Thursday, November 20, 2014

bc liquor law changes

more changes were announced yesterday to bc's liquor laws
they're nothing we hadn't already heard was probably coming, but there is an effective date now, confirming that the gov't is keeping with its promise to roll out the changes next spring.
april 1, 2015 is the day.
april fool's day seems an inauspicious day... hopefully it won't prove to be.

click for the full news release, the highlights of which are:
 
  • For consumers, April 1, 2015, will mark the first day that grocery stores are allowed to sell liquor through the store-within-a-store model. As well, that same day, restrictions will be lifted on BC Liquor Stores, allowing them to offer refrigeration and to stay open longer hours, including on Sundays.
  • Starting April 1, 2015, all liquor retailers, including BC Liquor Stores, will purchase their product from the BC Liquor Distribution Branch (BCLDB) at a common, wholesale price. This will do away with the existing complex model that offers retailers various discounts depending on the type of retailer they are.
  • As previously announced, the rules around the relocation of liquor licences (the “five kilometre rule”) will also be lifted on April 1, 2015, to expedite the store-within-a-store option, but ultimately, it will be up to the market to determine how quickly this model is adopted.
  • The one-kilometre rule – the minimum distance between new or relocating private liquor
    stores – will be maintained and expanded to BC Liquor Stores.
  • A new price-based wholesale pricing model for wine and spirits will take effect.
  • A new volume-based wholesale pricing model for beer will take effect, with a graduated mark-up system, allowing small- and medium-sized breweries to grow their product lines and create jobs.
so what does it mean to you?
probably nothing right away.  except for being able to shop in a gov't liquor store on a sunday come april 5th (or not, cuz that's easter weekend).
the rest of what the liberals hath giveth is either going to take longer than the april 1st date to implement, or it isn't going to actually mean you get what they're legislating.
this whole push to 'level the playing field' sounds great, but will it?  and if it does, will it actually benefit consumers (ie you and me)?

examples:

liquor stores within grocery stores:  regardless of whether this idea excites you or not, the likelihood of getting one in vancouver is slim to none.  no new liquor licences are being released, so to sell booze in your grocery store you'll need to buy an existing licence.  until april 1st you can't relocate that licence outside of 5km from its current jurisdiction.  so for all those who have been buying licences in remote areas, they won't be able to relocate them to more populous places until april 1st.  and who knows how long the pencil pushing process of actually moving it will take.  that of course presupposes that your grocery store isn't within 1km of an existing liquor store.  in vancouver rumour has it that only two choices supermarkets are not within 1km of a liquor store.  if you live outside the lower mainland you might be more likely to get booze sales in your grocery store, provided someone thinks it's worth paying through the nose for one of those precious existing licences and relocating it to your 'hood.  but it's not likely that any of these will spring into existence on april 1st.

gov't stores being able to open longer hours and sundays and refrigerate product:  who doesn't want liquor stores, both private and provincial, to be open longer?  no one i know!  but will it cause more people to shift away from private stores to gov't ones if they're open the same hours?  i guess if you live really close to a gov't store and not a private store, sure.  for me though, beer nerd that i am, it's all about the selection and that means it's private stores all the way.  they love beer too, and it shows.  they don't offer me a keith's when i ask about ipas.  as for the refrigeration, will this mean that even fewer craft products are available at provincial stores?  i've heard from some people that their local store that is already allowed to refrigerate product, fills the fridge with macro lagers because 'that's what people want' and relegates their paltry craft beer selection to a shelf in the back of the store.  if there's competition for shelf space as well as fridge space, will craft beer lose out?

same wholesale pricing for all liquor sellers:  this would be great if we were told what that across-the-board wholesale price was going to be.  suzanne anton says the gov't expects to receive the same revenue from liquor sales after april 1st as it does now, which doesn't sound to me like any savings will be experienced by liquor sellers that they can pass along to us.  currently the shelf price at gov't stores is what determines how much the other liquor sellers pay the distribution branch for booze.  the 670 private stores buy at a 16% discount off the shelf price.  the 12 private wine stores get 30% off and the 221 rural agency stores get 12% off.  it sounds like all the liquor sellers will be paying more now for the booze with their discount disappearing.  but shelf price does not equal wholesale price, and who knows what the wholesale price of all that delicious liquor is under the current system and what it will be under the new.  if the tax-payer is subsidizing the provincial stores, then i would assume that regardless of all distributors paying the same wholesale price it will still cost the private stores more overall to bring those products to the public and they won't be able to lower their prices.  but even assuming they do manage to pay less for the product, it will be months before any of those savings could be able to be passed along to us.  current product will have to be sold first, ledgers balanced, inventory performed, yada, yada.  so best case scenario still leaves us a long time away from any price relief at private stores.  more likely, says the pessimist, we'll see provincial stores creep their pricing up to where private stores are now over those first months after april 1st.

frankly i have no idea what the price-based and volume-based wholesale pricing models mean.  i'm hoping someone will tell me allllll about it sometime.  and that they'll tell me it's good news for craft breweries.  but i'm not holding my breath.

so colour me underwhelmed by yesterday's announcements, and by the liberal's approach to liquor law reform all around.


some links:

camra's position
national post story
news 1130 story
cbc story
vancity buzz story #1, #2
ctv story (video)
ctv story (print)
province story #1, #2 and #3




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