The Evolution of BC Liquor Laws Legal Issues Affecting the BC Wine Industry Mark Hicken, Vintage Law Group November 2018. Penticton, BC
Introduction ✤ Liquor Regulation in BC - Have to Trace Back to Prohibition ✤ Uniquely North American Approach. Very Different from Europe.
Introduction ✤ BC Prohibition – reaction to “Wild West” situation – lasted from 1917 to 1921 ✤ October 21, 1920: BC voted to repeal Prohibition. ✤ June 15, 2021: Repeal of Prohibition and Beginning of Government Control System
Post-Prohibition Legacy of Regulation ✤ No alcohol vs. tightly controlled alcohol ✤ Morality based - starting mentality was significant control ✤ No distinction for wine ✤ Wine = Alcohol Alcohol = Danger Danger = Strict Regulation
Effects: Retail Distribution ✤ Tightly restricted retail system ✤ Limited access to other Canadian markets (interprovincial shipping) ✤ No conventional wholesale discount system
Effects: Hospitality Industry ✤ Restaurants/Bars ✤ Strange rules over the decades ✤ Food/liquor ✤ Entertainment ✤ Operations ✤ Zero wholesale discount
Effects: Manufacturers ✤ Operations as “agent” of the LDB ✤ Land Based vs. Commercial Wineries ✤ Restrictions on LBW ✤ Regulation through LDB manufacturer agreements ✤ VQA, GIs, Packaging ✤ Winery Terms of License
Effects: Trade Regulation ✤ Pricing & Inducements ✤ Tied House Rules ✤ Advertising & Promotions
Effects: Wine Culture ✤ Tasting Event Rules ✤ Off-Site Tasting Rooms ✤ Farmers Market Tastings ✤ Picnics ✤ Special Occasion Permits ✤ Caterers
Structure of BC Wine Regulation Statutes: Liquor Control and Licensing Act, Liquor Distribution Act, Food & Ag. Products Classification Act Regulations “ Policy ” : e.g. LCLB Manuals Terms and Conditions of License Other: LDB Manufacturer Agreements
Modernization: Provincial Griffiths Report, 1929. Brewery cartel and political influence. Stevens Commission, 1952. Lack of enforcement, trade practices issues, monopolies. Morrow Commission, 1970. Liberalize liquor policy, allow advertising, trade practices. 1975. Separation of licensing and distribution in regulatory structure.
Modernization: Provincial ✤ 1978. Promotion of BC Wine – policies introduced. ✤ Jansen Policy Review, 1987. Sampling, sponsorship, advertising. Responsible Service. ✤ Surich Policy Review, 1999. Support for hospitality industry, licensing reform – focus on public safety. ✤ Privatization, 2002. ✤ Retail & Hospitality changes, 2010. ✤ Yap Policy Review, 2013-14. 74 recommendations.
Modernization: Federal ✤ Interprovincial Shipping ✤ Comeau ✤ Steam Whistle ✤ Federal labeling laws ✤ Trade issues
Benefits for BC Wineries ✤ Tremendous growth in BC wine industry ✤ Regulatory exemptions: ✤ Direct delivery system ✤ Preferential treatment on LDB markup ✤ BC-only retail stores ✤ Trade issues, consumer issues ✤ USMCA - Wine in Grocery ✤ USMCA – Alcohol Annex ✤ WTO Challenges
BTAP Review/Report ✤ Business Technical Advisory Panel and “Hicken Report”, 2018-19. ✤ 24 Recommendations. ✤ Process: ✤ Initial Engagement (22 stakeholder groups, 4 health orgs., 2 labour orgs., 1 indigenous winery) ✤ Panel Meetings ✤ Report with Recommendations (available on LCLB web site)
BTAP Review/Report ✤ Recommendations: ✤ LDB Distribution ✤ LDB Data Sharing ✤ LDB Governance ✤ LDB Retail Mandate
BTAP Review/Report ✤ Recommendations (cont’d): ✤ Hospitality Price/Discount ✤ Licensee-Licensee Sales ✤ Health & Social Resp. ✤ Manufacturing & Licensing ✤ LCLB Fees
Regulatory Focus ✤ No longer a moral issue ✤ Focus on public safety and health ✤ Current regulatory directions: ✤ Government revenue ✤ Encourage economic activity ✤ Consider business effects ✤ Address problem consumption and behaviours ✤ Avoid influence issues
Conclusion ✤ Post-prohibition restrictions were extensive. ✤ We have come along way. BC producers obtained exemptions from regulation. ✤ Plenty of potential changes ahead. ✤ Further growth of BC food and wine culture.
Thank You! Questions? ✤ Mark Hicken ✤ Vintage Law Group ✤ @markhicken ✤ T 604 868 1375 E mark@winelaw.ca W www.winelaw.ca
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