B.C.'s liquor rules still sting
B.C.'s Liquor Distribution Branch reaps the profits of a monopoly that dates back to Prohibition—and many want that changed
A lawyer who specializes in liquor issues, Mark Hicken, says the provincial government is addicted to generating revenue by taxing alcoholic beverages.
Seated in one of the crammed backrooms of Davie Street's Marquis Wine Cellars, with wooden boxes of Bordeaux wines piled to the ceiling above me, I tell myself that if there's an earthquake, I'll die in style.
No bonk from some plonk for me. Stacked above me: several embossed cases of Chí¢teau Mouton Rothschild (2006), a bit pricey at $1,210 a bottle.
It's not really a seismic event that concerns me, though, but the shop owner's gesticulations and impassioned ranting. John Clerides, 51, is Greek and, therefore, genetically primed to explode. The target of his fulminations, paper flailing, table-thumping, and occasional retraction—for libel's sake—is the British Columbia Liquor Distribution Branch. Its policies and pricings have, he claims, led to this province having the most expensive liquor in North America and to B.C. wine buyers dying the death of a thousand cuts. His diatribe would be of little consequence except that—during a month of investigation—I hear precisely the same (if less voluble) observations from a half-dozen other high-profile experts on wine. Some request anonymity. Others, like Clerides, fear retribution from the powers that be for speaking out.
In a business where, I'm discovering, some see the bottle as half full and others see it as half empty, Clerides is the pessimist. He has little patience, he tells me, with the regulations that govern the LDB monopoly, and he hears all the time about well-known restaurateurs, specialty-wine-store owners, connoisseurs, and Alberta liquor smugglers who grimly face—or elude—the LDB's sky-high 123-percent markup on every bottle of wine and a 170-percent markup on every bottle of spirits sold in the province.
But it's not just the pricing that drives Clerides and his wine-drinking friends to apoplexy: it's the maze of restrictions, arbitrary rulings, and brutal wholesale margins, Clerides says, that has led Rich Coleman, B.C.'s former minister responsible for the LDB, to call the province's liquor-distribution system “a dog's breakfast.”
“The LDB's like a dictatorship. They're the bully on the playground,” Clerides says, waving a sheaf of proposals he has sent to B.C.'s Liberal government, suggesting ways the system might be modernized. “Hong Kong got rid of taxes on wine recently. They've become a wine-marketing centre. Alberta privatized its liquor-distribution system years ago. Prices are cheaper there. Liquor's cheaper in the States too. Europe doesn't have government-run monopolies. You buy wine anywhere. The LDB's mired in laws that go back to the '20s; it's a hangover from Prohibition. Try being creative! You think outside the box, you get squeezed.”
Clerides pauses in his screed, puts his thumb on a stack of wine-marketing ideas he'd like to see implemented in B.C., and crushes an imaginary bug.
When I ask Clerides who's responsible for this, he says a name. It's the same name I hear from every authority I speak with. And so I begin pursuing Jay Chambers, for 17 years the general manager of the LDB and the person responsible, critics say, for guiding a system that hurts B.C. restaurants, private liquor stores, and specialty wine shops because all must buy from the LDB alcohol monopoly.




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I cannot believe that the supposedly "free enterprise" BC Liberals don't have the guts to bring the liquor laws into the 21st century. This government needs to focus on healthcare and education rather than distributing liquor and running retail outlets.
The $300 million this government spends on running this antiquated system could be better used on social programs. I also suspect that the high cost of liquor in BC is partly responsible for driving consumers to non-taxed illegal substances.
The horrible taxes reaped by the provincial government must be eliminated. It is beyond embarrassing and the sooner the government sobers up the better. We are living in a dysfunctional paradise.
If you're unfortunate enough to have a cultural background where good wine is a normal part of life, have some sense of smell and taste, and enjoy a half bottle of a halfway decent Rhone ($20+) with dinner you're going to pay a hell of a lot more in taxes than the gangsta wannabes guzzling Molson "cold shots" in the parking lot before hitting the club.
But hey, at least the government has protected us from roving gangs of lawyers and wine connoisseurs wreaking havoc on the cowering masses of Vancouver.
Do the math.
Plenty of western European countries have adequate social systems without having their governments sell their booze.
It's just plain ridiculous. These high mark-ups on wine make it a drink for the rich in BC. Shouldn't poor people be able to afford a glass too?
Read the article, the LDB brings in 900 million a year.
Yet all the haters out there want liquor to be privatized so that we can get cheap booze and create more minimum wage jobs in the process. Screw that.
