Reopening Orders Posted for BC - Effective Tuesday May 19th

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Written by Mark Hicken Mark Hicken

Category: Latest News Latest News

Published: 16 May 2020 16 May 2020

The BC Provincial Health Officer has posted a new health order that permits the reopening of restaurants, certain liquor primaries and manufacturer tasting rooms, all effective Tuesday May 19th, with restrictions on operations and capacity. Note that most bars/nightclubs that do not offer meal service must remain closed.

In addition, an order posted yesterday requires that all BC employers (i.e. all businesses with staff) also must create and post (including on your web site) a COVID19 workplace safety plan. See the Worksafe BC site for details on this.

The original order contained some differences between the restrictions applicable to different categories but that order has now been revised to create consistency. For the most part, the significant restrictions contained in the reopening order now include:

• Must create 2 metre separation between patrons who are not in the same party.
• Maximum 6 customers per table.
• Maximum 50% of usual capacity.
• No events at establishment that include more than 50 people (I read this as per event, not as an overall capacity maximum).
• If practical, maintain contact info of patrons for contact tracing purposes.

Please read the order for full details. There is no expiry date on the order and it is not effective until May 19th so reopening cannot occur until then.

Article Updated May 21st to reflect revised and reissued health order.

New Subject Areas Added to BC Winery Compliance Subscription

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Written by Mark Hicken Mark Hicken

Category: Latest News Latest News

Published: 12 May 2020 12 May 2020

We are pleased to announce that our InterProvincial Winery Compliance subscription (available through our sister web site, Alca Intelligence) has been expanded and now includes additional subject areas in addition to InterProvincial Shipping Compliance. As a result, we have renamed the subscription as the "BC Winery Compliance Subscription". 

The subscription now provides access to information in multiple categories. More are planned in due course. The subject areas now include: 

InterProvincial Shipping Compliance (3 separate articles - this is the original subject area)

Agricultural Land Commission Compliance (1 article - including an explanation of the problematic new 5% development rule)

BC Winery Compliance (3 articles - including explanations of the rules related to contract manufacturing and the differences between commercial and land-based wineries)

As before, the subscription is an annual service which provides immediate access to all information on the web site plus 12 months of email notifications related to any significant changes in the covered subject areas. Sign up for the BC Winery Compliance Subscription here.

Finally, additional information related to COVID19 is also available on the Alca web site (free access for these resources).

 

Updated COVID19 Analysis for the Wine Sector

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Written by Mark Hicken Mark Hicken

Category: Latest News Latest News

Published: 08 April 2020 08 April 2020

The following articles have now been posted to our sister website, Alca Intelligence. They provide updated and more detailed analysis and thoughts on the possible consequences for the wine sector from the COVID19 pandemic. The articles include many references to other media sources that I have found to be authoritative and useful. I hope that these articles will be helpful for wine industry businesses in formulating ideas and planning for the months ahead.

• COVID19: Predictions and Analysis - Is an updated and more detailed version of an article originally posted on WineLaw.ca. Now provides more specific information on the potential length and type of ongoing restrictions and how they may affect the industry.
• COVID19: Restrictions Affecting the BC Wine Industry - Provides a listing of and links to the relevant provincial orders and policy changes that are currently affecting the wine industry in British Columbia.
• COVID19 Statistics: Comparisons to Other Jurisdictions - Ongoing and updated statistics on how the various West Coast wine jurisdictions are doing in the battle against the pandemic including comparisons to other places worldwide.

All of these articles are part of our sister website which normally provides subscription-based compliance information for the wine industry (relating to interprovincial shipping, licensing, marketing and the Agricultural Land Commission). However, all COVID19-related articles are accessible free of charge (no subscription needed). 

How Does This End? And What Are the Likely Consequences?

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Written by Mark Hicken Mark Hicken

Category: Latest News Latest News

Published: 26 March 2020 26 March 2020

This is a follow-up to my earlier post. As noted there, these predictions are obviously speculative.

