Friday, November 29, 2013

Recommendations for Booze in Grocery Stores Miss the Mark

In a week where the BC Liberals got hammered for allowing BC Hydro to raise rates 28% over the next five years and for letting BC Ferries executives keep their ridiculous bonuses while cutting ferry services to isolated, ferry-dependant, coastal towns, Parliamentary Secretary John Yap announced that he has recommended to the Attorney General and Justice Minister, Suzanne Anton, that liquor policies should be changed to allow alcohol to be sold in supermarkets.


But before you start dreaming of skipping down the aisles of your local Safeway, plucking bread off the self with you right hand and your favourite craft beer off the other shelf with your left, read the official new release here and realize that this recommendation is not quite what it appears to be and, when you get right down to it, is quite disappointing.

After looking at this, my previously posted "cautious optimism" has been dampened as it looks like instead of being brave, bold, and truly going for it, Yap is going to play it safe with his recommendations.

It is one of those announcements that looks brilliant when you read the headline, but when you actually get to the details as to what is happening you realize the government is just attempting to pull one over on the public, like when the Liberals announced, "Ferry Executives Have Bonuses Cut," when in fact what really happened was that the bonuses were just rolled into the executives' wage packages and had not been cut at all.

In fact, if Anton follows Yap's recommendation, it will achieve, at best, little more than just switching the physical location of private retail liquor stores (LRS), making it more convenient for some and less for others, depending on their shopping needs and, at worst, will have little impact at all as the hassle, cost and logistics of putting alcohol in retail grocery stores will not be worth it for most.

Let's start by looking at the recommendation and play out what this whole thing will look like assuming it gets past the Attorney General.

Yes, Yap is recommending that alcohol be sold in grocery stores, but the news release states that, "in doing this, B.C. should maintain the current cap on the total number of retail outlets in the province."

Say what?

So Superstore may be allowed to soon sell booze, but only if they can manage to buy up an existing liquor retail license, a license with an already-inflated value, which will increased ten-fold in price because those who have them know that there soon will be people with very deep pockets who want them. 

It also means that convenience of getting your beer with your groceries may be at the cost of you being able to go into your small, uncrowded, private retail liquor store (LRS) when you only want to buy a six pack and don't want groceries because that LRS may no longer exist due to having sold their license for stupid amounts of money to a large retail grocery chain. 

What Yap has heard is that consumers want to have the convenience of being able to buy booze with their groceries. I am sure not many of those same consumers he heard from said, "but please take away some of the LRS locations so that I am forced to go into a crowded grocery store even when I don't want to." 

Yap has put the lid on liquor retail outlets to keep those who think more liquor retail outlets will lead to decreased public safety and increased public harm off the backs of the Liberals. 

And even if someone is willing to sell their valuable LRS license to a grocery store, there are current restrictions in place as to how that license can be transferred, those restrictions, which were announced just last February, being, "(LRS) licensees can continue to apply to relocate their store anywhere within the same municipality or up to 5 kilometres away provided the proposed site is more than one km from an existing LRS or LRS relocation application already in progress."

Think about small, isolated towns, like say, Powell River, where I live, where there are less than a handful of LRS locations, one being within a kilometre of all the grocery stores in town. If one of those grocery stores wants to sell alcohol, they have to buy that one LRS license, which is close by, or forget about it because they would be violating the above mentioned policy. This distance between LRS locations will come into play frequently, both in rural and urban settings, and really limit which grocery stores can get involved in the sale of alcohol and which cannot unless Yap is recommending to change that policy as well, which very well might be the case.

And even if the grocery outlet manages to find an LRS license to buy, and has a location to which it can be legally moved to, they then have to look at building a "store within a store" in order to segregate the booze in order to keep it away from minors and those who find alcohol offensive or too much of a temptation. I am not sure just how separate from groceries Yap feels the alcohol needs to be, but if you go by the track record of the Liquor Control and Licensing Branch (LCLB) and the Liquor Distribution Branch (LDB), stores will have to build a full-on bank vault to ensure little Johnny doesn't get his hands on the booze, even though we have laws in place requiring two pieces of ID be shown if the customer appears under 25 years of age.

You have to be 18 to buy cigarettes, yet all you have to do is ask the cashier to get you some, show ID and off you go. For alcohol, you need complete separation for some reason.

So add the price of store renovation on top of buying a LRS license to the tally for the grocery store.

