BC's New Liquor Laws Now Effective

Businesses involved in the wine industry in British Columbia should take note that BC's new Liquor Control & Licensing Act and associated Regulation became effective on January 23, 2017. Links to the new statute and regulation are contained on this page of the LCLB's new web site: Legislation and Regulation. To support the new Act & Regs, the LCLB has also released new Terms & Conditions Guides for licensees. The new guide for wineries is here: Manufacturer's TAC Guide. There are also new guides for other categories of licensee here: TAC Guides

These new laws will be the subject of sessions at the upcoming BC Wine & Liquor Law Conference, to be held in Vancouver on February 14th. Wine industry attendees can obtain a reduced registration fee by changing the rate on the registration page to "wine industry rate". 

U.S. Launches Trade Action Against BC Wine Grocery Model

The United States Trade Representative has announced this morning that the Obama administration has launched a trade enforcement action at the WTO against BC's wine in grocery store model. The details of the challenge are contained in this press release: United States Challenges Canadian Trade Measures That Discriminate Against U.S. Wine. The basis of the action is that BC's "regular shelves" grocery model discriminates against imported wines by allowing the sale of BC wines on regular grocery shelves but only permitting the sale of imported wines in a separate "store within a store" model. We will provide an update on this issue at the upcoming Wine & Liquor Law Conference in Vancouver on February 14th.

BC Wine Law Conference Details (+ Discount)

Details of the 2017 BC Wine & Liquor Law Conference are now available from the organizer's web site: Law Seminars Wine Law Conference. The agenda should be fascinating with sessions on BC's brand new Liquor Control & Licensing Act (taking effect later this month), as well as a review of the new legislation's effect on industry and local government, discussion of wine labeling requirements, an update on interprovincial shipping and the effects of national trends in liquor law reform.

There is a discounted registration fee for those who work in the BC wine or liquor industry. This reduced $300 USD rate is now available by going to the conference registration page, selecting the "Rate" drop down box and changing it from "Regular" to "Wine Industry Member". The registration fee will then change to $300.

End of Year BC Wine Law Update

A quick round-up of end of year wine law issues in BC and Canada:

BC LCLB General Manager Departs. Douglas Scott, the current General Manager of BC's Liquor Licensing and Control Branch, is leaving the Branch in early January to move to a new position within the Government dealing with Aboriginal Relations. Doug led the Branch through a time of many changes including the implementation of nearly all of the recommendations arising from the Liquor Policy Review. His replacement will be Michelle Carr, who is currently with the BC Environmental Assessment Office.

BCWA Plebiscite Changes. Some of the changes approved by the recent BC Wine Authority plebiscite have now been enacted: see "BC changes regulations for wine labelling" and here is a link to the Order in Council that enacts the changes - incidentally, the government is changing the name of the statute that governs BC wine from the rather obtuse "Agri-Food Choice and Quality Act" to the more sensible "Food and Agricultural Products Classification Act" (nice to see wine classified as an agricultural product!).

Federal Marijuana Report - Interprovincial Shipments. The federal government's report on marijuana legalization has now been released including recommendations that cannabis be available from retail storefronts and that the existing mail order system be continued (it is currently legal for medical marijuana to be shipped through the mail and between provinces). In respect of retail sales, the report advocates a separation of cannabis sales from the sale of alcohol and tobacco ... which, if implemented, would prevent sales through existing government or private liquor stores. In addition, if the recommendation to continue with mail order sales is adopted, then the federal government may wish to also address the continued problems with interprovincial wine sales. It would make little sense to allow a new regime for cannabis sales which permits interprovincial shipment but to not resolve the longstanding issues with interprovincial alcohol sales at the same time. It would be relatively easy to do both by establishing permissible amounts for interprovincial shipment of both cannabis and alcohol through a federal level exemption.  

Wine Law Conference 2017. The date for the 2017 BC Wine & Liquor Law Conference is February 14th (Valentine's Day!). The agenda is excellent including a review of BC's new Liquor Control & Licensing Act as well as its accompanying regulations, review of the new legislation's effect on industry and local government, discussion of wine labeling requirements and related issues, provision of an update on cases dealing with interprovincial shipping, and the effects on the industry of national trends in liquor law reform. Full details and registration are here: 2017 BC Wine & Liquor Law Conference.

BC Grocery Wine Update

Here is a policy update regarding the sale of wine in grocery stores in BC.

Possible Licensing

There are currently 4 main potential avenues for enabling the sale of wine in grocery stores in BC: 1) Transfer of VQA Operating Agreement, 2) Purchase of Auction Licence, 3) Transfer of Private Store Licence, and 4) Transfer of Government Store.

In respect of VQA store transfers, these licences are held by the BC Wine Institute. Most of the operating agreements associated with these licences have been purchased by a single grocery chain, the Overwaitea Food Group (Save-On Foods). A number of them are currently open for business. These licences only permit the sale of BC product and can sell wine on the regular shelves. There are no new VQA store licences being issued.

In respect of the Auction licences, the first round of auctions allowed bidding for the "right to apply" for 6 licences. All were purchased by Loblaws with cumulative bids totalling about $7 million. Another round of auctions for an additional 6 licences will be held at the beginning of December. The first of these stores opened this week in South Surrey (a Real Canadian Superstore). Like the VQA licences, these licences only allow the sale of BC product which can be sold on the regular shelves.

In respect of private store licence transfers, it is possible to transfer an existing LRS or IWS licence to a supermarket. This would generally result in a "store within a store" sales model although it is possible with an IWS licence to end up with the "regular shelves" model if the products sold are restricted to BC product. I am not aware of any such transferred licences being open for business at the present time ... although some grocery chains have purchased licences that they may eventually use in this way. No new private store licences are being issued.

In respect of the government store transfer, it is possible for a government liquor store (not technically a licensee) to move to a supermarket using the "store within a store" model. I am not aware of any such transfers being open for business at the present time ... although it is possible that some may be in the works.

Municipal Restrictions

Grocery store alcohol sales are also subject to municipal zoning and bylaw restrictions. Some BC municipalities have restricted the operation of the above licences by either not permitting the sale of alcohol in grocery at all or by making such sales subject to distance separation requirements (similar to the 1 km rule for private and government stores). 

Trade Compliance Issue

As discussed here earlier, many of Canada's international trading partners have complained about the grocery model on the basis that it discriminates against imported wines (i.e. BC wine can be sold on regular shelves but imported product cannot). This issue is ongoing and received additional media coverage this week: California Wine Lobby Group Says U.S. to File Complaint Over BC Liquor Reforms. The progress or resolution of any such complaint may be affected by the recent election of the Trump administration - which appears to be poised to take either an anti-trade stance or a more aggressive position on international trade issues. 

Ontario Grocery Wine Sales. The Ontario government has introduced a complicated system that will allow for an increase in the sale of certain beer and wine on the regular shelves of supermarkets as well as allow for the conversion of existing wine kiosks into "regular shelf" sales licenses.  Basic information on the system is available from the AGCO site here: Beer, Wine & Cider Sales in Grocery Stores. However, this summary (Ontario Announces Bid Process for Wine Licenses) from the trade organization, Drinks Ontario, also provides some very useful links. It should be noted that the Ontario approach also provides preferential treatment to "in-province" producers since many of the new licensees will only be able to sell Ontario product for the first 3 years of their license term and the other rules regarding sales appear to favour Ontario producers.