Current Restrictions

As discussed previously, the current societal restrictions (lock-downs, business closures, social distancing, event size limits) have produced dramatic effects for the wine industry:

• A collapse in sales to restaurants/bars/hotels, which entire sector is bearing the full brunt of the fight against the pandemic.
• An increase in sales to the retail sector due to consumers switching to wine consumption at home.
• An increase in online (direct to consumer) sales due to consumer preferences for product delivered to homes.
• The closure of winery tasting rooms, although many on-site stores are still operating for online sales and "curb-side" pickup.
• The closure of restaurants located at wineries. 
• The cancellation of traditional promotional events such as winemaker dinners and larger tasting events, both in respect of trade and consumer events.
• The cancellation of on-site winery events including consumer-focused ones (such as wine club release parties) and social events (such as weddings).

The Future of the Restrictions

The strategy of most governments is to control the number of infections (and hospitalizations) through the use of the restrictions such that the medical care system is not overwhelmed (i.e. 'flattening the curve'). As noted previously, in China it took 3 months of very significant restrictions to 'turn things around' (or 'flatten the curve' sufficiently to ease the restrictions). The longer term goal would be a gradual easing of the restrictions in North America, including BC. However, scientists are warning that the relaxation of restrictions too quickly, could cause a 'second wave' of infections and problems creating a recurring cycle of problems and re-imposed restrictions. As such, and barring a miracle cure/vaccine or a radical change in government policy, it appears that the most likely outcome is a continuance of some level of restrictions for at least 2-3 months, with a possible gradual easing over a longer number of months (Bill Gates has predicted a shutdown of 6-10 weeks). What are the implications of this for the wine sector?

• Restrictions on hospitality businesses might continue for many months albeit perhaps with some easing. As a result, sales to this sector may continue to be negatively affected.
• Sales to the retail sector would likely stay strong, although the surge may level off somewhat.
• Online DTC sales would likely stay strong.
• Winery tasting rooms may not be able to re-open or may have delayed openings. The traditional tasting room model may not be allowed ... rather, they might be restricted to appointments or other models that could incorporate limits on the number of customers present at any one time. Winery 'tour bus' models may not be possible.
• Winery restaurants may not be able to re-open, or could be subject to restrictions.
• Traditional promotional events may not be possible or may be restricted to smaller numbers.
• On-site winery events may not be possible or may be restricted to smaller numbers.

A second, potentially more optimistic scenario, is that mass testing and increased protection of vulnerable groups (following a successful effort to 'flatten the curve') results in better and more targeted management of any ongoing cases and outbreaks. This strategy seems to have worked in some other countries, such as South Korea and Singapore, which have not had to impose such significant broad societal restrictions. Nevertheless, these countries have relied on monitoring and compliance programs which are more intrusive than anything seen to date in North America (e.g. GPS or technology based location reporting to enforce self-isolation or quarantine). This approach could conceivably allow for a faster relaxation of the restrictions - and a faster return to 'normality'.

Your Sales Channel Mix

Wineries may need to review their past sales channel mix and actively re-calibrate it. If a high percentage of sales was to the hospitality sector (including an on-site restaurant), you may need to find other channels for most of this wine. Similarly, if a high percentage of sales came from "walk-in" tasting room traffic, you may need to re-think. This is of obvious concern if the restrictions continue into the summer tasting-room 'high season'.

Planning Ahead

Here are a few ideas:

• Treat your existing customer lists as the "holy grail" (you were doing this before, right?). You may be able to increase sales to your loyal clientele through promotions and/or effective direct marketing. For example, one winery that I visited recently sent me both a hand-written thank you note and a corkscrew in the mail a few weeks after I visited.
• If you don't have a wine club, think about starting one.
• Upgrade your DTC capabilities. If necessary, re-vamp your web site and online sales processes. If you haven't added free shipping, do so now.
• Create a 'Plan B' for your tasting room. If it can re-open, could you do 'appointment only'? Could you make it work with restricted numbers?
• Create a 'Plan B' if you have a restaurant. If it can re-open, could you do 'take-out only'? Could you do 'picnic packs'?
• Think about what alternate marketing you would do if dinners and tasting events do not resume. Can you work with your existing retailers? Can you ramp up online marketing? Think about wine clubs. Think about joint marketing initiatives.
• Think about re-scheduling winery events. Adopt a flexible cancellation policy.
• Cross your fingers ... and hope that things get under control sooner rather than later.