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BC Govt Permits Corkage for Wine in Restaurants PDF Print E-mail
Written by Mark Hicken   
Friday, 20 July 2012 20:12
The BC Government has announced that it is modernizing BC's wine laws to permit corkage. This is great news for wine lovers in the province as it will now be legal to take a bottle of wine to a restaurant to enjoy with a meal. For more information, see Corkage Comes to BC.
 
Liberal Saves Wine Shipping Law Reform From NDP Delays PDF Print E-mail
Written by Mark Hicken   
Wednesday, 30 May 2012 16:42

Yesterday, there was a historic opportunity for the House of Commons to vote on and pass Bill C-311 which would amend the 80 year old law that prohibits the inter-provincial shipment of alcohol so as to allow the shipment of wine in certain circumstances (a personal use exemption). The passage of this Bill would provide great benefits to Canada's thriving wine industry and to Canadian wine consumers who have long suffered under a prohibition era rule which makes it illegal for them to order wine from another place within their own country. The Bill was thought to have all party support and the wine industry was excited that finally it would be rid of an archaic law which has no place in modern society. Unfortunately, the historic opportunity to fix this was delayed yesterday when a number of federal NDP MPs from British Columbia (Alex Atamenenko, Fin Donnelly, Kennedy Stewart and Jinny Sims) created a fillibuster and used up all of the time allotted for the Bill, thus preventing the vote (see story: BC wineries shackled by NDP MPs). Since the House will break for summer recess shortly, any further progress in the Bill could have been delayed until at least the Fall. However, Nova Scotia Liberal MP, Scott Brison, has now stepped in to save the day by providing more time for Bill C-311 next week. The Bill may now pass next week and head to the Senate. Huge thanks to Scott Brison for this.

This Bill has the support of both the BC Liberal Government (see: Politicians Rally Around Wine Bill) and the BC provincial NDP opposition. The Bill is simply a common sense non-partisan solution. Yesterday was not the time for the federal NDP to play partisan politics with BC wineries and BC wine consumers. Thankfully, the Liberals exhibited more common sense. Readers may wish to join #BCWineChat on Twitter tonight at 8 pm for more information. If you wish to express your displeasure at the NDP: the Free My Grapes site makes it easy to contact federal MPs - particularly federal NDP leader, Thomas Mulcair.

Last Updated ( Wednesday, 30 May 2012 20:25 )
 
BC Falls Behind Neighbours on Wine Law Reform PDF Print E-mail
Written by Mark Hicken   
Wednesday, 07 December 2011 01:25

Four weeks ago, citizens in British Columbia’s neighbour, Washington State, voted to get their state government out of the liquor business (see: Initiative 1183 passes, ending state's experiment in alcoholic socialism). The voters directed that the state end its 78 year monopoly on liquor sales and shift its resources to enforcing the state’s liquor, health and public safety laws. BC’s government would be wise to look south and consider what Washington is doing and how they are doing it. The end result in Washington will be that consumers will pay less for liquor, more jobs will be created in the private sector, enforcement of liquor laws will increase and, perhaps most importantly, the state will make more money from the sale of liquor than it did under the monopoly.

BC is currently a monopoly province for liquor sales and it has been for 90 years following the repeal of prohibition when a “government control” system was created. The provincial government still maintains almost complete control over the liquor business by doing the following:

  • Controls 100% of the wholesale liquor business through the BC Liquor Distribution Branch (LDB), which employs about 10% of direct government employees and costs $300 million per year to run.
  • Controls prices at the wholesale level by imposing fixed LDB fees, LDB markups and taxes on all liquor products.
  • Following an aborted attempt to privatize about 10 years ago, the province now severely limits competition through price fixing at the retail level. It does so by preventing the negotiation of wholesale prices for liquor to licensees such as private retail liquor stores, restaurants and bars. Instead it sets minimal discounts (e.g. 0% for restaurants and 16% for private licensee retail stores) off the full retail price that is fixed in government liquor stores.
  • Further limits competition in the retail space by refusing to issue any new private store licenses and by imposing anti-competitive rules, such as distance separation requirements, onto the existing ones.
  • Operates a slow and inefficient distribution system under which it typically takes 2 weeks to deliver a product from a warehouse in Richmond to a licensee in Vancouver.
  • Imposes extremely high LDB fees, LDB markups and taxes upon anyone bringing liquor into BC from outside the province.

