Friday, July 11, 2008

My Favourite Cash Grab

Since I'm on a friendly rant talking about a great Canadian tradition, the cash grab, here's my favourite. And yes, there seems to be a petition for it too. And yes, I also complain about this blatant cash grab, but still somehow to manage to plunk down the cash for it.

A case of twenty-four Labatt Blue, brewed in Canada, sold at a Buffalo-area duty free store - US$15.00 . So, roughly $15 Canadian.

A case of twenty-four Labatt Blue, brewed in Canada, sold at a Toronto-area beer store - CD$39.50 . So, exactly $39.50 Canadian.

I'm willing to bet, that InBev is still making some profit on that $15 case of beer. I might be wrong, but I doubt it.

By comparison, a bottle of Havana Club 7-year old rum, distilled in Havana, sold at the Havana airport duty free store - US$8.00 . A bottle of Havana Club 7-year old rum, distilled in Havana, sold at a Toronto-area LCBO, CD$30.50 .

Economically speaking, it makes sense to me that the farther a thing has to travel, the more borders it has to cross, or the more oceans it has to swim to get to the store, it stands to reason that the price of the product should go up.

Yes, there are taxes and minimum prices and all that - but still, it's just Labatt Blue.

Other famous Canadian cash grabs include Costco memberships ("What, I can pay to shop at your store? Please -- sign me up!") and buying ice from the store (this is Canada after all - it's in the backyard 8 months of the year :) ).

2 comments:

Anonymous said...

According to the US government, taxes make up 53% of the price of Canadian beer and 18% of the price of America beer. There still seems to be a gap.

Jim (Progressive Right) said...

I guess it depends on what you define as taxes.

The example that the Toronto Star published has it at under 40% in Ontario, and less in Quebec.