Category Archives for BC Liquor Law Reform

Persephone Brewing ordered to move from Agricultural Land Reserve

Craft beer darling, and Sunshine Coast favourite Persephone Brewing Company has been given two years to relocate its facilities off its current premises in British Columbia’s Agricultural Land Reserve (ALR). On December 19th, 2016 the Agricultural Land Commission (South Coast Panel) released the reasons of its decision not to permit Persephone to continue to operate at its 11 acre property located at 1053 Stewart Road in Gibsons, BC. The reasons can be found here.

Although branded as a “farm-based brewery” the Commission found that Persephone’s operations fail to meet the requirements of a “farm use” and was therefore operating in contravention of the Agriculture Land Commission Act and Regulation.

The decision of the Commission pits two consumer groups whose interests are traditionally aligned: craft beer enthusiasts and local produce supporters, against the other creating an unusual and somewhat uncomfortable dynamic.

Persephone Brewing’s operations include a tasting room, outdoor seating area, and a food truck. The property also functions as a farm: hops are grown on the property, as well as some produce. Importantly, and also the source of controversy, the property is located within the ALR.

The ALR was originally set up to preserve British Columbia’s limited agricultural land resource, and operates as a land-use zone in which agriculture is recognized as the primary use.  The ALR comprises just 5% of BC’s total land base and is the area with the greatest agricultural capacity. As a finite and valuable resource, the province has decided to protect this land from gradual erosion by non-farming uses.

Though farming and ranching activities on the ALR are encouraged, some non-agricultural uses are permitted if they are considered compatible with agriculture and have low impacts on the land base, examples include pet kennelling or breeding and equestrian facilities. Recently the operation of a brewery, distillery or meadery was designated as a farm use in the ALR provided “at least 50% of the farm product used to make the beer, spirits or mead produced each year is grown on the farm on which that brewery, distillery or meadery is located.” 

Unlike wineries and cideries, breweries cannot purchase product under contract from another grower to meet the 50% threshold. However, there is no requirement for a brewery to grow product on the parcel of land on which the brewery or distillery is located. To meet the 50% threshold a farm-based brewery can be comprised of several parcels of land owned or operated by the farm business where on one parcel the brewery operates and on another the grains are grown.

The 50% threshold is measured by the quantity of farm product processed calculated on an annual basis. According to the ALR policy, for beer the farm product will be grain and not hops due to the small quantities of hops involved in the beer making process. In the case of beer water is not considered a farm product, and the in case of distilled products neutral grain spirit (imported alcohol) is not a farm product. The 50% threshold will be based on the farm product used to make the alcohol (grains, corn, potatoes, sugar beets, etc.) and not the botanicals or other flavouring used in the final product due to their smaller proportions.

In its reasons the Commission confirmed Persephone has been operating on the property since 2013, which pre-dates the inclusion of breweries as a permitted farm use in the ALR. Prior to the Regulation amendment in 2015 the Commission had consistently told land owners and brewers that breweries were not permitted on the ALR.

Persephone submitted to the Commission that it currently grows hops on the property which are used in the brewing process, but conceded that all the barley used by the brewery is sourced from other locations not associated with the farm.  On that basis the Commission found that Persephone Brewing has historically been, and is currently, operating in contravention of the Agriculture Land Commission Act and Regulation and refused Persephone’s request to continue operating on the ALR. To provide Persephone with a reasonable amount of time to relocate its operations the Commission will defer enforcement of the decision for two years.

The Commission’s decision raises interesting questions: is the current 50% threshold too high? Should the Regulation be amended to permit farm-based breweries to contract for barley from elsewhere in BC? Are breweries a good gateway to get the public interested and engaged in farming? Or are breweries best kept off fertile lands reserved for agriculture?

Apparently Persephone has no intention of leaving the property and intends to seek an appeal of the decision. Alcohol & Advocacy will be monitoring the situation closely.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel

Liquor Law Reform in Canada

In the 1920s, as Prohibition in Canada was on the retreat, the federal government and each of the provincial governments were in agreement that liquor sales and consumption needed to be tightly controlled. To facilitate this agenda each province created a liquor control board that monopolized the wholesale purchasing, pricing, and retailing of alcoholic beverages under a heavily regulated regime.

