- Monday, 07 January 2013 16:15
- Written by Mark Hicken
A new year always brings the promise of change. In BC, perhaps 2013 will finally bring the advent of consumer-focussed reform of our archaic liquor and wine laws. It is now 92 years since BC repealed prohibition ... and we are still stuck with a "government control" mentality for both the regulation and distribution aspects of our wine industry. The current government has made some welcome minor changes in the past year (e.g. the introduction of corkage and the acceptance of interprovincial wine shipments). However, most of the major problems remain (see the FreetheWine and ModernizeWine sites) and, as such, BC remains out of step with the rest of the world. Our outdated approach creates problems for the entire province because it stifles the growth of food/wine culture and inhibits job creation in our increasingly important hospitality and tourism industries.
I am hopeful that liquor law reform will become an election issue this year ... because it is long past time for BC to enter the modern age of liquor regulation. The past year saw increased media attention to liquor law issues. Whether it was arcane festival beer garden restrictions, liquor in movie theatres, interprovincial wine shipments, the shutting down of charity wine auctions or, most recently, the restriction of all age events, BC citizens are getting increasingly annoyed by an outdated approach to liquor regulation which is firmly rooted about 80 years in the past (see Liquor Law Year in Review, Open The Tap, and Liquor Laws Should Treat Us Like Adults). Most North American jurisdictions have modernized their liquor regulatory systems to a much greater degree than BC. Close to home, both Alberta and Washington state now have systems which are essentially modern. Even Ontario is now discussing modernization in the wake of a realization that the LCBO is not the economic golden goose that it pretends to be (see this Globe and Mail commentary: Four Reasons Why Ontario Will Be Better Off Without the LCBO).
In BC, we have an election in May and hopefully, any new government will adopt a more modern approach on the regulatory side. In addition, and with relevance to the distribution side of the equation, the government's fiscal situation continues to deteriorate. The next government will need to look for ways to increase revenue. Currently, the BCLDB provides about $900 million of alcohol revenue annually to the government. However, it costs almost $300 million to run the system. Our wacky and insanely complicated wholesale pricing system means that there is no room for government to increase prices. If any future government wants to wring more revenue from alcohol sales it will have to redesign the system or cut costs or do both.
There are plenty of opportunities for sensible reform of the existing system and I remain cautiously optimistic that the election may become a catalyst for change. British Columbia's wine drinkers deserve a government that promotes food and wine culture and that encourages the growth of economic activity in the hospitality sector. I'll post again later this week with some suggestions for meaningful change.
If you are interested to hear more about this topic, be sure to attend the 2013 Wine and Liquor Law Conference in Vancouver on February 25th. There will be a conference topic dedicated to the discussion of positive reform measures.
- Thursday, 20 December 2012 09:14
- Written by Mark Hicken
Prince Edward Island has acted to free the grapes (at least partly) by quietly amending its Liquor Control Act (s.33) to allow PEI residents to possess up up to 9 litres of wine per person that has been imported from other provinces. PEI's liquor board (PEILCC) says that this only applies to "in person" transport of wine, not direct shipment. PEILCC and I disagree on this point because the law uses the word "import" and, in my view, the use of the word "import" can only be reasonably interpreted to include both "in person" transport and direct to consumer shipments. The language used applies to all wine, not just domestic ... and there is no restriction to winery purchases so retail purchases would also be okay. On the down side, the section is poorly worded because it creates a cumulative personal exemption ... PEI residents are only allowed to possess up to 9 litres of wine that has been imported at any given time (in other words, if you already have 1 case, you will have to drink it before you can order another one) ... a restriction which is both impractical and unenforceable.
For a complete review of provincial law on wine shipment within Canada, see this page: Shipping Laws on Wine within Canada.
