WineLaw.ca

Ontario\’s lack of support for interprovincial wine shipping has hit the news recently due to Premier Kathleen Wynne\’s apparent adoption of an LCBO scripted anti-consumer position regarding interprovincial wine shipping. I have posted an analysis here on my companion site, LiquorPolicy.com. In addition, the Premier\’s stance has been roundly criticized by multiple news media reports including the following: Provinces Stomp on Consumers Ability to Buy Canadian Wine (Vancouver Sun op/ed); Ontario Won\’t Loosen Up Wine Importing Laws (Globe and Mail); Inaction on Ontario Wine (Toronto Sun); Who Wants to Limit Your Choice of Wine (National Post) and Open Borders for Wine Urged (Winnipeg Free Press). Hopefully, Premier Wynne will take note of the waves of protest and adopt a pro-consumer position sooner rather than later. After all, Ontario wine consumers are also voters … and it looks like the next election in Ontario will be a close one.

Yesterday, BC\’s Premier, Christy Clark, handily won the by-election in the riding of Westside Kelowna making her the first BC Premier in decades to represent a wine industry riding. Westside Kelowna is home to many wineries including some of BC\’s most successful ones. Indeed, the previous MLA (who stepped down for Clark) was Ben Stewart whose family owns Quails Gate winery which is located in the riding. The election win is a good sign for the BC wine industry because wine industry issues will now be at the heart of the Premier\’s constituency. Indeed, it may well be that Clark is now the province\’s first real \”Wine Industry Premier\”. The last BC Premier to hail from the Okanagan was Bill Bennett but his reign as provincial leader ended prior to the tremendous growth and expansion of the Okanagan wine industry which occurred following the inception of NAFTA in 1989. Premier Clark has already announced an overhaul of BC liquor laws (see New BC Govt Commits to Liquor Law Review) which is being led by Suzanne Anton, the new Minister of Justice, and John Yap, Parliamentary Secretary for Liquor Policy Reform. In addition, the government has appointed Herb LeRoy as BC\’s Honorary Wine Envoy tasked with rallying support for interprovincial wine shipping.

June 28th is the one year anniversary of the unanimous passage of Bill C-311, which removed Canada\’s federal ban on the interprovincial shipment of wine direct to consumers (see: Canadian Wine Shipping Reform Becomes Law). The amendments created a national personal use exemption for DTC shipments subject to applicable provincial laws. I have updated my Shipping Laws Within Canada page to provide an up-to-date summary of my views regarding the legality of shipping wine to consumers in the the various provinces across Canada. Manitoba gets the gold medal for opening its borders completely. BC gets a silver medal for opening its borders partially. Unfortunately, none of the other provinces have publicly declared their support for \”freeing the grapes\”. Instead, most are dragging their heels on reform in various ways with, in my opinion, various degrees of legal effectiveness. The award for worst behaviour has to go to Alberta … which is stating that it is not open for DTC shipments despite the fact that its own provincial laws clearly state that it is legal (see: Alberta\’s Bizarre Position on Wine Shipping Law Reform). There\’s a good summary of the situation from the Winnipeg Free Press here: Manitoba Wine Laws Ahead of the Curve. The fight goes on … please support FreeMyGrapes as it continues to press the provincial governments for the simple right to buy wine from other places within your own country. 

Today\’s BC cabinet announcements by Premier Clark included commitments to modernize BC\’s \”antiquated liquor laws\” on a broad scale and with industry consultation. Suzanne Anton is the new Attorney General and Minister of Justice. Her listed responsibilities include the Liquor Distribution Branch, Liquor Licensing Branch and, in the government backgrounder, include \”Begin consultations to modernize BC\’s liquor laws\”. In addition, John Yap has been appointed Parliamentary Secretary to the Minister of Justice and Attorney General with his listed responsibility being labelled as \”for Liquor Policy Reform\”. It is indicated that he will \”Lead the stakeholder consultation on modernizing B.C.’s antiquated liquor laws and recommend improvements to the minister to take to Cabinet\”.

BC\’s Premier Christy Clark announced yesterday that the MLA for Kelowna Westside, Ben Stewart (whose family owns Quails Gate Winery), has stepped aside to allow the Premier to run in his riding. The by-election will be called shortly and will likely be held in early to mid-July. This decision bodes well for the BC wine industry because the Premier will then represent a wine industry riding in the Okanagan … and wine industry issues will be at the heart of her constituency. In related news, CBC Kelowna is reporting this morning that Ben Stewart has said that he will now also lobby the Premier to modernize BC\’s liquor laws. 

I have decided to move liquor policy discussions to a new web site, LiquorPolicy.com, so that this site can stay focussed on legal issues related to the wine industry. The inaugural post at the new site discusses the 38% increase in government revenue that Washington state received following the privatization of its spirits distribution business: WA – Big Win on Privatization is State Revenue.