Though much has changed in the 90-odd years since Prohibition ended in most provinces (with the exception of Prince Edward Island which waited until 1948 to repeal its Prohibition laws) the fundamental principle that it is government’s role to control how and where Canadians purchase alcohol – and at what price, remains largely intact. Alberta, which privatized its liquor distribution system in 1993, remains the notable outlier in the Canadian regulatory landscape.

The arguments for and against the deregulation of liquor licensing regimes across the provinces are varied and complex. From time-to-time significant liquor law reforms are considered in all Canadian provinces. Different governments have responded to public demand for deregulation in a variety of ways. Ralph Klein’s conservative Alberta government privatized liquor retailing in Alberta without any serious legislative debate or discussion. More recently Saskatchewan’s premier Brad Wall campaigned on a promise to implement an expanded private retailing system that would open new stores and privatize existing locations. Ontario and British Columbia have taken a different approach altogether preferring incremental changes driven by the reports of government commissions.

Regardless of which approach provincial governments embrace, at each juncture along the road towards reform they are faced with controversial and competing policy concerns:

  • Can socially responsible retailing be balanced with consumer access and convenience?
  • How can the government keep liquor prices competitive without forgoing needed tax revenue?
  • Should government support the “craft” beer and “local” wine and spirits movement through preferential treatment of those products?
  • How far can laws and policies be relaxed before communities and minors get exposed to the harmful effects of alcohol?

Casual observers of the liquor industry, particularly in British Columbia, are often quick to point to Alberta as a shining example of the benefits of privatizing the retailing, warehousing and distribution of alcohol. At first blush it’s tempting to accept that government’s exit from the control of liquor sales and distribution will necessarily reduce the cost of beverage alcohol, and improve the consumer experience. This has not been Alberta’s experience; liquor prices increased in Alberta after privatization for most products, and prices continue to remain higher than in many publicly operated retailing environments.

Do these concepts interest you?

On November 3-4, 2016 in Halifax, the Schulich School of Law at Dalhousie University and Food Lawyers of Canada are bringing together government officials, academics, lawyers and manufacturers to explore the law’s changing role in regulating food and beverage alcohol. I will be presenting on the history of liquor law and regulation in Canada, and discussing a question important to readers of Alcohol & Advocacy: can meaningful liquor law reform happen in British Columbia through ongoing consultation? Or are legal challenges like those before the courts in Toronto Distillery Co. v. The Liquor Control Board of Ontario and R. v. Comeau necessary to force the regulator’s hand?

Tickets are still available.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Internet Alcohol Sales now Permitted in British Columbia

Every day British Columbians head to the internet to do their shopping, even for perishable goods like groceries and flowers, and they expect to have the products they purchase delivered to their door. Now, (finally) they can do the same for all their beer, wine and spirits needs.

On October 17, 2016 the Liquor Control and Licensing Branch issued Policy Directive No. 16-13 that set out the Branch’s new policy with regard to the online sale and delivery of alcohol in British Columbia. Previously licensed establishments were permitted to “use the internet as part of their advertising and sales strategy” but “virtual liquor stores” were not permitted.  This new policy brings needed clarity to the industry for both retailers and consumers.

The policy statement can be read in full here.

Licensee Retail Stores (private liquor stores) and wine stores may now sell their products online and deliver them to customers.  The online store will be considered an “extension” of the licensee’s brick-and-mortar location so the store’s liquor licence number must appear prominently on the website (just like the licensee’s physical licence must be prominently displayed in the physical store), and deliveries must be made from inventory kept at the store and cannot be filled directly from off-site storage. This latter caveat prevents existing licensees from shifting to an internet-focused retailing strategy where they only maintain a minimal physical storefront and conduct the bulk of their business filling online orders from a warehouse.

