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Buying Wine
One of the positive aspects of BC wine law reform is the introduction of liquor sales and marketing at Farmers’ Markets. As partial fulfilment of recommendation #31 regarding sales of BC wine, craft beer and spirits at temporary off-site retail locations such as farmers’ markets, it is a tangible step in the right direction for liquor law and policy reform.
Not surprisingly, the biggest beneficiaries of law reform – touted as a wide-ranging process to resolve a huge backlog of problems and bottlenecks with respect to BC liquor law and policy – are producers and consumers of BC’s finest.
Stakeholders have been given a mixed bag of regulatory offerings aimed primarily at cutting red tape. These include such tidbits as:
- allowing minors in pubs until 10 pm
- permitting minimum-pricing happy hours
- giving the green light to mixed spirit drinks at arenas and stadiums
- allowing patrons to order liquor without food and carry a drink between adjoining licensed establishments
- permitting wineries (and winery restaurants) to serve liquor such as beer they did not produce
- removing fencing barriers for family-friendly festivals and
- off-site storage of liquor.
The promise to allow the sale of wine in grocery stores became reality on April 1 when the first BC VQA store opened at the Save-On-Foods South Point supermarket in Surrey, which is the 20th of 21 active BCWI VQA licenses.
A 2nd Overwaitea Food Store, Urban Fare Shangri-La in downtown Vancouver - is awaiting approval from city hall to open a BC VQA section.
The South Point location boasts a spectacular 500 BC VQA wine labels on designated shelves, in a specific aisle or aisles, “the largest selection of BC wines in one place”, according to the BC Wine Institute. Half of the products are sourced from smaller producers with limited production not offered at BC Liquor Stores. Amazingly – in BC at least – shoppers can pick up BC wines along with other grocery items, hopefully but not necessarily also BC made, and pay for everything at the same cash – as long as purchased at tills that have a Serving It Right certified, 19+ cashier. “If not, it is flagged for manager override”, says BCWI president and CEO, Miles Prodan. The wide selection is a bonus, as supermarkets (in jurisdictions where it is allowed) are known best for carrying low cost, high volume wines and other liquors. That and the fact that the BC VQA wines are sold under a third-party operator arrangement with the BC Wine Institute make this a completely unique model, one which shoppers might get to like and want to have closer to home. But whether shoppers in far-flung regions of the province or other urban areas also benefit or it simply becomes a curiosity of BC’s peculiar wine marketing framework is still to be determined. Unless the existing BC VQA stores decide to relocate in supermarkets, where consumer traffic is highest, the number of these stores appears to be limited by the number of available licenses, by limited growth potential for producers of 100% BC wines, and by the reaction of US and other international trade partners which could see it as a violation of Free Trade agreements.
The other model for supermarkets of a “store within a store” could be history before it even gets out of the starting gate. It is a weird business model in which these supermarket outlets must stock only 100% BC wine, whether or not VQA designated, and require separate cashiers. To relocate in a supermarket, existing independent wine stores must give up their non-BC product lines and make public health and safety paramount by providing separate cashiers, not exactly the ultimate in convenience. Under this version of booze in supermarkets, shoppers could conceivably, but not necessarily, have the option of purchasing other BC liquors such as fruit wines, ciders, meads, craft beers and spirits, which are not available at VQA stores.
Retail, Wholesale Pricing and Distribution
Also on April 1, changes to retail and wholesale pricing and distribution went into effect for all liquor retailers in the province. Government’s stated intentions – designing changes that do not raise government revenues or retail prices, while leveling the playing field for retailers of all persuasions - appear just a tad fanciful given what the government has actually put into effect so far. While implementing a single wholesale price for all retailers with normal upward wholesale pricing replacing backwards discounts and changing to tax excluded retail pricing like other products and stores are reasonable aims, how it is done is what really counts. All of this is of concern to local wineries as many strive to market their 100% BC wines through independent wine stores, BC liquor stores and restaurants. To the extent that they would prefer an efficient government distribution system, a healthy tourism sector and thriving wine culture in this province, actions speak louder than words.
New margins for independent wine stores are so low at about 15% that they cannot operate successfully without raising prices to uncompetitive levels for all but the cheapest, highest volume wines. Using the same margins, government stores operate without the requirement to make a profit and will not likely recover all of their costs. Raising prices for them is inevitable just to recover costs. The requirement for both government and private retailers to purchase liquor from the wholesale branch of the Liquor Distribution Branch is - for all intents and purposes – a conflict of interest. It is difficult to see how this scenario amounts to a level playing field.
Perpetuating the requirement for restaurants to purchase wine only from government liquor stores and pay full retail price for wine and other liquors puts the hospitality sector at a competitive disadvantage. Apart from the added challenges to hospitality businesses, it is a turn off to clients of restaurants, locals who like to dine out and enjoy wine with food. It also makes us appear bush league to many tourists and it puts a damper on sales of fine BC wine.
And who is not in favour of a healthy wine culture – responsible appreciation of fine wines and foods of the world – as the basis for a healthy, competitive, world class wine industry in BC?
