While there are scant details in the media report, it appears that FedEx has been charged in Newfoundland for shipping wine from BC to that province. See the story: \”Courier Charged with Bringing Contraband Liquor to NL\”. If the case proceeds, there are a number of obvious defences including a possible constitutional challenge based on the fact that s.121 of the Constitution Act guarantees a free trade zone within Canada for Canadian products.
The Alberta government has moved to reverse the recent progress on direct to consumer wine shipping laws in Canada by quietly amending s.89 of its Gaming and Liquor Regulation so as to create a distinction between wine shipped into Alberta from another province and wine that is personally transported back to Alberta with a traveller after a trip. Prior to the amendments, Alberta law quite clearly stated that Alberta residents could have wine shipped from other provinces in amounts for personal consumption. The Gaming and Liquor Act and Regulation specifically allowed shipment through the combined effect of section 86(3) of the Act and section 89 of the Regulation, both of which read as follows:
Act s.86(3): An adult may import into Alberta liquor of a kind and up to a quantity that is permitted under the regulations.
Regulation s.89: For the purposes of section 86(3) of the [Gaming and Liquor Act], an adult may import from another province liquor for the adult\’s personal use and consumption.
The new version of section 89 of the regulation changes the wording from the earlier version and makes the importation \”subject to the policies of the Board\”. Here is the new section:
89. For the purposes of section 86(3) and (4) of the Act, an adult may import liquor purchased in a province or territory other than Alberta for personal use or consumption in Alberta subject to the policies of the Board respecting the importation of liquor.
The Alberta liquor board (AGLC) has now also issued an information sheet \”Personal Importation of Liquor from Other Provinces\”, which while not explicitly stating that they do not permit shipment, indicates that they only permit liquor to be brought from another province if the liquor \”accompanies the individual\”. It is not clear whether the above changes are legally effective because s.86 of the statute refers only to the \”kind\” and \”quantity\” of imported liquor being set by regulation. It does not empower the Board to make these decisions or to distinguish between types of imported liquor. In addition, there is likely a good argument that such an action would be unconstitutional in any event as it would both violate s.121 of the Constitution Act (which establishes a free trade zone for Canadian produced product as between the provinces) and infringe upon the federal government\’s exclusive jurisdiction over interprovincial trade. As a result, there are now some complicated legal issues as to whether the AGLC can effectively reverse the language in the Act and Regulation through the use of a policy statement. In addition, it is now theoretically easier for Alberta consumers to purchase wine and have it shipped to them from the United States than from British Columbia.
I have updated the Shipping Laws information page to reflect this unfortunate development. In my view, and regrettably, Alberta continues to act against the will of Albertans and other Canadians on this issue (see earlier article: \”Alberta\’s bizarre position on wine shipping law reform\”).
Tinhorn Creek Winery in BC\’s Okanagan Valley has come up with a solution that enables it to ship to 34 U.S. states in compliance with relevant state laws, using a California company, Ship at Home. See the story here: Tinhorn Creek finds way to ship to U.S. customers. Meanwhile, it is almost the second anniversary of Bill C-311, and it remains challenging for BC wineries to ship to Canadian customers because most provincial liquor boards have put up barriers to interprovincial shipping either through legislation or policy statements (see the latest analysis here: Shipping Law Update).
The BC Wine Authority has issued a press release indicating that wineries in the \”Golden Mile\” area of the South Okanagan have submitted the first application to create a sub-appellation (or sub-designated viticultural area) for the Golden Mile Bench area (see story including the release here). The Wine Authority will now proceed with its required process for the application which is set out in the governing legislation. There is currently no time line for approval.
The BC Wine Institute has announced a wide ranging governance review of its operations and structure that will be carried out by an independent third party. The press release is here: BCWI Announces Governance Review. According to the announcement, major changes within the BC wine industry along with the BC government liquor policy review prompted the BCWI to launch its own review. The review will deal with \”focus on all areas of the organization, including, but not limited to: internal governance; board structure; member winery representation; and membership communications strategy\”.
The BCWI has 138 member wineries comprising the vast bulk of production in BC (there are 235 total in BC). BCWI member wineries include both large manufacturers that produce blended wine as well as small and medium sized wineries that produce only 100% BC product. Recently, the BCWI has had to deal with issues such as inter-provincial shipping and the reforms proposed by the government\’s liquor policy review.
On March 6th, the BC Government released further details of its ongoing reforms to BC liquor laws including more specific information on grocery store liquor sales and a timeline for 15 of the 73 reforms that are being implemented as a result of the liquor policy review. The press release is here: BC Outlines Balanced Plan for Grocery Store Liquor Sales. In addition, amendments were introduced in the legislature that will implement some of the proposed changes: Bill 15, Liquor Control and Licensing Amendment Act 2014.
Highlights of the changes include:
- Two ways to sell liquor in grocery stores: the first is a \”store within a store\” model where alcohol will be sold in a segregated area of the grocery store with its own cashier, and the second is the ability to obtain one of a limited number of new licenses that will permit the sale of BC VQA wines on regular grocery store shelves.
- Work continues on the definition of \”grocery store\”. However, it will not include \”convenience stores\”. In addition, the current moratorium on the issuance of new licenses will be maintained.