Manufacturers who already enjoy on-site sales are also permitted to sell their products online, under the same conditions as retail stores (e.g. products must be delivered to the public from the retail store, not from a registered secondary storage site as may be permitted with licensee-to-licensee sales).

What does this all mean for the beer and wine industry in British Columbia?

Retailers and manufacturers should take note that under the new policy they may share a website with other licensees provided the website clearly sets out which store the products are coming from, and each store manages its own sales. The Branch’s decision to permit licensees to share online retail platforms may create opportunities for licensees with an existing internet sales presence to leverage that expertise and software into new relationships with other manufacturers or retailers.

The online sales and delivery policy also contemplates “unlicensed third parties” hosting websites that serve as portals for websites maintained by licensees. Though it is too soon to tell how the Branch’s Compliance and Enforcement Program will interpret the policy, Alcohol & Advocacy expects the gap in BC’s online market for alcohol, especially beer and wine direct from breweries and wineries, will be quickly filled by existing online retailers and delivery services, or by enterprising app developers.

The new policy is silent on what role government liquor stores will play in the new online retailing atmosphere.

The online marketplace for beer, wine and spirits is now open; if you or your business have questions about seizing this opportunity, or have any other concerns about British Columbia’s liquor laws contact Dan Coles at Owen Bird.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

BC’s Liquor Law Commissions of the 20th Century

“It would be a simple task to draft legislation for the distribution and sale of alcoholic beverages if all our citizens were self-disciplined and moderate users, but such is not the case, and this is amply supported by the incontrovertible knowledge that all civilised countries find it necessary and desirable to enact restrictive and disciplinary laws for its control”- Report of the British Columbia Liquor Inquiry Commission 1952

When John Yap’s Report was presented in 2014 the government declared “we promised British Columbians and the industry that we would modernize B.C.’s liquor laws, and we’ve followed through on that commitment.” The government kept its promise – but it was hardly a new one. Since the turn of the 20th century successive governments have made the same promise to “modernize” liquor laws in British Columbia. Though the promise to voters has remained constant,  Alcohol & Advocacy is pleased to confirm that the outcomes have continued to improve. Accordingly the Yap Report entered the history books alongside an illustrious host of  earlier liquor policy reviews and inquiries, including the Stevens Report (1952), Morrow Report (1970) and Jansen Report (1987).

With all the attention liquor laws and policy are receiving in British Columbia and across Canada these days it’s easy to believe we are living in the golden age of liquor law reform. Though that sentiment is probably true, and the reforms of recent years in BC have been well received, the liquor policy reports of bygone eras blazed the trail legislators today are passing through. When the Stevens Report recommended that the government license restaurants to sell beer and wine by the glass, or the Morrow Report recommended permitting women to serve alcohol – British Columbians at that time probably thought they were living in a radical and progressive era.

The liquor law inquiries of the last century are a treasure trove of commentary, facts and analysis that confirm the frustrations licensees face today are not dissimilar to the ones faced by their predecessors 60 years earlier. Each successive report concludes with the recommendation to government to overhaul, or at the very least reform, the status quo of government licensing and retailing. The history of liquor law reform in this province suggests that in another 20 years British Columbian’s can expect a new report criticizing the Yap Report for not going far enough, and recommending a new program of incremental changes to the way liquor is manufactured and sold in the province.

In the coming weeks and months Alcohol & Advocacy will post a new series of articles that examine the policy concerns and recommendations of earlier reports, comparing and contrasting them with subsequent inquiries and British Columbia’s current regime. Stay tuned.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Her Majesty the Queen v. Gerard Comeau

Over four days in late August, 2015 the harrowing tale of Mr. Comeau’s fateful trip across the J.C. Van Horne Bridge that connects Quebec and New Brunswick, with a trunk full of booze, was played out in a court room in the town of Campbellton, New Brunswick – population 7, 385.

