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BC Reforms Some Liquor and Wine Laws

The BC Government has announced changes to some of BC\’s liquor laws. The statutory amendments are fairly extensive. The LCLB has a summary in PDF form here. Many of the amendments are housekeeping matters to reflect the reality of various changes to the liquor and wine business that had been informally adopted previously. However, there are also some relatively substantial changes which are for, the most part, good news. For example:

  • Reform of Tied-House Laws. The current Liquor Control and Licensing Act (\”LCLA\”) contains a \”blanket prohibition\” in section 18(1) of \”tied-houses\”. The original intention of these provisions was to prevent vertical control of the liquor market (i.e. to stop manufacturers from owning pubs/restaurants/retailers so that they could favour their own products). The reality of our modern liquor industry is that such control is not a major concern. The tied-house laws ended up causing significant grief for some businesses. For example, a winery could not sell its wine at a hotel/restaurant that was owned by the same family because of the \”tied-house\” restrictions. The amendments remove the blanket prohibition and permit regulations to be issued which will govern any restrictions on \”tied-houses\”. As such, we will have to wait to see the regulations to see exactly how this issue is being fixed … but the statutory amendments are a step in the right direction.
  • Inducements and Co-op Advertising. Similarly, the current LCLA contains prohibitions that prevent licensees from receiving \”money, gifts, reward or remuneration\” for the promotion or sale of liquor. These blanket prohibitions made it difficult to permit retailers and agents/manufacturers from working together to promote the sale of a product. These practices are commonplace in other industries such as the supermarket and grocery business.  The amendments eliminate the blanket prohibitions and make them subject to regulation. Once again, we will have to wait to see the regulations. However, it appears that the intention is to permit some form of co-op advertising.
  • Licensee Resale. The amendments change the law so that \”a prescribed class or category\” of licensee can sell to other licensees. The explanatory PDF indicates that this is to enable rural agency stores to sell to other licensees (e.g. pubs/restaurants) in remote areas.
  • Inter-provincial Border Issues. The PDF states that there will be a new \”process for bringing in small amounts of alcohol into BC from elsewhere in Canada for personal use\”. At the present time, it is generally illegal and/or so expensive to do this that consumers ignore the reporting requirements (if they are even aware of them). I have long advocated that BC take the lead on this issue and establish a workable process for inter-provincial shipping of wine. However, I understand from the LCLB that this initiative is more limited and the new process will only apply to \”small amounts\” of wine brought back personally with a traveller into BC from another province – so it will not address the inter-provincial shipping issue. Rather, it will permit BC residents to bring wine back with them from other provinces if they have been on a trip without breaking the law. It appears that the intent is to exempt such wine from provincial markups. While this is a step in the right direction, it will not solve the problem for BC wineries\’ shipping to other provinces.
  • Independent Wine Stores. The \”old-style\” private wine store license (e.g. Liberty, Marquis, Everything Wine etc …) was based on an agency agreement with the Crown. This category of store is being removed from the legislation … presumably to be moved into a category of license under the regulations (where other retailers such as LRS stores are located).
  • Special Occasion Licenses. There are a number of changes which clarify the process and regulation of special occasion licenses. The new statutory provisions permit \”prescribed\” classes or categories of licensees to also issue special occasion licenses. It is not clear what the extent of this is.

While we will have to see what the new regulations contain, these
reforms generally appear to be good ones and a welcome step in the right
direction for wine law reform.

UPDATE (June 3, 2010): the legislative bill which makes the above changes has now been passed by the BC Legislature and will receive Royal Assent on June 3, 2010. However, many of the more significant changes do not take effect immediately. Rather, they will be introduced by regulation.

Please contact me directly if you have any questions or comments on the above.

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