BC\’s election is now past us and the fourth consecutive BC Liberal majority government is poised to take office. Hopefully, a renewed and refreshed government will continue its efforts to modernize BC\’s liquor laws which gathered some steam in the past year. There is plenty of opportunity for positive reform:

Licensing. A number of good changes were made on the licensing side in the past year (including corkage, catering, movie theatres, tied house amongst others – see LCLB site and earlier articles posted here). However, there is still plenty of updating that could be done for additional improvement. Indeed, a full scale review has not been done for about 20 years and is long overdue (even the NDP promised this in their election platform). The current general manager of the LCLB is retiring at the end of June. As a result, there is an opportunity for the new government to signal that it is committed to further modernization when it appoints the new general manager. I\’m hopeful that the new appointee will have plenty of familiarity and experience with the hospitality industry which is directly affected by liquor policy issues and will also have legal/regulatory experience beyond law enforcement. It seems to me that it is time for the LCLB to move beyond its post-prohibition regulatory model and move into the modern world. Let\’s hope that the new government agrees.

Wholesale Distribution. The \”Distribution of Liquor Project\” (which would have changed the wholesale distribution system for liquor within BC) was cancelled a while back. However, the government has indicated that it needs a new liquor distribution warehouse and may sell off the old one. Nevertheless, even within the existing system, there are ample opportunities to create efficiency and to make economically positive improvements. Let\’s hope the new government takes a good look at the existing decades old system and commits itself to modernization that will provide service benefits to the entire hospitality and tourism sector.

Licensees and Consumers. There are many problems with the current system which affect the various categories of licensees (e.g. retailers, restaurants, hotels, bars, wineries) in different ways. Many of these problems also end up having adverse effects on consumers particularly through reduced selection, higher end prices and a lack of competition. These problems could also be resolved by a consultative process aimed at overall modernization.

It seems to me that the continuation of liquor law modernization would be a positive populist move for our new government. The liquor modernization initiatives in the past year were, for the most part, welcomed warmly by both the industry and the public. Further modernization would certainly provide lasting economic and employment benefits for the entire tourism and hospitality sector. 

Some interesting stories in the news this past week related to liquor and wine laws:

Liquor Law Reform in Canada. Two Canadian provinces announced substantial liquor law reforms and modernization this week. Manitoba introduced a suite of liquor law reforms: see Province Removing Red Tape in Alcohol Sales and the Government Press Release. Saskatchewan has also brought into effect a number of wide ranging reforms announced earlier: see New Rules for Liquor Sales in Saskatchewan and the Press Release, as well as previously announcing that all new liquor stores in the province will be private ones.  

Privatization. The privatization debate continues to rage south of the border in Pennsylvania, which is one of the last U.S. states to have a \”Canadian style\” liquor control system. The State Governor is trying to pass a privatization bill which is currently under review by the State Senate. Here are a couple of interesting articles: The CDC Goes to War Against Wine (in which Forbes magazine challenges \”academic\” findings that state control systems produce less public harm from alcohol than private ones) and Facts Contradict Claims of Liquor Monopoly Supporters.

Social Media. The U.S. Alcohol Tobacco Tax & Trade Bureau (TTB) which partly regulates the wine industry at the federal level has issued guidelines for wineries who are using social media: see Feds Put New Rules on Wineries Using Social Media and the TTB Bulletin.  

Finally, of course, BC\’s election on Tuesday produced the fourth consecutive BC Liberal majority government (to the surprise of many pollsters and pundits). Hopefully, the minister responsible for liquor, Rich Coleman (or whoever is appointed as the new minister), will continue with the past year\’s progress on liquor law modernization for the province. As noted earlier, BC\’s Liquor Distribution Branch already has a new general manager, Blain Lawson, and the Licensing Branch will also gain a new general manager shortly following the retirement at the end of June of current manager, Karen Ayers.

BC goes to the polls this coming Tuesday, May 14th. There is a good summary of the various parties\’ platforms as they relate to the hospitality and liquor industry (assembled by the BC Restaurant & Foodservices Association) here: Restaurant News Special Edition BC Election 2013 (PDF). You can read through the answers contained there and judge for yourself which party may be more likely to reform BC\’s liquor laws. In addition, as of Tuesday, the BC Conservatives announced that they would permit beer and wine sales in supermarkets and corner stores should they win the election (which, of course, is very unlikely given their poll numbers). Regardless of the election outcome, it appears that there may be a possibility of some reforms under a new administration. Both branches of government which deal with liquor will have new top bureaucrats after the election: Blain Lawson was recently appointed as the new general manager of the Liquor Distribution Branch and, on Tuesday, the general manager of the Licensing Branch, Karen Ayers, announced that she would retire as of the end of June. I\’m keeping my fingers crossed that the new government will realize that a sweeping modernization of BC\’s liquor laws is needed and that the current post-prohibition era regulatory regime should be replaced with a more contemporary approach (see this article by Peter Mitham for good background on our system: Shaped by Legislation – A History of Wine in BC).    

The General Manager of BC\’s Liquor Control & Licensing Branch has announced that she is leaving the LCLB at the end of June to retire. Karen Ayers has been the General Manager of the LCLB since 2006. She has been involved in many liquor regulatory issues that have been reported here including charity wine auctions, corkage, liquor in movie theatres, under age shows, special occasion licensing and the liquor privatization project.