The facts were straightforward, and are now well known: Mr. Comeau, like so many other New Brunswick residents, from time-to-time made the trek to a liquor store just inside the border of Quebec to take advantage of cheaper alcohol prices. What Mr. Comeau did not know was that on his now historic trip across the Restigouche River he was under surveillance by the Campbellton RCMP and their counterparts in Quebec.  To be certain, there was no complaint filed with the RCMP to initiate this investigation. R. v. Comeau was the result of an RCMP generated crime reduction initiative.

Under New Brunswick’s Liquor Control Act, it is unlawful in New Brunswick to have in your possession more than 12 pints of beer purchased outside of New Brunswick. On October 6, 2012 Mr. Comeau had in his trunk 354 bottles or cans of beer and three bottles of hard liquor. He was over the limit.

The police were targeting people who had in excess of five cases of beer in their possession when they crossed the border from Quebec into New Brunswick. The operation involved surveillance by Quebec RCMP of persons from New Brunswick (as identified by their vehicle licence plates) shopping at liquor stores in Quebec. The RCMP would follow the individuals seen to be stocking up on more than five cases of beer, in unmarked cars, onto the bridge heading back to New Brunswick, and would radio ahead to the New Brunswick RCMP and provide them with the licence plate and vehicle description of the suspect. The New Brunswick RCMP would then pull over the identified vehicle on the New Brunswick side of the bridge and search it for “illegal alcohol”. The operation lasted two days. It is not known how many tickets were issued for this type of infraction. Mr. Comeau’s ticket was in the amount of $292.50.

Mr. Comeau’s decision to challenge the ticket, rather than shake his head and pay the fine, was significant. What was probably not known to him at the time, but is now known by even the most casual observer of liquor law and policy in this country, is that the decision of the Honourable Judge Ronald LeBlanc, issued April 29, 2016 will one way or another change the way provinces in Canada tax and restrict the sale and transportation of beverage alcohol.

The reasons for judgment in R. v. Comeau were substantial: 194 paragraphs spread over 86 pages. The decision is a pleasure to read, wading deeply into historical and constitutional issues rarely dealt with by modern Canadian courts; it is easy to lose sight of the fact that at issue was a ticket in the amount of $292.50.

For those readers who don’t have the time, or are not inclined, to parse through Judge LeBlanc’s reasons, Alcohol & Advocacy offers up the top ten facts from R. v. Comeau you need to know:

  1. The issue before the court was whether or not s.134(b) of the New Brunswick Liquor Control Act was an enforceable provincial law, or whether it constituted a “trade barrier” that is contrary to s.121 of the Constitution Act, 1867.
  2. Section 134(b) of the Liquor Control Act provides that (with some exceptions) no person within the province of New Brunswick shall have in their possession liquor not purchased from the New Brunswick Liquor Corporation in excess of one bottle, or in the case of beer 12 pints.
  3. However, s.121 of the Constitution Act, 1867 provides that all articles of growth, produce or manufacture of any of the provinces, shall be admitted free into each of the other provinces.
  4. Mr. Comeau argued that s.134(b) of the Liquor Control Act is an impermissible barrier to free trade between the provinces. The Crown’s position was that s.121 of the Constitution Act, 1867 should be read as only limiting laws that create cross-border tariffs or duties (as opposed to mere restrictions on quantity).
  5. Seem simple? You aren’t wrong. Judge LeBlanc observed that the “simplicity of the issue is rivalled only by the complexity of the factors that the Court must consider in arriving at its conclusion. The very nature of the Canadian federation is at stake.”
  6. The contents of Mr. Comeau’s trunk was as follows:
  • 2 cases of 24 bottles of Sleeman’s Light beer;
  • 2 cases of 24 bottles of Miller Genuine Draft beer;
  • 2 cases of 24 bottles of Molson M beer;
  • 3 cases of 20 bottles of Budweiser Light beer;
  • 3 cases of 20 bottles of Budweiser beer;
  • 3 cases of 30 cans of Coors Light beer;
  • 2 bottles of whiskey, 750 ml per bottle; and
  • 1 bottle of Stinger Premixxx liqueur, 1.4 litre.
  1. The Maritime Beer Accord (a handshake deal made in 1993 between some Maritime premiers) carved out a free trade beer zone between New Brunswick, Nova Scotia and Prince Edward Island. In New Brunswick beer produced in Nova Scotia and Prince Edward Island is treated like beer produced within the province, whereas beer produced in Ontario, Quebec and other provinces is subject to additional warehousing fees.
  2. A British government lawyer named Francis Savage Reilly, born in Dublin, Ireland in 1825 and called to the English bar in 1851 was the drafter of s.121 of (what was then known as) the British North America Act, 1867, later renamed the Constitution Act, 1867 in 1982.
  3. The historical context surrounding the drafting of the British North America Act, 1867 led Judge LeBlanc to the conclusion that the Fathers of Confederation wanted to implement free trade as between the provinces of the newly formed Canada.
  4. Judge LeBlanc, boldly going against established (albeit dated) Supreme Court of Canada precedent, held that earlier decisions on the proper interpretation of s.121 of the Constitution Act, 1867 were wrongly decided and that properly considered, s.134(b) of the Liquor Control Act of New Brunswick constitutes a trade barrier which violates s.121 of the Constitution Act, 1867 and is therefore of no force or effect as against Gerard Comeau. Charge dismissed.