Oh and @ Dan in Van... read my first post carefully, the profits from the LDB go into the Ministry of Housing and Social Development. Guess what... it goes into building low income housing and funds the addiction programs for those who fall to alcoholism. What better use for the money that we are supposedly being raped of?
And while I'm at it, for those who complain about the selection of product, the LDB employs the first Western Canadian to achieve the Master of Wine designation, and the only female MW in Canada. She is a hard sell, and only brings in quality products that can be secured in quantity. Who better to be picking the wine for the LDB's shelves?
Clearly there are a lot of vested interests in maintaining the current system (I imagine some posters here make money off this system).
The net result of the LDB is that a minority of people benefit from these special union privileges. But the hard working minimum wage earners of BC are denied the pleasure of enjoying a reasonably priced glass of wine or beer.
The current system is elitist and should be changed for the greater good.
Now bring on the fight to privatize BC. BC is stuck in the 1920's time capsule with outdate laws.
Piss off unions. Ready to fight...a big middle finger to you.
Obvioulsy this is a self serving agruement and belongs like provincail monopolies in the dust bin of history.
Name one business that is better run by a government than by priviate individuals?
Unforttunatley for the unions members there is not one.
10-12% of British Columbia's population are responsible for nearly 50% of the consumption of alcohol - while - 50% of the population drinks very little or not at all.
Not ironically-- 8-15% of the population of British Columbia is alcohol dependent or has a problem with alcohol consumption. The average heavy drinker is actually of higher annual income (though the perception is of the rubby dub). The average problem drinker - who is of higher income and who consumes much of the annual sales of alcohol is also the source of the major social cost associated with alcohol of about $3,000-$3,500 per year per person for health care - criminal - etc.
So - absent the calculations relating to the bureaucracy - the person consuming the alcohol makes more money than average and costs money in health etc. If taxes on alcohol are decreased - we are therefore subsidizing the alcoholic and problem drinker - when the bureaucracy is ex the discussion.
Rich Coleman doesn't come to the debate with clean hands - he comes from the liquor industry and is their friend. To be brutally frank - he is also a poster person for a somewhat unhealthy appearing person---which further hurts his credibility anywhere near this subject matter - whether he likes to drink alcohol or not.
For 50% of the population who drinks little - its cost is not a factor - the folks concerned about its cost are naturally those whose budgets are directly influenced by their heavier consumption and their nearly exclusive burden on the system.
The social cost of alcohol must be paid for by the people who use it----I don't support the lowering of taxes on alcohol.
Alcohol is the Grand-Daddy of all addictive drugs and it will never be subject to "free market". Keep it under the LDB.
That is what happened in Alberta. Ontario kept the liquor distribution under the government control. Do you hear any comments from Ontarians?
Now, I have seen the Alberta situation and it is tough in smaller centres to get some of the better beers. Prices are a bit better on mass market stuff, but the same on many other things.
btw, Dan in Van, think you need to look at your figures again. IF the gov kept the taxes and mark-up the same (to generate that $900), then private companies would have to ADD to the price in order to both cover the cost of the stores and a profit.
Yes, in theory the government would save some bucks, but the consumer would be spending more.
The only way you will see a significant saving is if the government is willing to take a significant reduction.
So we need to pay the people mindlessly ringing up alcohol twice as much as the people who are raising the next generation (because in Vancouver, no mother can afford to stay home with her child if she expects to afford her housing)? You're kidding me.
Seriously, Rich Coleman, Jay Chambers, all of you government hacks...I'm buying what alcohol I need abroad. I'm not paying the salaries of people who make $23 an hour just for scanning bar codes. When you reform daycare up here, and show me that BC's insane alcohol taxes are going to pay for it, then I'll reconsider, but until then, I might as well save my own money to pay the nanny I HAVE to have, because I've been on a daycare waitlist (with priority!) for nearly three years, and have my alcohol sales taxes support Washington state, or Australia, or Germany, or France.
I am an Agent and I supply alcohol product to the system. What is most disappointing is the attitude of the BCLDB when it comes to ideas, marketing proposals and innovation within their stores. They also on a regular basis support and market big brands and the Agencies who represent them. They do not actually work with smaller brands to develop them AT ALL. Big players are their favorites even though helping a small brand be big is in their interest in terms of sales revenue. How can they help? In store displays of products is a start. On-line sales is another very big area.
We think the LDB mark up is too high despite that fact the funds build schools and finance hospitals..it's simply too high.
I would really prefer to see a modernized LDB not an abolished one. I would prefer to see a bigger discount for restaurants and private stores.
First , restaurants lost their discount when our government brought in the HST! LRS's didn't.
Second, "Marianne"get your facts straight! You may only see the employees mindlessly scanning bar codes but how do you think the product actually gets on the shelf?