Next consider that the price of the booze is still going to be highly regulated and profit margins dictated by the LDB who basically set the price structure for alcohol in BC. Alcohol cannot be used as a lost leader to get folks in the store, like in many places in the US, because minimum prices will be set and the stores have to stay competitive with existing LRS locations and government liquor stores (GLS), therefore keep their prices in line with other LRS-GLS outlets, so profits may be marginal.

Add to the cost of being able to sell booze in grocery stores the added hassle of having the LCLB and their often overzealous liquor inspectors lurking about, not to mention the undercover, under-aged, 18-going-on-36 folks the LCLB send into LRSs to try to entrap them to sell booze to minors, which brings about massive fines.

This idea sounds less and less attractive if you are a grocery store owner, doesn't it?

Don't get me wrong, I am all for alcohol to be sold in grocery stores. In fact, I am all for the more Quebec style where beer and wine can be bought in corner stores, which is truly convenient. I feel downcast and disheartened by the restrictions and cautiousness of these proposed recommendations. It sounds to me like Yap really did not hear what the consumers wanted and if he did, was too afraid of criticism from those opposed to really make meaningful recommendations for change.

Lets hope I am wrong, this all works out and the rest of the 69 recommendations he has passed on to Anton are truly inspired, bold and actually will bring about some modernization to our liquor policies.

Next post...a look at the alarmist arguments against this idea.

Thursday, November 28, 2013

My Guesses Re Liquor Law Changes - Part II

A few days ago I wrote a post about some of the "quick win" changes I thought we would see come out of the BC liquor policy review and now I want to look at some of the bigger, more complicated and controversial changes I think will occur down the road.

It seems I am a day late in posting though as Mr Yap has stolen the thunder and announced that he has recommended that booze be sold in BC supermarkets, due to overwhelming public support for the idea. Mainstream media, blogs and and social media are all onto Yap's lone reveal in regards to the 70 recommendations he put in his report to to Attorney General and Justice Minister Suzanne Anton.

It became very apparent to me and others who met with Yap and who followed the #bcliquor review process that the sale of alcohol in BC supermarkets, once thought to be an impossibility, was definitely one the table and being considered. But Yap's announcement does not guarantee anything as the idea has to be approved by Anton and the rest of the Liberal brain trust.

Personally, I think it will happen, but we will only see alcohol sold in larger retail chains, with them having to build a store within a store, to ensure limited access to minors and to segregate the booze from shoppers who may struggle with addictions issues and from those who find the presence of alcohol troubling. As well, the store will have to secure a liquor retail license, which looks like it will be no easy task as Yap has recommended not to increase the number of licenses above what now exists.

I also think you will see the government keep a stranglehold on minimum pricing for booze so that these large retail chains do not sell alcohol at rock bottom prices. It will take the government until 2015 to roll this out, working out the bugs with few trial runs, but I honestly think you will see at least some version of booze in supermarkets, Costco outlets, Walmart,  etc., by the end of 2015.

I also do not think as many outlets will not even bother looking into selling booze as it is going to be a major hassle and expense to build a segregated area for booze, deal with the LDB, put up with liquor inspectors and all the other joys that come with selling booze in this province.

And, of course, they are going to have to obtain a license to sell booze and, as I mentioned, this will not be an easy proposition.

I am going to write another post in the next day or to talk about the whole concept of booze in supermarkets and address some of the ridiculous ideas being floated by those against the idea, like the Alliance of Beverage Licensees (ABLE), health authorities and temperance movements.

Another change I think will be implemented, but that will take a long time to come into play is one that simplifies the liquor license system. I think the government will move towards a one-license system, but will start the move by making changes that will allow food primary licensees apply for endorsements to their existing licenses that would allow them to operate as a liquor primary after a certain hour in the evening and that will allow liquor primary licensees apply for endorsements that will allow them to have minors in their establishments, in the company of responsible, sober adults, up to a certain point in the day.

In the end, I think the Liberals will work towards a license to simply sell booze and the licensee will decide what type of establishment and clientele they want. The restrictions will be listed on the license, an example possibly being "mixed ages until 6 PM, +19 only after", so as to put all licensees on a level playing field. I think you will also see the silly restrictions on dancing in restaurants, music in restaurants, etc., removed.