While the forgoing should make you reasonably conversant on the topic for cocktail parties, or the upcoming Vancouver Craft Beer Week, it is an oversimplification of a lengthy and complex judgement.

R. v. Comeau may have been decided in a small town on the other side of the country, but the potential ramifications for liquor law in British Columbia are real. British Columbia, like many provinces, has legislation similar to New Brunswick that restricts the amount of alcohol an individual may possess that was purchased in another province.  British Columbia’s Liquor Possession Regulation currently provides that an individual in British Columbia may possess liquor from another province if it does not exceed 3 litres, in the case of spirits, and 25.6 litres in the case of beer.

It may seem hard to believe, but it was only four years ago that Rich Coleman, the then minister responsible for the British Columbia Liquor Distribution Branch introduced that Regulation. Now it looks as though the government will need to once again revisit its inter-provincial transportation regime if it wishes for British Columbia to remain a truly progressive jurisdiction.

We have not heard the end of the R. v. Comeau. The decision will likely be appealed, and its uncertain at this time how the government of New Brunswick, and the liquor control boards across the country intend to respond to the provincial court judge’s findings. Alcohol & Advocacy will be monitoring the situation closely.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

BC Liquor Law Reform: What will 2016 bring?

Despite grumbling from various quarters, including Alcohol & Advocacy, 2015 was a historic year for liquor law in British Columbia.

A “new” Liquor Control and Licensing Act received royal assent in May, and several new and meaningful policies were implemented by the Liquor Control and Licensing Branch that ushered in real change to the way alcohol is marketed, sold and stored in British Columbia. Moreover, there is now a substantial public awareness and dialogue, largely informed by traditional print media, concerning the way liquor laws affect British Columbians. While far from perfect, the Yap Report made it clear that the BC government is listening to consumers and stakeholders in the liquor industry, and is committed to incremental change. The reforms to BC’s liquor laws over the past two years have enfranchised consumers, creating a growing demand for better and more accessible products at competitive prices.

As 2015 comes to a close, it is worth considering what the industry has to look forward to in 2016. To date only about half of the 73 Yap Report recommendations (each of which received “full support” from the government) have been implemented. In short, there is still a lot of change in store for confused consumers, and fatigued manufacturers and retailers. In the shifting legal landscape that is BC liquor law, change is truly the only constant. Many of the outstanding recommendations require the coming into force of the new Act, which will require the drafting of new Regulations, and corresponding changes to Liquor Control and Licensing Branch policy.

Of the outstanding Yap Report recommendations, below are Alcohol & Advocacy’s
“top ten”. For better or for worse we look forward to seeing how these recommendations and consultations unravel in 2016:

(as numbered in Yap Report)

[6] While labelling liquor bottles and packages is the responsibility of the federal government, B.C. should work with the other provinces and territories to encourage warning labels on liquor products.