These factors contribute to the fact that BC’s liquor taxation and regulatory system is one of the most archaic and outdated in the world. As a result, BC consumers are faced with extremely high retail prices, the hospitality and tourism sectors are stifled by uncompetitive business practices, and job creation and economic activity are restricted.  Alberta modernized and privatized its system in 1993. Washington has been modernizing its system over the past few decades and, with the recent vote, will complete its modernization and privatization in 2012.

Washington state’s approach is instructive because its reform measures complete the transition from a post-prohibition “government control” structure and remove the conflict of interest that is inherent in a system where government both sells liquor and is also supposed to regulate it in the public interest. Instead, Washington will move to a modern regime where the state can focus on regulation. Specifically, Washington’s reforms will do the following:

  • Eliminate the state monopoly on liquor distribution and remove government from the wholesale liquor business (resulting in a onetime cash infusion to the state from the sale of its distribution warehouses).
  • Establish a licensing and fee structure for liquor sales through the private sector that will generate about 50% more money for the state than the existing state liquor stores generate, while maintaining or reducing prices for consumers (Alberta intended to maintain its liquor revenues when it privatized but, in fact, saw revenues increase).
  • Sell off existing government liquor stores (which will also result in a onetime cash infusion to the state).
  • Restore competition to the retail market by removing wholesale price controls and permitting volume discounts for retailers purchasing wine and spirits.
  • Enhancing liquor safety enforcement and limiting licenses to responsible vendors.

BC could easily learn from the privatization experiences in both of its neighbours and create a liquor regulation and taxation regime that is one of the best in the world. Both Washington and Alberta have proven that the removal of government from the liquor business will reduce consumer prices, increase selection, create jobs and economic activity, and increase government revenue. It’s time for BC to join the modern world of liquor regulation, just like our neighbours have done!

This chart illustrates some of the major differences between BC and its neighbours in respect of liquor regulation.

Last Updated ( Wednesday, 07 December 2011 01:57 )
 
Bill Presented to Amend Wine Shipping Restrictions PDF Print E-mail
Written by Mark Hicken   
Thursday, 29 September 2011 22:15
Good news for those consumers who wish to order wine from other provinces. Dan Albas, the MP for Okanagan-Coquihalla, has introduced a private members' bill which, if passed, will amend the Importation of Intoxicating Liquors Act (IILA). The IILA is the 1928 post-prohibition federal law that prevents wineries from shipping directly to their customers in another province. The private members' bill is entitled "An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use)". Here is a complete analysis of the Bill and its proposed reforms: Reform Process for Wine Shipping Law Begins.
Last Updated ( Wednesday, 05 October 2011 20:15 )
 
Liquor Boards Give ... and Hold Back PDF Print E-mail
Written by Mark Hicken   
Friday, 16 September 2011 19:28

Here's an update on some small progress on the interprovincial shipping issue which has come in the form of some liquor boards stating that the "in person" importation of wine from other provinces is okay. WineLaw.ca has a Shipping Law Update August 2011 which includes an analysis of responses from some provincial liquor boards on this issue. From a legal perspective, the responses are problematic because some of them appear to ignore the plain meaning of the liquor laws that the boards are supposed to operate under. Please read the Update for the full details but here is a summary:

Alberta. Alberta law states that the "importation" of wine for personal consumption is legal but the AGLC says that you can only import wine if it "accompanies the individual". The law makes no such distinction and the plain meaning of "importation" includes direct to consumer shipments.

Ontario. Ontario law does not deal with the importation of wine from other provinces but the LCBO has created a new "policy" permitting importation of specified amounts "on their person". Since the LCBO has no powers outside Ontario or over interprovincial trade, it is difficult to see how the LCBO can use its "internal policy" to modify a federal law that prohibits the behaviour in question.

PEI. PEI law permits individuals to "import" and keep up to 2 litres of wine from other provinces but the PEILCC says you can only do that if you bring the wine "on your person". Once again, the law makes no such distinction and the plain meaning of "import" includes direct to consumer shipments.

While change is welcome, even in small steps, the troubling aspect of the above is that the liquor boards appear to be interpreting their own laws in a manner which is inconsistent with the plain meaning of the law. Canada's liquor boards are obliged to apply and interpret the laws as they are written. If they don't like the laws, they can ask their respective governments to change them. You and I are not free to interpret liquor laws (or any laws) in ways which we would prefer but which are contrary to their plain meaning.
 
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