The SAQ is going to drop the price on 1,600 bottles of wine by 50 cents as part of a three-year project to put prices in line with the LCBO.
The price drop comes into effect on Nov. 9, and is the result of a major revision in how the SAQ sets its prices for wine. The effects wines in the $15 range, which is says is the majority of its wines sold.
SAQ CEO Alain Brunet said it was the first step in a three-year plan to reduce wine and alcohol prices in Quebec to eventually match the price of wine and liquors at the Ontario liquor board.
Quebec's liquor sales company has a regressive mark-up scheme which runs from 130 per cent markup on a $9.85 bottle to 66 per cent on a $120 bottle.
Across the border in Ontario, the LCBO has a flat markup on 71.5 per cent on all bottles of wine. That makes cheap bottles about $2 less expensive in Ontario, and more expensive products a deal in Quebec.
Finance Minister Carlos Leitao said the price changes at the liquor board were prompted by a report from the Auditor General.
Earlier this year the Auditor General said the SAQ was not a good negotiator, and its contracts did not include standard clauses to provide discounts on bulk purchases.
Sommeliers and other wine experts said Quebec is also under pressure to reduce trade barriers between provinces, and that includes alcohol pricing.
Marco Giovanetti said the price cut will likely help the SAQ's image.
"The SAQ has in a way alienated the average customer but with this move I think it will regain back some of the customers," said Giovanetti.
The SAQ routinely earns more than $1 billion in profit each year, which is used as provincial government revenue.
The SAQ said it should be able to maintain that revenue, even with the reduced profit margin, because it plans to restructure through cuts and fewer management fees.
