Why Are Alcohol Prices So High in Canada?

On average, Canadians of legal drinking age consume more than nine standard alcoholic drinks per week. If you’re among those who enjoy a nightly glass or weekend pint, you’ve likely noticed that the cost of alcohol has climbed—whether you buy it in a store, order delivery, or drink at a bar.

Statistics Canada reports that prices for store-bought alcoholic beverages increased 5.9% between March 2022 and March 2023, and overall liquor prices rose a further 2.3% from June 2023 to June 2024. Why are alcohol prices in Canada rising so quickly, and what can you do to keep your cocktail hour affordable? Read on for practical explanations and saving tips.

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What factors affect the price of alcohol?

The price you pay for beer, wine or spirits reflects many inputs beyond the alcohol itself. Raw ingredients—grains, hops, grapes, sugar, botanicals—plus water, packaging (bottles, cans, labels) and energy to run production all make up the cost. Labour, transportation and retailers’ overhead add more. When any of those costs rise, producers and retailers usually pass at least some of that increase on to consumers.

Taxes are another major factor. Federal excise taxes apply to alcohol across the country and vary by product: for example, federal rates translate to a small amount per six-pack of beer, around $0.54 on a standard bottle of wine, and roughly $4.07 on a typical 750‑mL bottle of spirits. Provinces and territories may layer additional taxes or minimum prices onto those federal rates, so the final retail price depends on where you buy.

Government pricing and distribution policies also affect cost. In some provinces, government liquor boards or minimum price regulations determine wholesale or retail pricing. Those rules influence availability and competition, which in turn impact what consumers pay.

Climate change and extreme weather are increasingly important drivers behind alcohol price volatility. Crops used to make beer, wine and spirits—barley, wheat, corn, rice and grapes—are vulnerable to drought, heat waves, early frosts and smoke from wildfires. For example, a severe winter in British Columbia in 2024 damaged grapes in some regions, reducing yields and putting pressure on supply and prices for local wines. As extreme weather events become more common, supply disruptions can make certain beverages scarcer and more expensive.

What about non-alcoholic drinks?

Low- and no-alcohol beers, wines and spirits have surged in popularity, but they are often priced higher than their alcoholic counterparts. That’s partly because production can be more complex: many non-alcoholic beverages are brewed or fermented then processed to remove alcohol, which adds steps, equipment and time. Packaging and distribution costs remain the same, and specialised production often means smaller batch sizes.

One major difference is taxation. Non-alcoholic beers, wines and spirits are typically exempt from alcohol-specific federal taxes, which helps offset some manufacturing costs. Still, depending on the brand and production method—especially for craft or specialty zero-proof products—prices can remain higher than expected.

Where can you find a good deal on alcohol?

Where you find the best price depends on how and where you drink. Alcohol bought at home is generally cheaper than drinking the same beverage in a bar or restaurant, where service and venue overhead are added to the price. When eating out, check the menu for by-the-glass prices and consider that beer often offers a larger serving at a lower price point than wine.

Buying in larger formats can reduce per-unit cost: splitting a bottle among friends or purchasing a multi-pack can be more economical, but do the math—sometimes single servings on special offer can compare favorably. Shopping around can help: some provinces allow more retail competition than others, and seasonal promotions at grocery stores or liquor stores can produce bargains.

Reward and cash-back credit cards aimed at groceries or everyday spending can help you save when you buy alcohol at supermarkets that sell beverages. If you live near provincial borders or close to the U.S., cross-border shopping may offer lower prices on some items—just be mindful of legal import limits and taxes when returning home.

If you’re comfortable with DIY, homebrewing beer or making wine can be a way to reduce costs over time; equipment and ingredient investment can be offset by the savings per litre if you brew regularly. Distilling spirits at home, however, is regulated and typically requires a licence.

More on spending and saving:

• As food and grocery costs rise, Canadians are adapting how they shop for essentials.
• Choosing the right credit card for groceries or everyday spending can increase rewards and deliver cash back.
• Practical money habits and small changes to daily routines can free up cash for the things you enjoy.