Montreal, May 16, 2022 – Next Sunday, May 22, at a time when the supply chain is experiencing disruptions and shipping costs are increasing even as suppliers’ production costs are on the rise, the SAQ will implement an upward price adjustment averaging 3.7% on 2,550 products always available on the company’s shelves and website.
“As I’ve had occasion to mention in recent weeks, our suppliers are facing major challenges while inflation is reaching new heights worldwide,” said Catherine Dagenais, President and Chief Executive Officer of the SAQ. “Our teams have bargained hard with suppliers to maintain the right balance between offering fair and competitive prices to customers and addressing the legitimate concerns of suppliers dealing with these challenges.”
Regular and continuous replenishment products (more than 90% of the SAQ’s annual sales)
|Number of price increases||2,550|
|Average increase||$0.78 (3.7%)|
|Number of price decreases||182|
|Average decrease||-$0.62 (-2,1%)|
|Number of products with stable prices||606|
Regions most affected
- Beaujolais: 6.4%
- Burgundy: 7.7%
- Loire Valley: 5.5%
Of the 2,550 products experiencing a price increase, some 80 will have their adjustment postponed until July 17, 2022, because they are currently on promotion.
Reasons for the price adjustment
Ocean transport rate increases and supply chain disruptions
Shipping costs are rising, placing additional pressure on the costs of the SAQ, which is committed to maintaining an exceptional product offer for customers. Moreover, since late 2020, the global supply chain has experienced widespread disruptions that have complicated product shipping, especially ocean transport, often necessitating route changes and longer lead times.
Increase in suppliers’ production costs
Also, a sizeable number of suppliers have seen their production costs rise in recent months. Shortages of dry matter (glass, corks, labels, etc.), items necessary to bottle and ship products, are placing significant pressure on prices. Adding to these challenges is a labour shortage affecting several of our producers around the globe.
The unfavourable weather conditions of 2021 continue to affect the offer of products in some winegrowing regions, with reduced availability of some items and continued high demand. The situation persists in some regions, including Beaujolais and Burgundy, and their products are seeing the biggest price increases.
Higher excise taxes on beverage alcohol products
On April 1, the Canadian government carried out its annual increase in the excise tax rate on beverage alcohol products. For wine, the rate rose 2.4%. The rate increase is another factor impacting the price adjustment process.
Batch order specialty products (less than 10% of the SAQ’s annual sales)
It should be noted that the prices of specialty products, which are usually stocked in the Cellier Space, are negotiated on a batch-by-batch basis and can vary depending on the market. On May 22, prices will increase 3.3% for 1,328 specialty products and decrease 2.6% for another 157.