Month: February 2011

Solicitor General Rich Coleman has added his voice to the calls for reforms to Canada\’s archaic federal law that prohibits the inter-provincial shipment of wine. In an article for the Vancouver Sun published Monday, February 28th, Okanagan Wine Culture Slams Into Prohibition-Era, Coleman describes the law as being \”silly\” and \”difficult to enforce\”. Coleman is right. This federal law is a national embarassment and should have been reformed long ago. Gordon Hamilton has a very smart discussion of the issues in this blog piece which appeared to accompany the article: Prohibition-era wine law called \”silly\” by BC Solicitor General

In a separate article, Coleman also mused about changing BC\’s wacky \”ad valorem\” markup system for wine to a flat tax system: Lobby effort grows for flat tax markup system for wine at restaurants which would also be a good idea if extended to all distribution channels. Is this wine law reform week? By the way, I have it on good authority that \”ad valorem\” is Latin for \”a formula which results in staggering tax burdens for the consumer but which is deliberately designed to be so insanely complicated that most people will not be able to understand its effects\”.

At the Forum for Women Entrepreneurs Dinner held in Vancouver last night, Premier Campbell called for an end to inter-provincial trade barriers that prevent the shipment of BC wine across Canada. As readers know, there is a promising federal initiative underway at the present time to create a national \”personal use exemption\” which would allow Canadians to order limited quantities of wine directly from a winery in another province (see the Free My Grapes website for details). Let\’s hope that BC\’s new Premier, to be elected by Liberals this weekend, will carry through on this.

The BC Liquor Distribution Branch (BCLDB) has circulated an advisory letter to a number of licensee groups indicating that it is considering forcing all licensees (private stores, restaurants, bars, etc …) to use an LDB-branded credit card for all credit purchases at the wholesale level. At the present time, licensees can use any credit card that they wish. This choice enables the licensees to use loyalty cards (such as Aeroplan cards) and accumulate large numbers of points which they can then use for business purposes such as travel or employee bonuses. The BCLDB plan would prevent licensees from doing this and would cause a considerable loss in benefits for the licensees. who are the BCLDB\’s best customers. Many licensees have contacted me on this issue and are extremely upset. The BCLDB\’s stated motivation for the change is to reduce its costs \”associated with wholesale credit card purchases\” … in other words, to make more money. In this respect, it is likely not a coincidence that the BCLDB just missed its revenue targets again and reduced its revenue targets for future years.

Health Canada is adopting new labelling rules that will require the identification of potential allergens in various food products including wine. The new regulations come into effect on August 4, 2012 but manufacturers are being encouraged to adopt compliance earlier. The rules will apply to wine and will require the identification of potential allergens used for fining in wine such as egg, milk or fish products. See this press release for more information: Changes to Enhanced Allergen Labelling Regulations.

However, it is a point of debate as to whether these allergen warnings are necessary. For additional perspective on this issue, you may wish to read this earlier Wine Spectator article which dealt with the same concerns in the U.S.: Wine Producers Struggle With Proposal to Require Allergen Warnings

Apparently, it may no longer be permissible in BC for a wine store owner or employee to conduct any business outside his wine store. The LCLB recently amended the terms and conditions of private wine stores\’ licenses to indicate that all business activities \”related directly or indirectly to the sale of liquor must be conducted inside your wine store\”. The only exception noted is for permitted advertising. It seems that the LCLB is taking a strict interpretation of this \”policy\” because they recently denied a request for a private store to set up an \”order table\” at a wine tasting event.

This policy is problematic because if taken literally, it would prevent a wine store owner from replying to a customer\’s email if he received it at home or away from the store. It would also prevent a store owner or employee from discussing business if he saw a customer in a restaurant or at a social event. At the present time, it is unclear what the objective of this new policy is but it will certainly make it more difficult for the general public to order or even talk about the ordering of wine. It also raises some serious legal issues because \”commercial expression\” has long been recognized as a right that is protected under the Canadian Charter of Rights. I do not see how LCLB \”policy\” can restrict the exercise of a protected Charter right in these circumstances!

Update: Business in Vancouver has now covered this story: LCLB policies outdated in a mobile world.

A BC Supreme Court decision released on Tuesday (Northland Properties vs. BC Liquor Control & Licensing Branch) has found that the LCLB cannot use \”policy\” to restrict its obligations to properly consider discretionary decisions made under the Act and Regs. This case dealt with an application for discretion to waive the distance requirements for the transfer of an LRS to a new location. The Regulations (s.14(6)) state that the General Manager has the discretion to waive the distance requirements without outlining specific criteria for doing so. The court found that the LCLB had improperly created restrictive \”policy\” which limited its review process to a consideration of a few factors and prevented a full and correct consideration of all the relevant factors which might warrant the exercise of that discretion.

This case deals with an important issue because it is a vital principle of law that \”policy\” must always be consistent with the statute and regulations. The statute and regulations are the law: \”policy\” cannot be implemented in a manner which modifies the law or restricts it. In my view, this case also reflects a couple of longstanding problems: 1) there is too much discretion in the Act and Regs which makes it difficult for the LCLB to properly regulate, and 2) the LRS distance requirements are not really workable in any event (as I have said before, why is the government involved in regulating the distance between private businesses?). The issue of law vs. policy will be covered in more detail at the upcoming Wine Law in British Columbia conference on March 29, 2011 (50% discount on tuition for the wine industry!).

This Wall Street Journal reports in this story (A Toast to Your Health) that new USDA dietary guidelines confirm that drinking in moderation is good for you. Of course, this is not news to wine lovers and readers of this site. However, it does have significant public policy ramifications and puts the lie to some of the alarmist claims made recently that government should raise liquor prices or prevent privatization. As the Wall Street Journal article points out, many Americans should actually be drinking a bit more in order to get the health benefits associated with moderate consumption. It\’s not rocket science to figure out that the smart public policy choice is to make sure that restrictions on alcohol specifically target people with problem consumption and not penalize those who drink responsibly and get recognized health benefits from doing so.