The lines are so blurred right now as to who is a bar and who is a restaurant. Think about it. The law allows me to take my 3-year-old daughter into a restaurant with dozens of beer taps, a large selection of wines, spirits and hundreds of seats, even when it is packed and happening at 8 PM, yet the law forbids me to take her into a quiet, mellow neighbourhood pub on a Sunday afternoon to enjoy a brunch.

Another major change I think we will see is the process for getting a listing in government liquor stores (GLS) modified to help support small, local manufacturers and to better give BC consumers access to locally produced beers, wines and spirits.

Many local breweries, smaller wineries and artisan distilleries cannot sell via GLS outlets because they do not meet the outdated production thresholds that are in place to get a listing. The current model is based on large production manufacturers, you need to produce enough of a product to supply 40 GLS locations, virtually making it impossible for small, local breweries, wineries and distilleries to sell via the BC Liquor Stores. Some GLS outlets are forced to break the law to put their local products on their shelves.  I think they are going to give the local GLS management more freedom to stock what they want to stock, as opposed to what they are told they can sell by LDB head office, giving the consumers what they want, as opposed to allowing some bureaucrat with little-to-no-knowledge of some products decide what the consumers want.

To compliment this, I think the LDB will be directed to create special areas to highlight BC products, beyond the current BC wine sections, and put more emphasis on promoting BC products. I think local manufacturers will also be able to deliver directly to GLS locations.

Lastly, I think you will see the LCLB and their liquor inspectors be stripped of some of their current powers. The LCLB and their enforcement folks have long been the law, END of STORY. Liquor inspectors now have huge discretionary powers to interpret the often ambiguous and poorly worded liquor policies as they see fit and to enforce as they see fit. There is no current appeal process if a liquor inspector nails a licensee with an infraction and only through an expensive judicial review can a licensee defend themselves.

Because the liquor inspectors operate without fear of being held accountable for their often bizarre and random rulings, there is a fear amongst licensees in regards to getting on the wrong side of the LCLB and their inspectors. I think you will see an independent review board set up that will be relatively inexpensive to access and which will deal with licensee appeals to decisions made by inspectors. Yap seemed very interested in the subject of curtailing LCLB powers and increasing training and knowledge among liquor inspectors to help rid the province of this culture of fear among business owners selling booze in regards to their often random and arbitrary liquor inspectors who can currently shut them down with no recourse by the licensee.

These ideas are not based in fact, just my thoughts and they are just a drop in the bucket compared to what may be in Yap's recommendations. As I mentioned, there have been 70 recommendations put forward and no one but Yap, his team and the office of the Justice Minister and Attorney General know exactly what they are. I hope they make the report public soon so we can have some real debate and discussion about what may happen in the next few years in regards to liquor policies in this province.

Tuesday, November 26, 2013

My Guesses as to What Will Come out of the Liquor Review

Yesterday, Parliamentary Secretary and Liberal MLA, John Yap, handed over his report to Attorney General and Justice Minister Suzanne Anton with his recommendations for modernizing BC liquor policies based on information collected via the massive consultation with BC citizens and stakeholders in the BC alcohol world.

I have been asked by many folks what changes will come from the whole process and I have to be honest in saying that I really have no freaking clue what Anton will implement on behalf of the BC Liberals.

Yes, I was apart of a group that met with John Yap and his crew and I have been on more than a few radio programs talking about the move to sensibly modernize BC liquor policies, but other than making educated guesses based on reactions during CAMRA's conversation with Yap, reading Yap's blog posts and the submissions of others to his committee found on the review website, I have no more official information than the next person.

For what it is worth, here is what I think may happen.

First off, I am getting the impression that BIG changes are coming and the Liberals are seeing this as their chance to be THE government to make one of the most important marks on culture and society in BC history by modernizing the way we perceive and deal with alcohol in this province. Suzanne Anton and her crew know they have the attention of a very wide cross section of the BC citizenry, from big business folks to Joe Sixpack, and I don't think much is off the table at this point as far as what the government is considering. The government will proceed with caution, with some of the more controversial changes being considered, as they cannot give the impression they are disregarding negative health impacts and the possible risks to public safety attached to liberalizing liquor policy, but I really do believe they will go further with changes than the average person believes.

I believe, as do many others, that the changes will not all come at once. There are some "quick wins", a term John Yap is avoiding like the plague, that will not be that hard to implement and which already have a proven track record of popularity and success in other jurisdictions. Down the road, we will see a second wave of changes, those dealing with the more sensitive and controversial ideas being considered.

