Canada’s competition watchdog is warning that British Columbia’s liquor laws are out dated, anti-competitive and should be changed.
In an open letter to Attorney General David Eby, Canada’s Interim Commissioner of Competition Matthew Boswell is encouraging the province to update its distribution of alcohol model.
“The growth of new and innovative producers such as craft breweries has brought an influx of unique products to the market,” Boswell said.
“Limiting the ability of these producers to access the market and effectively promote themselves threatens to stifle competition and innovation.”
Under British Columbia’s current liquor policy, private liquor distributors cannot sell their products directly to hospitality retailers.
Restaurants, bars and hotels are limited to buying their alcohol products from government-owned stores at retail prices, as opposed to cheaper, wholesale prices.
The Competition Bureau says the policy restricts competition, raises prices for consumers, and limits access to a wider variety of specialty products.
The province is now reviewing the distribution system but hasn’t made any decisions on what the next steps will be. Attorney General David Eby is still reviewing a report done by Mark Hicken that has handed to government in April.
“The challenge for us is that the legalization of cannabis happened at the same time and we have been full out with that in terms of licences and supply,” Eby said.
“It is one of the priorities for me that liquor works better for the hospitality industry.”
The report puts forward 20 recommendations. Hicken’s panel concluded that there are significant problems with the current wholesale distribution model and one of the main challenges is delays in getting products out to the market.
The province is also struggling with the issue of a centralized distribution branch. The report suggests restaurants and bars should be allowed to buy liquor products at a wholesale price rather than pay what a consumer does at a provincial liquor store.
One of the biggest groups opposed to changing the current distribution model are the public sector unions who staff the Liquor Distribution Branch (LDB). Eby says their concerns must be weighed like everyone else.
“When you have issues around the safety of workers and the fair treatment of workers there are different things to balance and we are doing that now,” Eby said.
The report also addresses the issue of restaurants and bars buying liquor directly from distributors or producers.
Last January, the provincial government raided multiple restaurants in the province and removed liquor products that were not purchased from the LDB.
The hardest hit by the raid was Fets Whisky Kitchen on Commercial Drive in Vancouver, which had 242 bottles of whisky from the Scotch Malt Whisky Society seized, worth about $40,000.
The restaurant’s owner Allura Fergie says she is still fighting to get the liquor back and is happy the province is finally considering changing the rules.
“I am very hopeful we will get our whisky back and I am hopeful change is coming,” Fergie said.
“I am glad the ball is rolling and the conversation is out.”