Sandra Oldfield (left) lays out the new legal landscape for liquor.
Big changes are coming for BC Liquor Laws; perhaps the biggest changes since prohibition was repealed in 1921.
Attending the fifth annual seminar on Wine & Liquor Law in B.C. brought home the staggering scope of reforms proposed in John Yap's Final Report on the government's impressively participatory Liquor Policy Review.
These are heady days for BC wineries, craft brewers, artisan distillers, event and festival organizers, hotels, restaurants, pubs, bars, arenas and theatres, and even, hopefully, consumers.
Beneficiaries of more open, streamlined regulations include the tourism industry as a key driver of employment in the province, as well as BC's all-important agricultural sector which supplies grapes and many other types of fruit, hops, honey, herbs and the like to BC processors.
The changes may not be positive for all the players in the liquor industry. Private liquor stores may be blind-sided by promised wine kiosks or whatever "separated" outlet format finally gets the green light for selling wine and beer in grocery stores.
Experts at the symposium do note the government will move slowly on the introduction of liquor to grocery stores, saying it will be phased in gradually.
Another big question is the issue of what to do about the distribution monopoly, which is considered inefficient, and the BC liquor stores, many of which are not cost effective. However, this does not seem to be of great concern to a government with more urgent priorities.
Of 73 recommendations adopted by the government, several have the potential to benefit wineries, breweries and distilleries by "streamlining" licensing rules and regulations around sampling and sales, and promoting BC products. The Yap Report concurs with many stakeholders that "the current liquor licensing process around allowing people to sample B.C. liquors is unduly complex and rigid" and "this is a significant marketing challenge for producers, which are small businesses, and a significant impediment to the expansion of the province’s agritourism industry."
Targeting wineries, breweries and distilleries with tasting rooms, Recommendation #27 proposes eliminating the need to apply for a specific endorsement for "low-risk" tasting venues such as picnic areas. In #28, manufacturers are given license to offer liquor not produced on-site, such as beer at a winery.
It could be that Yap was thinking of the convoluted process Tinhorn Creek Vineyards and Summerhill Pyramid Winery endured in order to obtain a Food Primary license when he inserted #29. It makes the sensible recommendation that government work with the Agricultural Land Commission to amend ALR rules "to allow more people in consumption areas and to sell liquor that was not produced on site."
"We wanted to act like a real restaurant, an adult restaurant, and sell beer and spirits at Miradoro," Oldfield says.
As well, Yap wants the government to consult with industry "to review the minimum requirements to obtain a brewery, winery or distillery license"… and how they are regulated by the LDB and LCLB.
Coming out of the dark ages would also mean allowing producers to offer its products for sample and sale at farmer’s markets (#31) and allowing secondary tasting rooms (#32).
Oldfield agreed: "Although it makes no significant impact on sales, we see real value having a booth at farmer’s markets so people equate wine with food." For secondary tasting rooms, she adds, "We would like a secondary tasting room in Oliver but run by someone else," she adds.
Commenting on the growing supply of grapes and wine – he used the word "oversupply" – Miles Prodan, executive director of the BC Wine Institute, says: "Finally, we have the quantities to expand our growth." Oldfield stressed the importance of
rising ecommerce and direct to consumer sales: "We must do everything we can to work with other provinces to create wide open borders for Canadian wine." The next few years should be interesting.
Many of the issues facing the craft brewing and artisan distilling sectors mirror those of the BC wine industry after Free Trade in the 1990s. In #25, Yap recommends the establishment of quality assurance programs (along the lines of VQA) for craft beer and artisan distilled spirits.
Ken Beattie, executive director of the BC Craft Brewers Guild which represents fifty BC-owned and operated breweries and brewpubs, says that the government should actively promote the craft beer industry, pointing to Oregon’s active support as a model. Rather than allowing growlers (refillable jugs) in liquor stores (#68), the industry would prefer "exclusivity for Growler sales and filling stations at the Craft Brewery," to ensure freshness. The Guild would like the government to consider offering tax incentives for beers made with "BC only" ingredients and removal of mark-ups for all craft beers coming directly from the source. Growth in the sector has led to a resurgence in hop farming. It makes perfect sense because "the best place for hop farming is the 49th parallel," he explains.
To get the mark-up advantage, craft distilleries have to use 100% B.C. ingredients. That is a problem, according to industry spokesmen Rick Pipes, distiller and co-owner at Merridale Ciderworks and Artisan Distillery, Peter Hunt, master distiller at Victoria Spirits, and Charles Tremewen, owner of Long Table Distillery. "The definition of a craft spirit should be changed to match other jurisdictions south of the border," says Hunt. Allowing neutral grain spirits combined with a sliding mark-up system would put us on an equal footing," he adds. ■