[12] Due to the varying size and focus of licensed establishments, consideration should be given to how different types of penalties (e.g., a suspension versus a monetary penalty) may impact a licensee and staff. See Penalty Schedule Consultation Paper.

[13] LCLB should work with police agencies to explore implementing “last drink” programs across B.C. on a more concerted basis. If an impaired person’s last drink was in a licensed establishment, LCLB can investigate and possibly levy penalties for over serving clients

[14] LCLB should have the authority to regulate the home delivery of alcohol and should consider that home delivery service providers require SIR certification.

[15] Applicants and licensees seeking a review of LCLB decisions should have access to a new and separate decision-making body outside the licensing branch. The Ministry of Justice should review current processes and determine how best to provide independent decision-making for those seeking appeal.

[26] Government should discuss establishing a quality assurance program for B.C. craft beer and artisan-distilled spirits (similar to the VQA wine program).

[38] Food- or liquor-primary licences should be available to other types of businesses, allowing a range of new establishments (e.g., spas, cooking schools, and galleries) to offer liquor to their clientèle as an additional service.

[50] Permit hobby brewers and vintners to apply for an SOL to host competition events, allowing home-made beers and wines to be sampled by both judges and the public.

[58] LDB warehousing and distribution systems should be modernized and streamlined. The wholesale ordering processes should be improved with the goal of better and more efficient service to clients

[68] Allow private and public retail liquor stores to sell growlers (refillable bottles) and operate refilling stations.

Happy New Year from Alcohol & Advocacy.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.

Restaurants Canada 2015 Report Card: Has British Columbia Raised the Bar?

Have you ever stopped to consider how strange it is that bars, restaurants and caterers in British Columbia (and most other provinces) pay the same for beverage alcohol as you or I would if we walked into our local government liquor store?

Though bars and restaurants in British Columbia purchase alcohol in quantities that dwarf the purchasing habits of individual consumers, and their ongoing support of local products is integral to the survival and growth of British Columbia’s craft beer and spirits sector, they are denied access to true wholesale pricing, and have no opportunity to buy from outside the Liquor Distribution Branch monopoly. Wholesale pricing for bars and restaurants is not to be confused with wholesale pricing for retail liquor stores – another controversial issue in British Columbia.

Restaurants Canada just released its 2015 Report Card on provincial liquor policies that affect restaurants and bars. British Columbia was awarded a “C+”. You can (and should) read the Report Card in its entirety here.

Restaurants Canada is a nation-wide not for profit association that represents Canada’s dynamic and diverse restaurant and food service industry. Though Restaurants Canada speaks for only one segment of the many stakeholders in BC’s liquor industry, this year’s Report is worthwhile reading for everyone involved in the industry. The liquor industry is not comprised of watertight compartments; the various segments of the industry depend on each other for success, and if the hospitality sector is not receiving the support it needs from Victoria, that is a concern for everyone.

While not a failing grade (Newfoundland and Labrador received the only “F” in this year’s Report), when you consider what BC’s Liquor Control and Licensing Branch is doing for our hospitality sector compared to what other provincial regulators are doing across Canada, it is easy to see that there is still much progress to be made in the way that liquor is purchased and sold in BC.

Alberta for example offers restaurateurs and bar owners access to a true wholesale market. Not only can establishments buy at wholesale prices through the Alberta Gaming and Liquor Commission, but they can also buy at wholesale rates from private retailers where they are free to negotiate prices as well as payment and delivery terms. Even tiny Prince Edward Island offers the industry a comprehensive wholesale discount program on all products, and Nova Scotia gives licensees a 10% discount on wine and spirits. Restaurateurs in British Columbia covet those opportunities, and rightly so.

Operators in the food and beverage sector have good reason to be disappointed by BC’s “C+” grade.  2015 was supposed to be a banner year for the hospitality and tourism business in BC with the unveiling and endorsement of the Yap Report. While there is no doubt that many of the changes to BC’s liquor laws this year have been for the better – the terms of reference for the Yap Report were clear that his recommendations must be revenue neutral, so the introduction of a wholesale pricing regime for bars and restaurants was never going to be in the cards.

