Earlier, we reported the Campbell administration decided to cut the price private liquor stores have to pay to purchase alcohol from the government without first telling the public. But they weren't keeping any secrets from industry players. In letters dated November 20, 2006, liquor distribution branch executive director Roger Bissoondatt told licensee retail stores, breweries, import beer warehousers and wineries, the provincial government would be making that cut. This, according to records obtained by Public Eye via a freedom of information request. The cut will cost the government up to $31.1 million in lost revenue. The following is an edited copy of one of those letters.

November 20, 2006

To: All British Columbia Licensee Retail Stores

RE: LICENSEE RETAIL STORE (LRS) PURCHASE DISCOUNT RATE

This is to advise you that effective January 28, 2007 (Period 11), the LRS purchase discount rate will increase from 13% to 16%. The new rate will apply to all products shipped on or after January 28, 2007.

The 16% purchase discount rate will result in a discount factor of 23.241% off the display price. The new rate will also change the effective GST (included in the display price) factor to 4.345%. The new factors are calculated as follows:

13% Discount

Display Price (includes GST and SST) $232.00
Retail Price (excludes GST and SST) $200.00
Less: Purchase Discount (26.00)
Subtotal 174.00
Add: 6% GST 10.44
Total: Amount paid 184.44
Reduction from display price (Display less amount paid) $47.56
LRS discount factor (Reduction amount divided by display price) 20.500%
GST factor (GST anmount divided by display price) 4.500%

New 16% Discount

Display Price (includes GST and SST) $232.00
Retail Price (excludes GST and SST) $200.00
Less: Purchase Discount (32.00)
Subtotal 168.00
Add: 6% GST 10.08
Total: Amount paid $178.08
Reduction from display price (Display less amount paid) $53.92
LRS discount factor (Reduction amount divided by display price) 23.241%
GST factor (GST anmount divided by display price) 4.345%

If you have any questions, please contact Dal Hayre, the LDB's Acting Revenue Comptroller.

Yours truly,

Roger M. Bissoondatt
Executive Director, Finance

cc: Mr. Jay Chambers, Liquor Distribution Branch
Mr. Gord Hall, Liquor Distribution Branch
Ms. Kelly Wilson, Liquor Distribution Branch
Ms. Katharine Jowett, Liquor Distribution Branch