We've always paid excise tax on wine. As you may know, it is a flat tax at the front of the pricing chain of 63ยข per litre, but since it is at the front of the pricing chain, it accumulates as it works its way down to the consumer price.
We already add inflation to our producer costs every year. Then you add the excise tax. If that is indexed to inflation on an annual basis, it is then fed into the liquor board markup, which ranges from 70% in Ontario to 160% in Nova Scotia, which then picks up the 5% GST on top of that, which then picks up the 8% PST beyond that. Then it gets to the consumer level. In the case of wine, that increase in excise will double by the time it hits the consumer. Then you have to think about the fact that we have to retail this at the liquor store, and the liquor store typically rounds off the price to the nearest nickel or the nearest dime. It adds a significant cost, which somebody has to take, either the producer or it is shared with the consumer, or it is given completely to the consumer.
The problem we face is we have a 32% market share in this country. We're not the lowest cost producer in the world. We aren't the biggest wineries in the world, so if we do increase the cost and it's passed on to the consumer, the consumer typically has a line in the sand they will not cross. If it's $9 a bottle and they're not crossing $9 a bottle, they'll find an alternative brand, which may be an imported brand. It's a real concern to us.
It's not the fact that government can increase tax. We've faced increases in excise tax in the past, a 125% increase in excise tax over the past 30 years. It's the fact that it is legislated, and inflation is not the only factor we face. Numerous business factors face the industry, and therefore, it's too rigid.
If the government is going to increase the excise tax, it should be increased in the budget every year, or every other year, whenever, and then allow the opportunity to debate that to make sure it doesn't have a negative impact on the industry, especially at a time when we are trying to adjust to the Canada-EU trade agreement when import tariffs will be eliminated. We're about to renegotiate NAFTA. We still don't have interprovincial access across the country. Our only ability to access the export markets is if we can own our own market at home to a larger extent than we do.
We need help to take advantage of these trade agreements to enter into the export market. Annual indexation of the excise tax will not allow us to invest back into the industry, which means we won't be able to expand our export opportunities or our domestic opportunities.