Wineries pour over concerns of grocery sales

B.C. wineries voiced their concerns about the recent modernization of wine and liquor regulations

B.C.’s wineries met with the province recently to learn more about the modernization of wine and liqour regulations. Some small and mid-sized wineries have concerns about the changes that will allow the sale of wine on grocery store shelves.

B.C.’s wineries met with the province recently to learn more about the modernization of wine and liqour regulations. Some small and mid-sized wineries have concerns about the changes that will allow the sale of wine on grocery store shelves.

B.C.’s small and mid-sized wineries are asking the province to take another look at the “unintended consequences” of the recent modernization of wine and liquor regulations in the province.

Just under 100 winemakers joined politicians including Penticton MLA Dan Ashton and Penticton city councillors and Mayor Andrew Jakubeit at the Poplar Grove Winery on Oct. 1 at a town hall-style meeting held by the B.C. Alliance for Smart Liquor Retail Choices.

Speakers at the meeting were educating winemakers in the area on Bill 22, the Special Wine Store Licence Auction Act, part of which allows the sale of wine on grocery store shelves, and asking for support on a six-month moratorium on the issuance of new VQA licenses under the bill.

Kim Pullen, proprietor of the Church and State winery, said the event was non-partisan, and noted that nobody was fear-mongering.

“The objective today is not to criticize, attack, defend any position whatsoever,” Pullen told winemakers.

He said the gathering was intended to see if “there are things we can do to maybe mitigate some of the unintended consequences that we think are going to happen.”

Those unintended consequences, according to the B.C. Alliance for Smart Liquor Retail Choice, could force private liquor stores out of business, unable to compete with supermarket prices. The alliance is asking for time to allow a through investigation of effects on small wineries and retailers before any decisions are made.

Representatives from the B.C. Alliance for Smart Liquor Retail Choice met with the premier’s staff on Oct. 5. In a press release from the alliance, Pullen said the meeting was “very productive and it is clear government is listening to our concerns.”

The government agreed to meet with stakeholders once more and that work will start immediately. The first of the new VQA licenses under Bill 22 won’t be issued until February or March 2016, which Pullen says gives stakeholders time to have an “effective input.”

The licenses will be for 100 per cent B.C. wine only and going ahead, a group of  winemakers, private retailers and grocery operators will be discussing how to implement the new licenses “in a way that supports small and medium-sized wineries while protecting private retailers,” the release states.

“The government listened to our concerns that we risked losing two or three of our valuable sales chains and it was clear form the meeting they don’t want that to happen,” Pullen said, adding that the government lived up to their promise, and now it’s up to industry groups to come up with a strategy.

The B.C. Wine Institute, which is the industry’s member-elected unified voice in the 25-year history of the wine industry in the province, said they are committed to protecting and promoting the industry for all of the members’ benefit.

“The opportunity to place our small number of licences into this new opportunity of higher traffic, well-marketed and agricultural product friendly environments is the right thing to do for our members who rely on these licences when the government and private stores will not carry their products, often due to their low production volumes,” said Miles Prodan, president and CEO of the B.C. Wine Institute in a press release.

They believe allowing 100 per cent B.C. wines on grocery shelves is “dramatically changing the business outlook for the better” industry-wide. Prodan said with a maximum 45 BC VQA licences available to qualified grocers after 2016, and carrying only one minor product line in comparison, “it is completely irrational to suggest that these 100 per cent B.C.-wine-on-shelf grocery stores could impact the viability of the nearly 932 licensed public and private retail stores.”

The B.C. Wine Institute argues that the only grocer selling liquor in the province is the Overwaitea Food Group from two licensed stores in Surrey carrying nearly 1,000 B.C. wine products. They state that more than 50 per cent of sales at the two stores are currently from small wineries not carried by the Liquor Distribution Branch, meaning that these wines and wineries are being exposed to the marketplace in a meaningful way for the first time because of this new sales channel.

Premier Christy Clark’s deputy chief of staff, Michele Cadario made a short speech at the town-hall meeting last week.

“For the premier and this government, the B.C. wine industry is hugely important,” Cadario said.

She said the government’s review was to get rid of old rules that no longer apply to the industry, as well as pave a path for the future.

“We know how jobs are tied to this and we know how passionately the wine industry really feels,” Cadario said.

She said the government would meet this week (Oct. 5) to go over the details of the new regulations.

“You can bet that this government will fight very strongly for this industry and we would never do anything that would unnecessarily jeopardize it,” Cadario said.

She said there are unintended consequences everywhere, not just the wine industry.

“We’re doing our best to address those as they come up,” Cadario said.

A representative with the Vintage Law Group, Mark Hicken, noted the shift of wine to grocery store shelves in New Zealand from zero grocery store wine sales in the late 1980s to nearly 70 per cent of all wine sales “within an extremely short period of time.”

“The effect of having an unregulated grocery store model is that it’s a seismic shift,” Hicken said.

For B.C. that would be a shift away from independent wine sellers, currently the province’s largest distribution channel for B.C. wines.

Leigh Large, whose family owns seven grocery stores on Vancouver Island, said it’s a slam dunk to stock wine on the shelves.

“If it was offered to me in my store I would be saying goodie-goodie,” Large said.

John Skinner, proprietor of the Painted Rock Estate Winery in Penticton, thought the meeting went well and was pleased to hear from the office of the premier and excited to open up a dialogue.

“There are serious decisions being made,” Skinner said.  “We’re concerned, we could be vulnerable and we just want to make sure that all the decisions that are made are sage, calm, and we take our time.”