Alcohol & Advocacy believes British Columbia can do better. The liquor industry is worth an estimated $2 billion to British Columbia’s economy each year (if you include indirect revenue), and the government recognizes it as one of the leading contributors to tourism. For example more people (800,000) visit British Columbia annually and spend money in the wine industry than came to Vancouver during the 2010 Winter Olympics.

The current Liberal government appears committed to liquor law reform, and has not shied away from recognizing the value of the liquor industry to the province. While there is no indication that a wholesale pricing regime for bars and restaurants will be introduced in British Columbia any time soon, the Yap Report has demonstrated the government’s ability to listen to market demands. Perhaps we’ll see a “wholesale pricing consultation” in 2016?

Restaurants Canada 2015 Report Card

  • Alberta:B+
  • Prince Edward Island: B-
  • British Columbia: C+
  • Nova Scotia: C+
  • Quebec: C+
  • Manitoba: C
  • New Brunswick: C-
  • Ontario: D+
  • Saskatchewan: D+
  • Newfoundland and Labrador: F

 

The Liquor Control and Licensing Branch

Ever wonder how the Liquor Control and Licensing Branch makes policy or decisions?

British Columbia’s Liquor Control and Licensing Branch makes decisions every day that affect the viability of brewers and distillers, as well as the bars, restaurants, and retailers that sell and promote their products. Understanding how and why the Branch, and more specifically the Compliance and Enforcement program, make the decisions that they do is key to successfully navigating British Columbia’s regulatory maze.

The Liquor Control and Licensing Branch and its Compliance and Enforcement program find their respective mandates in the  Liquor Control and Licensing Act. The Act provides for the appointment of a “general manager” who administers the Act and “supervises” all licensed establishments and manufacturers of liquor within the province. The general manager, and his staff, administer the Act in a variety of familiar ways including:

  • Issuing, renewing, transferring or cancelling the various licences provided by the Act and the Regulation;
  •  “Supervising” the conduct and operation of licensed establishments; and
  • Performing the various other administrative tasks defined by the Minster and prescribed in the Act and Regulation.

The Branch has various policies and procedures in place to assist its staff in making consist and accountable decisions. Some of these policies are published. The Branch’s policies are based on a number of “operating assumptions”. Whether or not you agree with the Branch’s assumptions, being familiar with them will benefit your business the next time it interacts with the Branch or does business with the Liquor Distribution Branch. The assumptions that are the most influential on Branch policy and procedures are as follows:

  1. While moderate alcohol consumption may have some modest health benefits, long term excessive drinking has adverse health effects.
  2.  Alcohol is a drug that, if taken in sufficient quantities, will affect short term mental judgment and physical dexterity.
  3. Though generally seen as a pleasant compliment or accompaniment to social occasions, alcohol has addictive properties that can lead to socially unacceptable behaviour when abused.
  4. Minors should be protected from the negative effects of alcohol consumption.
  5. Neighbourhoods and communities are impacted by the sale and manufacture of liquor and their opinions are essential to licensing decisions.
  6.  Control of the number and location of liquor primary licensed establishments prevents a proliferation of licensed establishments that may lead to the sale of liquor to minors and intoxicated persons, overcrowding or other actions that may be harmful to the community.
  7. It is in the best interest of the liquor and hospitality industries to encourage responsible drinking behaviours that contribute to the wellbeing of their customers and the public.
  8. Licence holders are responsible for designing their operations and conducting their businesses in such a way as to realize the outcomes and principles articulated in liquor licensing statutes and regulations.

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The “new” Liquor Control and Licensing Act Laws

Government Bill 27, what will become the “new” Liquor Control and Licensing Act has been available online for almost a month now, and while the language that appears in Bill 27 will probably become law without significant revision, it is important for industry stakeholders to understand that process. Though much of the criticism and confusion surrounding the implementation of last year’s Final Report is well placed, some of it stems from the public’s lack of understanding of the legislative process. If you have serious concerns about liquor law reform in this province, now is the time to contact your MLA and engage in the political process.

