Municipalities Responding to Liquor Issues

Local governments have been dealing with several issues that have emerged as a result of the Liquor Policy Review to ensure that the proposed changes are assessed from a land use and community impact perspective.  The two prominent issues are BC wine being sold on grocery store shelves and the ability for a liquor manufacturer (brewery, winery, or distillery) to have a bar area, referred to as a manufacturer’s lounge.

Wine in Grocery Stores

The wine in grocery store initiative has two components.  The first is the relocation of VQA wine store licenses from the independent store model, which has existed since the mid-1990s, to relocation inside grocery stores.  On December 16, 2015 it was revealed at a City of Vancouver Council Meeting that the British Columbia Wine Institute had entered into an exclusive agreement with the Overwaitea Food Group to exclusively sell them all of their VQA licenses. Since then the Overwaitea Food Group has been relocating these VQA licenses into their grocery stores.

The second component of the wine on grocery store shelf model is the auctioning off of 18 dormant wine store licenses.  To date, the government has auctioned off six of these licenses, which have been purchased solely by the Loblaws grocery group.  The purchase sale price on these auctioned licenses has ranged anywhere between just over $1 million to $1.25 million per license.  Therefore, only two major grocery groups to date have 100% control of the wine on grocery store shelves model.

Local governments are responding to the grocery store issue.  Some municipalities, such as Nanaimo and Richmond, have developed or are developing policies that prohibit wine on grocery store shelves.  Meanwhile Penticton and Kelowna permit wine on grocery store shelves.  Other municipalities, such as Pitt Meadows and Coquitlam, require a 1 km radius separation between other liquor retailers.  Municipalities including the City of North Vancouver and the municipality of Saanich require site-specific rezoning.

Only two major grocery groups to date have 100% control of the wine on grocery store shelves model.

A few municipalities, such as the City of Kamloops, have changed policies by allowing wine in grocery stores, then not allowing it and now they are reviewing the issue again.

The municipalities that are responding negatively to the concept of wine on grocery store shelves are choosing one of three options: prohibiting it outright, require rezoning application or require a 1 km radius separation between retail stores.  The municipal concerns around wine on grocery store shelves tend to revolve around the following issues:

·        the social issues and costs associated with wine in grocery stores, including policing and social costs;

·        loss of employment within the community of private liquor stores;

·        easier access to alcohol products for high risk groups, including minors; and

·        proximity to other liquor retail establishments.

Manufacturer’s Lounges

Another significant issue is the Liquor Policy Review recommendation to allow lounges at liquor manufacturing establishments. Patrons can consume products from the manufacturing establishment and also consume products from other licensed manufacturers (up to 20% in total).  Manufacturer’s lounges can also sell food and have entertainment, such as TV monitors, musical entertainment and dancing.  Therefore, lounges operate like a liquor primary establishment.  The concern that is being raised by municipalities is that these manufacturer’s lounges are usually located in an industrial zoned area, where features such as lounges or liquor primary licenses and outdoor patio areas may be prohibited.  In addition, there is a concern that these lounges are being licensed in a way that is a much easier process than applying for a liquor primary license.  Therefore, various municipalities, such as Port Moody, Coquitlam and Port Coquitlam, want the economic activity and jobs of the liquor manufacturing licenses, but want to make certain that the proper controls and review processes are in place, and they do not infringe upon the integrity of their land use policies.

I would encourage liquor store owners and manufacturers to carefully monitor their municipality in terms of these developments over the next few months. If you are interested, stay tuned to possible considerations by council of any changes to policy with respect to the wine on grocery store model or the manufacturer’s lounges.  ABLE BC along with myself have been very involved in these issues, so if you want more information please contact Jeff Guignard at ABLE BC or myself.

Bert Hick is President of the Rising Tide Consultants, which specializes in liquor license and operations consulting for the hospitality industry across BC, Alberta and Ontario.