Who sets LTO pricing, and why shelf prices differ

An LTO reduces the wholesale cost of a product to licensed buyers. Every Alberta licensee pays the same wholesale price for a given product, but retail is privatized, so each retailer sets its own shelf price independently. A product on LTO at wholesale is not necessarily discounted in any store.

Does AGLC set the price of liquor in Alberta?

AGLC does not set retail prices. The Alberta government sets liquor markup rates, which AGLC applies and collects on the government's behalf; AGLC adds provincial markup, container deposit, recycling fees, and federal duties and taxes to the supplier's invoice price to arrive at the wholesale price.

Retail pricing sits entirely with the private retailer. The province's role ends at the wholesale price.

Which part of the price does an LTO change?

An LTO is a supplier-side reduction, so it moves the invoice price the wholesale price is built from. Markup, deposit, recycling fees, and duties are applied according to their own schedules regardless of the promotion.

A consequence worth knowing: the reduction reaches the wholesale price in full, but it is a smaller share of it. Because markup, deposit, recycling fees, and duties do not move with the promotion, the percentage off the total wholesale price is smaller than the percentage off the invoice price alone. Confirm the exact treatment for a specific product with Connect Logistics.

Do all Alberta retailers pay the same wholesale price?

Yes. All licensees pay the same published wholesale price for a given liquor product. What differs between retailers is what they choose to stock, when they buy it, and what they charge for it.

Why do two Alberta stores show different prices for the same bottle?

Because retail pricing is an independent decision, and because the two stores may have bought the same product at different times. A retailer that bought deeply during an LTO holds that stock at a lower cost and can price against it after the offer closes.

This is the ordinary mechanism behind price differences between private stores. It is also why buying timing, not just buying volume, affects a store's competitiveness.

Does an LTO oblige a retailer to discount?

No. Passing a wholesale reduction to the shelf is a commercial choice. A retailer may use an LTO to run a promotion, to improve margin at an unchanged shelf price, or to build stock ahead of a scheduled price increase.