $36.67 CAD $9.95 $10.00
CETA/ EU $36.67 CAD $9.95 $10.25
OTHER $36.67 CAD $9.95 $10.35
ORIGIN QUOTE PRICE CURRENT PRICE April 30
DOMESTIC $112.98 CAD $19.95 $20.20
NAFTA $97.18 CAD $19.95 $19.80
CETA/ EU $97.18 CAD $19.95 $20.00
OTHER $97.18 CAD $19.95 $20.15
Spirit Examples Before and After COSD
ORIGIN QUOTE PRICE CURRENT PRICE April 30
DOMESTIC $70.92 CAD $26.70 $26.85
NAFTA $67.60 CAD $26.70 $27.15
CETA/ EU $67.20 CAD $26.70 $26.85
OTHER $67.20 CAD $26.70 $27.45
ORIGIN QUOTE PRICE CURRENT PRICE April 30
DOMESTIC $173.95 CAD $49.95 $50.10
NAFTA $167.67 CAD $49.95 $49.75
CETA/ EU $167.31 CAD $49.95 $49.45
OTHER $167.31 CAD $49.95 $50.05
Cooler Examples Before and After COSD
ORIGIN QUOTE PRICE CURRENT PRICE April 30
DOMESTIC $28.48 CAD $2.95 $2.95
NAFTA $27.21 CAD $2.95 $2.95
CETA/ EU $27.16 CAD $2.95 $3.30
OTHER $27.16 CAD $2.95 $3.55
ORIGIN QUOTE PRICE CURRENT PRICE April 30
DOMESTIC $18.40 CAD $12.25 $12.25
NAFTA $17.56 CAD $12.25 $12.15
CETA/ EU $17.52 CAD $12.25 $13.85
OTHER $17.52 CAD $12.25 $15.05 *6 pack can
*473ml can
Overview of online Resources
Step 2
Step 1
Online Resources
Wine Calculator Key Fields: • Excise Rate • Duty Rate • Origin • Type of Wine
Spirit Calculator Key Fields: • Alcohol • Origin • Excise Rate • Duty Rate
Cooler RTD Cider calculator Key Fields: • Alcohol • Excise Rate • Duty Rate • Type • Origin
Beer Import calculator Key Fields: • Excise Rate • Duty Rate • Brewery Type
Beer Ontario Calculator Key Fields: • Store (S), Warehouse (W) • Refillable • Container Type • Brewery Type
Instruction Tab
Reference Tab
Gift calculators Key Fields: • Liquid cost • Package Cost • Origin • Duty • Excise
Quote Increase Schedule 2018 - 2019 Date to Pricing Quote Effective Date Retail Change*
Domestic February 26, 2018 April 2, 2018 April 30, 2018 April 2, 2018 April 30, 2018 May 28, 2018 April 30, 2018 May 28, 2018 June 25, 2018 May 28, 2018 June 25, 2018 July 23, 2018 June 25, 2018 July 23, 2018 August 20, 2018 July 23, 2018 August 20, 2018 September 17, 2018 August 20, 2018 September 17, 2018 October 15, 2018 September 17, 2018 October 15, 2018 November 12, 2018 October 15, 2018 November 12, 2018 December 10, 2018 November 12, 2018 December 10, 2018 January 7, 2019 December 10, 2018 January 7, 2019 February 4, 2019 January 7, 2019 February 4, 2019 March 4, 2019 February 4, 2019 March 4, 2019 April 1, 2019
* The retail price for imported products will change following receipt of goods purchased at the revised quote.
Quote Changes • Increases permitted 13 times per year • Decreases anytime • Domestic price change as per schedule • Imported price change follows receipt of PO
Grocery Products • Pricing is initiated by suppliers • Quote and price change schedule – same as LCBO products • Price decreases are permitted • Minimum prices for wines