- The 1 km distance separation rule for liquor retailers will be maintained (and expanded to include all liquor stores). The 5 km maximum relocation rule for retailers will be eliminated.
- Significantly, the government has also announced that BC\’s wholesale pricing structure for liquor will be revised and that all retailers, both government and private, will pay the same wholesale price for liquor products (apparently, the current intention is that restaurants/hotels/bars will not be included in this policy).
A timeline is set out in the press release for 15 of the liquor policy review changes which indicates that some of the announced changes will be implemented in \”Spring/Summer 2014\” (e.g. farmers\’ market sales, festival sales, happy hour, off-site storage for licensees, intra-transfer of liquor), others will be implemented in \”Fall 2014\” (e.g. education initiatives, serving it right changes, expansion of manufacturer sales to include additional products) and some in \”Winter 2015\” (e.g. grocery store liquor sales). In addition, a complete re-write of the existing licensing statute will be done and a new Act will be introduced in \”spring 2015\”.
The momentum for the reform of liquor laws in BC and at the federal level in Canada continued today with commitments in the BC Government Throne Speech and the federal budget. The BC Throne Speech contained a pledge to implement all of the recommendations in the recent BC Liquor Policy Review Report: see the Modernization section of the throne speech. In addition, the federal budget, also delivered today, repeated an earlier commitment to introduce further amendments at the federal level that would permit the interprovincial shipment of beer and spirits: see \”Removing Barriers to the Interprovincial Movement of Goods\” in the Budget. It should be noted that BC\’s promised reforms are quite extensive while the federal changes are limited. They simply extend earlier amendments (which only applied to wine) to include beer and spirits.
Categories
73 Changes, More to Come?
BC\’s full liquor policy review report has now been released with 73 substantial recommendations for change, most of which will be enthusiastically welcomed by the wine industry. Nevertheless, two substantial areas of reform remain and they are: 1) BC\’s wholesale pricing structure for alcohol, and 2) the LDB wholesale distribution system. Each of these areas poses significant problems for both the wine industry and the hospitality industry as a whole. In depth analysis of the problems in each of these areas can be found in the policy review submissions of both the Modernize Wine Association of BC and the Canadian Restaurant and Foodservices Association. It is hoped that the positive momentum of change invoked by the liquor policy review will continue and that the government will also act sooner rather than later on these important structural issues which affect both industry and wine consumers.
The BC Government released its full Liquor Policy Review Report today and announced that it is supporting all of the 73 recommendations in the report. The report is very wide ranging and includes specific recommendations related to most sectors of the industry, some of which are summarized below. The only exceptions are general recommendations related to distribution and pricing, which presumably may become the subject of future changes. At a press conference for the release, the responsible Minister indicated that the government will move as quickly as it can to implement the changes but that some reforms will obviously take longer than others.
Previously announced changes that will benefit wineries include: increased promotion of BC wine products, simplifying licensing requirements for low risk activities such as picnic areas at wineries, streamlining licensing processes for wineries, allowing the sampling and sale of wine at farmers\’ markets, making it easier for consumers to purchase wine at tasting events (including temporary on-site private and government stores), and allowing secondary tasting rooms for wineries.
Previously announced changes for restaurants and bars include: allowing happy hour specials subject to minimum pricing guidelines, allowing minors into pubs with their families subject to guidelines, removal of requirements to order food in restaurants when ordering a drink, flexibility in operating an establishment so as to allow conversion from food-primary to liquor-primary at a certain hour.
Major changes announced today include: an appeal process for the decisions of the LCLB, the demise of fenced off beer gardens, an overhaul of the special occasion licensing system, simpler licensing for stadiums and theatres, the removal of restrictions on sampling of alcohol, allowing off-site storage for private licensees, allowing growler service in retail stores, and site-wide licensing for hotels (e.g. take a drink from one part of the hotel up to your room).
Those interested in a full analysis of these policy changes including potential business opportunities and challenges may wish to attend the 2014 Wine and Liquor Law Conference in Vancouver on February 24th which is dedicated to a sector by sector discussion of the reforms. Those employed in the wine and liquor industry are eligible for a discounted tuition rate of $300 for registration at the conference.
Two upcoming seminars will provide important information to the wine industry in both Western and Eastern Canada.
The 5th annual Wine and Liquor Law in BC conference will be held on February 24th in Vancouver at the Metropolitan Hotel. This day-long conference focuses on the recommendations issued by the BC Government\’s Liquor Policy Review. It will provide a sector-by-sector analysis of the proposed changes including regulatory reform, effects on current stakeholders and emerging business opportunities. Check out the great line-up of speakers here including Doug Scott (new general manager for the LCLB) and Barry Bieller (director of policy for the LCLB). A special discounted conference fee of $300 applies to those working in the wine or liquor industry. Register Here.
The second event is the MNP Direct to Consumer Workshop which will be held on February 18th in Niagara-on-the-Lake at the White Oaks Resort. This half-day workshop will provide essential information to Ontario wineries who wish to take advantage of new markets in other provinces that have opened up following changes in interprovincial shipping laws. Speakers will include Dan Paszkowski from the CVA, myself (Mark Hicken) and MNP\’s Geoff McIntyre and Kal Ruprai. The workshop is free to industry attendees. Register Here.