Please be advised of the following updates and changes:
Federal Excise Tax
Reminder - On April 1, 2021, the Federal Excise Tax will increase based on the consumer price index. The updated rates and requote process will be communicated in a follow up letter once rates are confirmed. Please keep in mind the below changes to COSD rates and process when requoting to include the updated excise changes.
Updates to Cost of Service Differential Rates (COSD)
COSD – applicable to spirits, wines (including packaged cider) and Ready to Drink. The following per-litre rates for imported products are derived from an independent audit of LCBO’s financial and operational data and will come into effect April 1, 2021.
COSD $/Litre | Spirits | Wine/Cider | Coolers |
EU | $0.5651 | $0.3790 | $0.7028 |
NAFTA | $0.2986 | $0.2616 | - |
CPTPP | $1.7479 | $0.2959 | $0.9172 |
Other | $1.7479 | $0.6753 | $0.9172 |
Updates to the Application of COSD Rates
Currently COSD rates are determined based on the certificate of origin submitted by suppliers. Depending on the certificate of origin a preferential COSD rate may be applied. If no certificate is submitted, then the ‘Other’ COSD rates are applied.
NEW - the way the LCBO implements COSD rates will change and be based on the country of origin and NOT a submitted certificate of origin. The country of origin is maintained at item set up when the LCBO lists a product. Based on the country of origin, COSD rates will be applied based on region of origin groupings. For example, if a product is from France, it will now receive the appropriate CETA COSD rate as France is part of the CETA region, regardless of if the supplier has sent in a certificate of origin or not. Country and region groupings can be found in the COSD Country Grouping List document below.
COSD Country Grouping List
The new COSD process noted above will be applied to new LCBO products and Private Orders starting Thursday, April 1, 2021. LCBO Continuously available products will be re-priced for effective date Monday, April 26, 2021 onwards.
Please note Certificates of origin declarations are still required if you desire preferential tariff treatments with regards to duties. This process is still in place and you should follow the existing guidelines as required.
Key Dates
The new Excise and COSD rates will be applied to new LCBO products and Private Orders starting Thursday, April 1, 2021. LCBO Continuously available and Vintages Essentials products will be re-priced for effective date Monday, April 26, 2021 onwards.
For suppliers of continuously available LCBO or Vintages products who wish to submit revised quotes, please note the following key dates:
Monday, March 1 - revised wholesale quote deadline
Thursday, April 1 - wholesale quotes effective
Monday, April 26 - retail prices effective
Retails will automatically be adjusted based on the new Excise and COSD rates effective April 26, 2021. If the Supplier wishes to maintain their current retail on that date, they must submit a rebate quote letter, separate from their above-mentioned quote filing. The quote letter must state: “The supplier will pay to reduce the cost of inventory on hand and on order”. These rebate quote letters are due by Friday April 2, 2021 for processing and should clearly indicate in the title of the email that this rebate is for the April Excise Filing. *Please note - if you choose to rebate, two separate quote letters are required: 1. The quote you require posting for April 1st based on the new rates noted above; 2. The rebate quote letter to maintain on shelf pricing based on current pricing variables.*
As mentioned above, please include the changes to excise rates once communicated when providing your requotes.
Beer Price Change Schedule
The submission schedule for beer price changes will be modified to allow for the administration of the increase in federal excise. Once excise rates are confirmed, please use the below timeline as required for pricing updates. Please note COSD rates are not applicable to beer. The schedule is as follows:
· Tuesday April 6 – Submissions and imported supplier quotes due by 4pm for April 26 change
· Monday April 12 –no price change submissions will be accepted
· Monday April 19 – no beer price changes; submissions accepted for May 3 retail effective
· Monday April 26 – new excise tax rate and retail prices in effect. Regular submission and price change schedules resume
For brewers of domestic beer listed at TBS, LCBO or Grocery
To maintain the current retail price, no action is required. The change in excise tax has no impact on the retail price as domestic beer is purchased “excise paid.” If a change in price is desired, please submit the Beer Price Submission form.
For brewers of imported beer
To maintain the current retail price, a revised wholesale quote is required along with a completed Beer Price Submission form. The quote letter must state: “The supplier will pay to reduce the cost of inventory on hand and on order.” If no revised quote and Beer Price Submission form is received, the new excise tax will be applied to the landed cost and the product will be re-priced accordingly. Please note: For products listed at TBS, no changes will be made to licensee prices or pack-up prices unless requested by the brewer on the Beer Price Submission form. All supplier quotes and beer price submissions must be sent to pricing@lcbo.com.
Updated Pricing Calculators
Revised April 2021 pricing calculators for ALL products including the updated excise and COSD rates will be posted once the excise rates have been confirmed. When updated they will be posted in the Pricing section.
Questions may be directed to my attention at pricing@lcbo.com
Thank you for your continued support and partnership.
Sincerely,
Kyle Baker
Manager, Pricing Administration
Cc: Abhay Garg, Vice President, Merchandising