BC Budget: No News is Good News

As expected by many, the BC Budget for 2009 which was delivered yesterday did not contain any measures with immediately apparent impact on the wine industry. This was somewhat predictable since BC wine prices are now so high at retail that there really is no room for the government to try and extract additional revenue unless they reform the distribution system (more on that later). The one lingering issue is the implementation of the HST scheduled for next July. The combined HST rate on wine will be 12% which is actually 3% lower than the existing combined rates of 10% PST and 5% GST. As a result, there would be an actual reduction on the tax rates applicable to wine if the government does not act to increase retail prices by other means (such as increasing other fees or liquor board markups). The reduction in taxes is extremely small when compared to the usurious rates of liquor board markup (117%) and other fees. However, it will be interesting to see how the government handles the difference. Tax policy must be applied fairly and consistently as between imported and domestic wine. However, liquor board markup is currently not applied fairly so there is an interesting problem on the horizon. Maybe the government will just give consumers a break and let them have a 3% cut? Just wishful thinking.

Wine Law Conference November 2009

I am co-chairing a conference (with Chris Wilson of Bull Housser & Tupper) on "Winery and Wine Distribution Law." which is set for November 12 and 13 here in Vancouver. We have a great lineup of speakers from both the wine industry and the legal side. Plus we have a wine tasting scheduled for the Thursday evening with the incomparable team of Sid Cross and David Scholefield. The full program brochure is here.

There's a 50% discount on your registration fees if you are part of the winery business ... just register online but choose the student/new job option to get the discount (the winery discount is set out in the "Tuition" part of the program brochure).

Alberta Liquor Board (AGLC) Threatens BC Wineries

The Alberta liquor board (AGLC) has written to several BC wineries threatening them with criminal enforcement action if they continue shipping wine to Alberta. The letter states that shipping wine directly to individual customers in Alberta is illegal under both the federal Importation of Intoxicating Liquors Act ("IILA") and the provincial Gaming and Liquor Act and Regulation. The AGLC claims that all liquor shipped into Alberta must be consigned and shipped to the AGLC. The AGLC action raises countless issues, some practical and political, as well as a number of legal issues.

John Schreiner covers the issues from the wineries perspective here.

The various legal issues (including a workaround for shipping and possible solutions) are discussed in this article on wine shipping law in Canada which I have updated to deal with the AGLC's actions.

Wine Taxes & Pricing Article in the Advocate

I wrote the wine column in this month's edition of the Advocate (which is the magazine distributed to all lawyers in BC). Here's a link to a PDF of the column which discusses public policy relating to pricing and taxation of wine in British Columbia's retail distribution system. I have also thrown in some wine recommendations which reflect my take on wines available in BC which are actually good deals in terms of global pricing and quality.

Time to Reform Tied House Laws?

Good article in today's Times-Colonist on the need to reform B.C. liquor laws, specifically the "tied house" restrictions which impose strict limits on business when a person owns both an interest in a liquor manufacturer (such as a winery or brewery) and a retail establishment (such as a restaurant, bar or store). These antiquated laws (which date from post-prohibition times) prevent the owner of Lighthouse Brewing in Victoria from selling his own beer in his own bar, the Podium Sports Grill. They also prevent the Bishop family from selling their own wine (made at Carbrea winery on Hornby Island) at their restaurant at Seabreeze Lodge.

As the article points out, the original purpose of these laws was to prevent vertical control of the liquor industry such that major players would not limit choice at the retail level. However, times have changed ... and there are certainly better ways to address these concerns, even if they are still valid.

Similar laws were the subject of intense criticism in Washington state, which recently reformed them so as to solve issues like the ones noted above. British Columbia could also reform its laws ... it just takes the political will to do so.