As consumer prices trend upward
The SAQ limits price adjustments for its products
• Increase of $0.30 or 1.21% on 1,827 products
• Decrease of $0.33 or 1.5% on 700 products
• Prices remain stable on 586 products
Montreal, May 18, 2021 – Next Sunday, May 23, the SAQ will adjust the prices on 2,527 continuous replenishment products sold to customers.
While consumer prices are rising sharply in some industries and the SAQ’s expenses are increasing as pressure from producers to hike prices is growing, the SAQ is negotiating doggedly to limit any price increases.
As a result, the prices of 1,827 products will increase an average of $0.30 or 1.21%. Of this number, around 100 are currently on promotion and so will see their increases postponed until July 18. In addition, 700 products will see their prices drop an average of $0.33 or 1.5%, while the prices on 586 products will remain stable.
“We’re committed to offering fair and competitive prices to our customers,” said Catherine Dagenais, President and Chief Executive Officer of the SAQ. “Our Category Management teams have detailed knowledge of the various markets and products. They’re in touch with producers, suppliers and agents both here and abroad and they drive a hard bargain so we can offer our customers prices that are among the lowest in Canada, year in, year out.”
Factors influencing price adjustments
Prices adjustments for products sold at the SAQ are influenced by a variety of external factors.
Producer price increases
Requests for product price adjustments from producers are related to increases in various costs (labour, raw materials, etc.) and are subject to negotiation by SAQ teams.
For several months now, a pandemic-related worldwide reduction in maritime transport capacity has resulted in delays in order pick-ups by freight forwarders, congestion in several strategic ports and a market shortage of empty shipping containers.
As in several other industries and business segments, this instability has prompted the SAQ’s main freight forwarders to raise their freight charges for products from Europe and New Zealand. An initial increase totalling $11 million was imposed on the SAQ effective March 1. This increase will be reflected in the product prices to be adjusted on May 23.
Moreover, freight forwarders have implemented two additional freight charge increases since April 26. These will be reflected in a special retail price adjustment slated for July 18.
“The current global situation in maritime transport is having a significant impact on our product acquisition costs,” Ms. Dagenais explained. “Freight forwarders’ adding surcharges to our shipping fees – despite agreements protecting us from market fluctuations – has generated additional costs for the SAQ. This, in turn, has affected the retail prices for our products from the regions concerned.”
The SAQ has also been informed that yet another round of freight charge increases could occur in the coming months. If and when the need arises, the company will be transparent in informing customers of the effect the increases will have on its price adjustment process.
Adjustment of the excise duties on beverage alcohol
On April 1, the Canadian government implemented its annual increase in the excise duties on beverage alcohol products. This increase is another factor impacting the price adjustment process.
For the current excise duty rates, see the Canada Revenue Agency website.
The appreciation of the Canadian dollar in recent months has allowed the SAQ to lower the retail prices on all the products it pays for in foreign currencies. At present, 80% of the products purchased by the SAQ are paid for in Canadian dollars, 18% in euros and 2% in U.S. dollars.
About the Société des alcools du Québec (SAQ)
Created in 1921, the SAQ imports, distributes and sells a broad range of wines, beers and spirits. Its sales network comprises 410 stores and 426 agency stores located throughout Quebec as well as a transactional website, SAQ.com. Driven by the passion and know-how of its 7,000 employees, the SAQ offers Quebecers a world of discovery, with more than 35,000 products from 3,700 suppliers in 80 countries. In fiscal 2019-2020, the SAQ supported some 300 organizations and events and paid a dividend of $1.226 billion to the Quebec government, while also ensuring its business activities respected local communities and the environment.