- Wednesday, 05 December 2012 15:26
- Written by Mark Hicken
Modernization of Ontario's wine distribution and regulatory system has hit the news today as Ontario PC leader, Tim Hudak, has come out publicly in favour of at least some degree of privatization (see: PC Leader Hudak Urges Sale of Alcohol in Ontario Grocery, Convenience Stores). In addition, many Ontario wine producers are mounting a campaign to allow private wine stores within the province in order to increase their distribution and reach new markets. This campaign also received coverage in today's Globe from Beppi Crosariol: Wine Producers Lobby for Private Stores in Ontario. Beppi's article included a good analysis of the government revenue issue ... which usually pops up as soon as anyone mentions privatization. Those who believe that privatization will reduce government revenue simply do not understand the economics of liquor in Canada. For a primer, see my earlier article Canadian Liquor Economics 101 which explains why privatized or partly privatized systems make more money for government than systems with government retail. But for more recent numbers, see Beppi's article where he reinforces the point by noting that Alberta's privatized system makes more money for government than Ontario's state retail system.
- Wednesday, 21 November 2012 09:16
- Written by Mark Hicken
The Nova Scotia government has followed British Columbia's lead by introducing provincial legislative amendments which will permit direct to consumer wine shipping into that province. The government press release is here: New Amendments Benefit Wine Industry, Consumers. The changes are stated to be similar to British Columbia's in that they only apply to 100% Canadian wine. The press release states that only Manitoba and B.C. already permit direct to consumer shipping. That is a contentious statement: see the FreeMyGrapes site for other views and my earlier post which concludes that BC, Alberta, Manitoba, Ontario (and now Nova Scotia) are open. The link to Nova Scotia's bill is here but note that the details of it will be contained in regulations which have yet to be issued. In addition, I note that Saskatchewan recently made some amendments to its liquor laws which expressly exclude direct to consumer shipping (see s.59 of Alcohol Control Regulation).
- Friday, 26 October 2012 12:36
- Written by Mark Hicken
After a week of uncertainty stemming from an LCLB directive to Victoria's Belfry theatre (see: LCLB Halts Charity Wine Auction, Others in Jeopardy), the BC government has issued a press release indicating that it will permit charities to fundraise by auctioning off liquor. The quick response on this issue is laudable. However, the press release is confusing because, in terms of immediate application, it only refers to permission for the auction of "gift baskets or similar items that have liquor as one of its components". The issue that was raised by the earlier action against the Belfry and the one that is of central importance to charities is whether or not they may auction privately donated bottles of wine. The auction of privately donated wine for charitable fundraising has been going on in BC for years, and for decades in the case of some charities. In respect of this issue, the press release is unclear. Indeed, there is no mention of privately donated wine in the release at all. Unfortunately the release seems to indicate that charities may not auction off bottles of donated wine until new laws are passed: "Charities that wish to fundraise using only liquor, without other items as a primary component of a basket, will have to wait until new legislation is in place.". It is not clear from the press release what the legal distinction is between the auctioning of a 'gift basket containing liquor' and liquor on its own. I have requested that the LCLB provide clarification on what is intended.
Update: The LCLB has now issued a policy directive on this matter (PDF) which, while clearer than the press release, will likely cause a number of problems for the affected charities:
- The LCLB will permit the auction, without a license, of privately donated wine contained in gift baskets so long as the wine contained in the gift basket is not the “primary component” of the basket. If an auction consists of items which are primarily wine or if the event is primarily a wine auction then the event will need to be licensed. This distinction is impractical and appears to have no basis in law.
- Licensed auctions can include wine donated from manufacturers/agents or purchased from the LDB. Privately donated wine is not permitted. This is perplexing because the LCLB has licensed hundreds, if not thousands, of events in the past that auctioned privately donated wine. Frequently, the privately donated wine is the most valuable (and thus most important) part of the auction.
- The policy fails to take into account the unfairness that will be inflicted on charities who have incorporated charity wine auctions into their annual budgets and who have now had their financial stability up-ended by a sudden change in policy. In addition, the new policy will simply force private wine donors to auction their wine out of province causing a loss of charitable dollars and economic activity within B.C.
- The government is promising to introduce new legislation to permit the auction of privately donated wine in the future but as the legislature is not sitting, it is not clear when this might be accomplished.