In case you have forgotten that classic Schoolhouse Rock video from your childhood, a bill is a proposed law (piece of legislation) that has been introduced in the legislative assembly by an elected member. Typically the MLA (or MP in the federal context) is the government Minister who will ultimately be responsible for the subject matter of the bill if it is passed and becomes an act. For instance Bill 27 was introduced by the Minister of Justice, the Honourable Suzanne Anton. Bills that relate to public policy, like Bill 27, are appropriately called “public bills” or “government bills”. For the 2015 legislative session in Victoria the legislature website identifies 27 such government bills. A member of an opposition party, or a government backbencher is also entitled to introduce a bill to the assembly, however without government support these bills are rarely passed into law and those that do often address niche issues and causes.

After being introduced to the legislative assembly and briefly explained (the 1st reading) the bill is later subjected to a general debate by the assembly as a whole (the 2nd reading). Assuming the bill passes the 2nd reading, it moves on to the committee stage where the bill is examined in even greater detail than the 2nd reading, and amendments are introduced. The “committee” can be comprised of the entire legislative assembly, or a select group of MLAs depending on the nature of the bill. At the 3rd reading the bill, along with any amendments made in committee, is voted on again. The bill that passes 3rd reading is the final form of the bill that will receive royal assent by the Lieutenant Governor and then become law as an act.

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Bill 27 – The “New” Liquor Control and Licensing Act

For liquor industry insiders the start of 2015 has been marked with frequent, and sometimes confusing, communications from the Liquor Control and Licensing Branch describing recent changes to the Regulation and new policies.

On April 1, 2015 a number of these new initiatives take effect. Certain of the announced changes are intended to provide liquor retailers with opportunities to locate and operate stores in ways that may be more convenient for consumers, and create consistency between public and private stores. These changes include:

  • Longer hours of operation (including Sundays) for BC government liquor stores
  • More BC Government stores will be fitted with refrigeration units to enable them to sell cold beer and wine
  • Grocery stores who obtain the requisite licence (VQA or Independent Wine Store) will be allowed to stock and sell 100% BC wine stored by the grocer, stocked in designated display areas, and purchased at designated check-out registers by certified employees
  • Existing licensees will be permitted to move their business (or transfer their licence) so that a new “liquor store within a grocery store” can be opened – subject to certain geographic limitations. In theory this will allow for “one-cart shopping experiences” between grocery and liquor. Under this arrangement the liquor retailer operates as a separate business, with most of the usual terms and conditions.

Other changes that become effective April 1, 2015 affect price. A November, 2014 announcement by the Ministry of Justice put British Columbians on notice that beginning April 1, 2015 all liquor retailers, including BC Liquor Stores, would purchase their product from the BC Liquor Distribution Branch at a common wholesale price. For better or for worse this change has done away with the previous model that provided different classes of retailers various discounts depending on the type of retailer they are. Whether this change in wholesale pricing will end up “levelling the playing field” for “all liquor retailers” or provide any meaningful benefit to consumers will be determined with time as the full picture of pricing changes becomes known. The private liquor retail sector remains critical of this new regime.

What has been given comparatively less attention was the introduction on March 26, 2015 of the first-reading version of Bill 27, described by the Minister of Justice as a “re-write” of the Liquor Control and Licensing Act that if passed will modernize outdated provisions and provide a legislative foundation to implement the outstanding recommendations from the Final Report delivered on January 31, 2014.

Assuming Bill 27 is passed, additional consultations will take place with licensees, local government and police toward the development of regulations that will bring the new Act into force and provide details on how the new Act will be interpreted, applied and enforced. Like under the existing Liquor Control and Licensing Act the regulations are where the real mechanisms of the Act are kept – and liquor industry stakeholders should pay close attention to details of the new regulation as they emerge. Until the new Act can be read in concert with the new regulation it is too early to tell how significant the effect of the new Act will be on stakeholders.

*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.