The State of California has introduced tougher enforcement measures in reaction to three-years of problems involving the sale of alcoholic beverages through Groupon-type promotions and other third-party internet marketing services.
Sales transactions, including advertising, pricing, delivering wine and receiving payment, now must be limited to licensees. But California’s Department of Beverage has also allowed third party providers (like Groupon) to receive “reasonable compensation” as long as they do not engage “in activities for which a license is required”, such as decisions concerning the selection of alcoholic beverages to advertise the offer of sale, the pricing of the beverages, and the completion of the sale.
The regulations are interesting, particularly for B.C. where recent legal changes thanks to the passage of the wine shipping law reform bill (C-311) could soon open the door to much greater use of online marketing.
Unlike B.C., California does not operate government controlled distribution or retail channels. On the other hand, both jurisdictions have homegrown wine industries with wineries that rely on the internet to support their sales and marketing efforts.
But could Third Party Providers provide a service to the industry – wineries and licensees as well as wine agents and potentially consumers – within B.C.’s existing legal framework, given the California saga?
Kevin Blucke believes so. A wine industry professional based in Kelowna, Blucke spearheaded the development of onlineorderdesk.com, a web-based application which allows licensees to place orders with wineries. Even B.C.’s Liquor Control and Licensing Branch found no fault in the arrangement and provided written assurances to that effect back in 2007.
Company Director of Operations, Sean Rogers, explained how the system works, and the benefits for the industry.
“All licensees are wired into the system,” he says. “But only wineries pay a transaction-based fee of $1 per order plus 10 cents a litre over a certain number of cases.”
When a licensee (including private liquor stores and restaurants) places an order, the winery gets an online alert and a copy of the purchase order by email.
Clicking the screen signals the system to convert the order into a Form 60 invoice, copies of which are sent to the licensee and to the winery to facilitate warehouse control and the BCLDB (B.C. Liquor Distribution Branch) reporting at the end of the month.
This process provides wineries with a system of management reports for total sales in dollars and litres, plus sales for everything from product or brand to customer and region.
“Wineries can even tell which products are more or less profitable,” explains Rogers. “The system is even hooked into ContainerWorld in the Lower Mainland.”
Licensed agents also save cumbersome paperwork and receive intelligence in the form of a monthly spreadsheet, as well as a copy of Form 60 invoices, when they utilize the system. Plans include eventually adding a portal for consumers.
“The fact that this is a true cloud-based application which guarantees that it is up and running 100 per cent of the time and the users don’t have to worry about software storing back-up,” he adds. ■