B.C. Beer Blog

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Posts Tagged ‘NDP

BC Liquor Law Reform Post-Election: Where Do We Go From Here?

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by WanderingPaddy

The election hangover has long past. British Columbians who were excited about the possibility of the NDP taking charge and following through on their promise to reform our provincial liquor laws “one practical step at a time”, have come to grips with the reality that we have four more years ahead of us with the Liberals steering the political ship. Hopefully, not four more years of business as usual.

The provincial Liberals have made some positive changes to our liquor laws and policies over the past few years, but have not “overhauled” them as they claimed in a February press release. The Liberal approach has been haphazard, at best, and reactionary, described by the NDP as a “piecemeal approach to liquor policy,”not part of a systematic, comprehensive plan.

The NDP had made it loud and clear, both before and during the election, that they were committed to a full review of current BC liquor laws. This would have included a comprehensive consultation with the BC liquor industry to work out an effective strategy to modernize our liquor policies, which even the Liberals have described as archaic. They have, to this point, also been very open to listening to consumers. I have had meetings with several NDP MLAs where we discussed issues that negatively impact the craft beer-drinking public.

We will never know if the NDP would have been able to keep that election promise. But my sense is that the commitment is real, and that they are ready to continue to push the Liberals from the opposition side of the BC Legislature to start a full review.

So where do we go from here?
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The Sh*t Has Hit the Fan

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by WanderingPaddy

The shit really hit the fan on Thursday, splattering all over the BC Liberals and their plans to fast-track the sale of the LDB warehouses and warehouse distribution system.

NDP MLA, and my favourite BC politician at the moment, Shane Simpson, flung the poop when he dropped a bombshell, producing 39 pages of documents indicating that the BC Liberals, as recently as June 2011, had no plans to privatize liquor distribution. Yet weeks later, after then Solicitor General Shirley Bond was approached by Exel Logistics VP, Scott Lyons, the government had a change of heart. They decided to privatize, despite having no business case.

After Simpson released the documents accessed through a Freedom of Information request, a media frenzy erupted. I especially enjoyed Vaughn Palmer’s grilling of Labour Minister, Margaret MacDiarmid, on CKNW. MacDiarmid’s comment that “governments do change their minds”, is ridiculous under the circumstances. Consider that last June, LDB privatization was not on the table. But after the meeting with Lyons on August 25, privatization was alive and moving forward. It recalls BC Liberal claims that the HST “was not on their radar” prior to the 2011 election, yet weeks after being voted back into government, Gordon Campbell’s Liberals were ramming the hated tax down our throats.
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LDB Privatization: A Guide to Some Great Reporting

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by WanderingPaddy

Since February, when Liberal Finance Minister, Kevin Falcon, dropped the bomb that the provincial government was going to sell off the province’s two liquor distribution centres, and with them, the province’s warehouse distribution system, it seemed everyone associated with the local liquor industry has been voicing concerns about how this is going to impact the BC liquor landscape.

The Alliance of Beverage Licensees of BC (ABLE), who represent more than 1,000 pubs, bars and private liquors stores, has come out against the privatization. The BC Government Employees Union has come out against the privatization. The NDP has come out against the privatization, with NDP alcohol critic Shane Simpson stating in the BC Legislature, “The process is tainted.” CAMRA BC, on behalf of craft beer consumers, is about to officially come out against the privatization. Heck, even the mostly inert Craft Brewers Guild of BC have gotten in on the action and gone public with their displeasure at how this will negatively impact the province’s alcohol industry.

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Electoral Rhetoric on Beer Prices

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I’ve recently heard people claim that the NDP, if elected, will raise taxes on beer (something that the Liberals already did to all liquor on April 1). This is false. The NDP have said they would reduce the discount to private liquor stores from 16% to 10%.

In response to this and the NDP’s vow to raise the minimum wage to $10, the Alliance of Beverage Licensees of B.C. (ABLE), a provincial advocate group for approximately 1,000 private liquor stores and pub owners, claims this will force them to raise prices by 25% or more, translating into an additional $3.00 on a $12.00 six-pack. However, ABLE Executive Director, Kim Haakstad, said that the $3 figure came from discussions among group members, not from any economic study to determine a more precise impact.

Taking their cue, Liberal leader Gordon Campbell said on May 4, “I can tell you this. I am not drinking beer. But if they put a $3 cost on a six-pack of Diet Coke, I’d be mighty upset.”

Again, the NDP are not saying they will do this. They claim that their policy will level the playing field between government and private stores, raising $155 million in government revenue over the next three years. This will have no affect on the price of liquor in government stores, but it may certainly be aimed at protecting the BCGEU’s union jobs.

Recall that Campbell increased the discount to private stores in 2007 from 13% to 16%. Al Arbuthnot of the ABL said at the time, “We presently sell more than 50% of the beer in the province and it will allow the operators to be a little more competitive with the government stores. I think you will see prices come closer in line with the government stores.”

I don’t know about you, but I never saw that happen in the private stores I go to. So if prices were already 10-20% higher in private stores before the increase, where did the savings from the additional 3% discount go? Doubtful the staff got a raise as ABLE is against raising the minimum wage.

ABLE also does not support private rural agency stores getting more of a discount than their current 10%. According to the Kamloops Daily News, ABLE’s Haakstad argued that there’s no business case for giving rural stores the same discount as other private stores. “Rural agency stores are set up to service the community,” she said.

In an interview with The Province, Haakstad also argued that “rural-agency stores are established businesses with other income from groceries and gasoline and marina operations. Our independent stores don’t sell much else besides beer, wine and spirits — except maybe some beef jerky.”

Ultimately, what matters is that a business can achieve enough of a profit for the business owner to make a decent living by providing goods or services that are attractive to consumers. I doubt the intention of rural stores is to run as a non-profit society. Otherwise, they would be constituted as such. And selling more products does not ensure one makes a higher profit/better living. These arguments strike me as being self-serving. Rural agency store owners would probably agree.

So has privatization benefited consumers in B.C. so far? The Consumers’ Association of Canada found that the BC government’s privatization of liquor sales has forced consumers to pay millions of dollars more for beer, wine, and spirits while there is less product selection at individual private stores.

So from a consumer and taxpayer point of view, one could say people are generally worse off than before. Why don’t we hear about it? Why don’t more people buy their beer from a government store than private? Probably because they don’t care enough to be bothered to do anything about it. They are willing to pay a premium for mass-market beer that is readily available in a government store at 10-20% less cost because it is chilled and convenient for them in terms of store hours and/or location.

So be it if one can run a profitable business from this, but I’m not for taxpayers subsidizing mediocrity, whether it’s private or public. Ultimately, I’m for whatever system offers the opportunity for getting the best value and selection. According to Ted Hlokoff, who operates a rural agency store in Anahim Lake, private liquor stores have an average markup of 20-25%. With the 16% discount off the LDB price, this adds up to a margin of as much as 40%. [Note: average figures are not necessarily reflective of a particular business’s circumstances.] By contrast, for government stores, Hlokoff says the margin is 27%. Also, rural stores cannot mark up their products more than 5% above the LDB retail price, but ABLE’s stores can mark up product as much as they want.

So when it comes to beer in BC, I see problems with public, private, and rural stores. People have argued for a fully-privatized system like Alberta, but I’m not sure they have it much better than we do. I’m looking into it…