As for $23 wage, maybe for someone who has been with the LDB for years but not new hires!
I would rather see my taxes go toward our social services/medical programs/education rather than straight into the pockets of large corporations outside of BC!
On the latter angle - I do not believe there is any proof of a true free market in this country - unless Lee Guy is able to sell his homemade to others and make a profit. I would support Lee the most - except if Lee's home brew poisoned someone or made someone otherwise sick - I would then support him least. Should alcohol be regulated in any way? Should BC wine and beer producers be able to sell directly to consumers--so long as they contribute to social costs?
If we agree with regulation - then who does the regulating?
Government is supposed to represent the people - in theory they are the better choice - but does government really represent the people--I mean do they -- really--at all times and in all circumstances//even though clearly the people pay the whole of the freight?
If social costs are an issue - then there is theoretically at least a closer correlation between government (health care) (criminal courts) -- public safety and distribution of liquor.
How could private interests do this better? I doubt they could---
I choose to buy product from small local farmers even though the prices are higher. I choose to do this because I want to support small farmers. Share the wealth and don't be so stingy and selfish,
I don't agree with some of the antiquated beauracracy of the LDB but the rest of it does some good in regulating underaged drinking, drinking and driving and many social programs.
As to Alberta, I hear first hand experience of more negatives than positives of privatization, especially with the giant liquor companies.
I think this article is slanted towards a more self-serving purpose than looking at the whole picture. I'm glad I don't drink but, hell, I hate having to pay higher prices for organic products. But if it helps the "smaller" people, so be it. No system is perfect.
A fee is charged, most often $10, with special days or options when the fee is complimentary.
Here in BC that is not allowed with the agency sighting safety as the reason.
Seeing you can only buy wine that has passed through the agencies hands it seems ridiculous that you can't take your own wine to a restaurant and pay a fee for the privilege.
Some restaurants have great food but can't afford to keep a wine list that matches or compliments the dining experience.
This is unfortunate and one would hope that the new Liberals might take note.
The MW just started her job recently and is very quality driven. The laws and taxes are not her jurisdiction. It's the government filling the coffers. If the prices of inexpensive wines were slightly elevated they could drop the prices of the premium wines that are sold in small volumes. It's an alcohol tax and the alcohol is almost the same amount in each bottle.
I can bet those people that work for $10-$12 an hour in Liquor Depot etc. have their eyes on a home purchase and college for their kids in their future.
Slamming people that make a liveable wage is ridiculous.There is no crime in being able to support your family and the economy, and pay taxes to help those less fortunate.
Ever noticed how many BC private liquor stores (not wine stores) constantly have help wanted signs in their windows?
Then there is always the great staff morale and product knowledge.I' ve always said "you can only get an elephant to work for peanuts".
As far as the number crunching goes 'Figures don't lie, but liars can figure".
If I were a liquor baron who wanted to lobby the government to privatize, that's how I would do it.
But seriously, do we all think that prices of liquor will be reduced by, for example 30%, if the taxes were lowered by 30% or resaurants got 30% discounts? These people running businesses are not stupid. They will make 30% more, because they know you are already willing and able to pay it.
Unions raise the incomes of blue-collar workers more than white-collar workers, increasing the chances for lower-class individuals to join the middle class, become homeowners and send their children to college.
Private Liquor can sit on his middle finger. It's not the first time the Union has fought for the good of everyone, and it won't be the last.
I find this topic to be one of culture... Specifically one of a lack of trust in the adults of this province.
The drinking culture in BC is one that is unhealthy and leads folks to believe that strict government control is a necessity.
Fix the culture and then we can look into liberalizing liquor retail to what the majority of the world has...
This needs to change. And we need to be the ones to force the change. Let's be vocal about this.
Government can still collect tax for liquor sold in private companies.. It is called a sales tax. They can add another sales tax called BC Liquor tax.
Government run stores have no place in a free market economy.
This endless debate about proctecting a bunch of union jobs and government revenue for social services is pointless in a free market economy.
What were the lawmakers thinking in the 1920's?
People, including myself, are so used to the social engineering and public profiteering of our grandma state, that they can't see that there are other ways of handling this than maintaining the sky-highest liquor prices in North America and paying for a government cartel to manage them. Sadly BCers are so used to watching their money fly out of their pockets to god-knows-where, that it's gonna be hard for this to gain any traction.
Great article, sad state of affairs. I guess I'll just save my recreation dollars up and go to the US for my grown-up activities. Too bad I'm rarely encouraged to enjoy food and drink on the town here. Life is good sober, don't get me wrong, but a great drink at the right price is one of the finer aspects of modern life. #firstworldproblems