Here are a few changes I think you will see implemented in the next year.

Happy hours, or discretionary pricing, as CAMRA BC framed it, is, in my mind, a slam dunk. It will take little to bring this popular concept back and as of right now, BC is the only province that continues to  prohibit licensees from being able to change the prices of their alcoholic beverages during the course of a day. The way it works now, a licensee must set the drink price each day and stick with that price from opening to closing. I think you will see controls and limits set as to how low the drink specials will be allowed to go and as to what hours "happy hours" are allowed be held, so as to cut down on the binge drinking concerns those against the concept have, but I honestly believe that we will see the return of this consumer favourite which also benefits the businesses, drawing customers into their establishments during traditionally quite times.

Farmers Markets allowing the sale of alcohol I think will be another change that will be phased in sooner than later. I do think you will see the government make the changes necessary to allow for local craft breweries, wineries and possibly artisan distilleries to provide limited amounts of samples to consumers at farmers markets and sales of packaged products for consumers to take away to be consumed elsewhere. The idea is a popular one, one that fits with the farmers market concept of direct sales from the manufacturer-producer to consumer and this has been very popular in jurisdictions like Nova Scotia and Oregon to name a few places. I do not think you will see actual on-site consumption areas, like beer gardens, at the markets, at least not at first, but I can see this being a part of a long-range master plan. And because the wine industry is behind this concept 100%, the government will immediately give it a second look, especially now that our beloved Premier is the MLA for a riding smack-dab in the middle of wine country.

Liberalization of the rules around serving alcohol at festivals and special events, is another concept the Liberals seem to be considering, especially as some of the law enforcement folks they spoke to support this idea.

It appears the government is considering making changes that will make beer gardens and festivals more family friendly. As it works right now, many festivals that may allow minors, have segregated areas, commonly known as beer gardens, where alcohol can be purchased and consumed. These areas, also referred to as "beer ghettos", only allow +19 folks, which means if a family is attending a local festival in their city-town and Mom, Dad or both want to stop to have a drink with lunch they either have to split up, as kids are not allowed in the alcohol consumption areas, or they just simply decide forgo the pleasure.  By allowing minors into these areas, responsible parents can enjoy an alcoholic drink, in the company of their kids, just like they can in a restaurant, bowling ally, wedding, family reunion event, etc. It is also thought that by making the atmosphere more family oriented, the frat party, beer garden, atmosphere will lessen and rowdiness will decrease, as beer swilling twentysomethings get the evil eye from old man dads like myself.

The other concept out there is to do away with the requirement to have a segregated beer garden area and allow festival goers to walk around with their drink in hand to be enjoyed where they want within the confines of the event. This would rid events of those segregated booze ghettos, where everyone consuming a drink is packed into a confined space. It is this effect and the more family-oriented atmosphere that I have heard has law enforcement supporting these changes.

Alcohol in parks and at the beach is another change that may happen on the provincial level but that does not mean local governments will be on board and pass by-laws allowing for the same in their jurisdictions. Much like the battle fought by Vancouver breweries to have local by-laws amended to be allowed to have on-site beer lounges after the province gave the go ahead, I think you will see some communities bulk at allowing adults to enjoy a glass of wine with their picnic meal at the park.

Licensees buying direct from manufacturers and private retail liquor stores (LRS). As it is right now, licensees must go through the government liquor stores (GLS) to buy their stock...well in theory, as many are cheating and going to their local LRS outlet to get speciality products that the government stores don't stock or to fill up shelves on busy nights after the GLS outlets are closed. Restaurants and bars would be free to order cases of wine from small BC wineries or buy a bottle or two of wine or a few bombers of a limited release craft brew from their local LRS without having to go through the restrictive and bureaucratic beast that is the LDB. Breweries are already allowed to deliver, on behalf of the government, as I believe artisan distilleries are as well, directly to licensees, which helps some, but by allowing licensees to buy from LRS's, it frees them from the restrictive GLS hours and sometimes limited inventory and takes to burden off breweries from having to make these deliveries direct to the licensee's location.

There are a host of other changes I believe will occur, but the above are the changes that I think, in the short term, will grab most of the headlines and be most noticeable. In a few days I will lay out some of the changes I think will happen, but which will take some more time to implement due to their complexity and controversial nature, such as booze in supermarkets.