LCBO Prices Could Go Up This Year Thanks To The Alcohol Tax Hike & Here's What To Expect

Just like everything else related to the cost of living right now, the cost of alcohol in Canada is set to go up in 2023.

A 6.3% alcohol tax hike is set to take effect on April 1, and here in Ontario, it means that, whether it be at the LCBO, the Beer Store or in the grocery aisle, prices you pay for beer, wine, and spirits are about to go up.

But the big question is by how much and if we'll see these price increases right away.

"It's just coming in at the worst possible time," said Beer Canada President CJ Hélie in an interview with Narcity. "Consumers are feeling pinched everywhere. Whether their rent increases or mortgage costs increase or food costs or gasoline or travel —everything's up. [...] Nobody's feeling very comfortable about their financial situation."

Hélie said as of right now, the price for beer across Canada is up 6.9% from a year ago, but with the 6.3% tax set to take effect at the beginning of April, he doesn't actually expect a dramatic change, at least not immediately.

"It's hard to predict exactly, but the specific increase is about 10 cents for [a] 12-pack [of beer] directly," he said, but further explained that when adding in other taxes or markups into the equation, "you're looking at double that."

"In Ontario, the impact would be the 10 cents on excise, plus 13% HST," Hélie said.

While that's the price hike you can expect for a case of beer, according to the LCBO, the sticker shock on wine, spirits or imported beer will vary depending on what you buy.

"Our suppliers set their own pricing (subject to minimum retail prices) and have the option to adjust their pricing up or down throughout the year in response to currency fluctuations, federal taxes or freight rate changes, or price changes by their competitors," an LCBO spokesperson told Narcity. "Therefore, any retail price increases are on a product-by-product basis and determined by beverage alcohol producers."

The spokesperson said the price you see in-store or online is a combination of a supplier's price, a standard markup, and a combination of various other taxes and fees.

But as consumers stare down the reality of another cost increase, experts are hoping the federal government will back down on their plans.

"We thought it was going to be this small modest increase every year," Hélie said, regarding Canada's annual alcohol tax hike, which is based on inflation and until this year, had represented a 1-2% price jump. "We understand that the industry and consumers really can't handle a 6% increase."

"Everybody who drinks beer notices the prices are creeping up and I think there is sort of a political risk to people who want to screw with people's access to beer or the price of their beer," Hélie said.