Friday, November 29, 2013

Recommendations for Booze in Grocery Stores Miss the Mark

In a week where the BC Liberals got hammered for allowing BC Hydro to raise rates 28% over the next five years and for letting BC Ferries executives keep their ridiculous bonuses while cutting ferry services to isolated, ferry-dependant, coastal towns, Parliamentary Secretary John Yap announced that he has recommended to the Attorney General and Justice Minister, Suzanne Anton, that liquor policies should be changed to allow alcohol to be sold in supermarkets.


But before you start dreaming of skipping down the aisles of your local Safeway, plucking bread off the self with you right hand and your favourite craft beer off the other shelf with your left, read the official new release here and realize that this recommendation is not quite what it appears to be and, when you get right down to it, is quite disappointing.

After looking at this, my previously posted "cautious optimism" has been dampened as it looks like instead of being brave, bold, and truly going for it, Yap is going to play it safe with his recommendations.

It is one of those announcements that looks brilliant when you read the headline, but when you actually get to the details as to what is happening you realize the government is just attempting to pull one over on the public, like when the Liberals announced, "Ferry Executives Have Bonuses Cut," when in fact what really happened was that the bonuses were just rolled into the executives' wage packages and had not been cut at all.

In fact, if Anton follows Yap's recommendation, it will achieve, at best, little more than just switching the physical location of private retail liquor stores (LRS), making it more convenient for some and less for others, depending on their shopping needs and, at worst, will have little impact at all as the hassle, cost and logistics of putting alcohol in retail grocery stores will not be worth it for most.

Let's start by looking at the recommendation and play out what this whole thing will look like assuming it gets past the Attorney General.

Yes, Yap is recommending that alcohol be sold in grocery stores, but the news release states that, "in doing this, B.C. should maintain the current cap on the total number of retail outlets in the province."

Say what?

So Superstore may be allowed to soon sell booze, but only if they can manage to buy up an existing liquor retail license, a license with an already-inflated value, which will increased ten-fold in price because those who have them know that there soon will be people with very deep pockets who want them. 

It also means that convenience of getting your beer with your groceries may be at the cost of you being able to go into your small, uncrowded, private retail liquor store (LRS) when you only want to buy a six pack and don't want groceries because that LRS may no longer exist due to having sold their license for stupid amounts of money to a large retail grocery chain. 

What Yap has heard is that consumers want to have the convenience of being able to buy booze with their groceries. I am sure not many of those same consumers he heard from said, "but please take away some of the LRS locations so that I am forced to go into a crowded grocery store even when I don't want to." 

Yap has put the lid on liquor retail outlets to keep those who think more liquor retail outlets will lead to decreased public safety and increased public harm off the backs of the Liberals. 

And even if someone is willing to sell their valuable LRS license to a grocery store, there are current restrictions in place as to how that license can be transferred, those restrictions, which were announced just last February, being, "(LRS) licensees can continue to apply to relocate their store anywhere within the same municipality or up to 5 kilometres away provided the proposed site is more than one km from an existing LRS or LRS relocation application already in progress."

Think about small, isolated towns, like say, Powell River, where I live, where there are less than a handful of LRS locations, one being within a kilometre of all the grocery stores in town. If one of those grocery stores wants to sell alcohol, they have to buy that one LRS license, which is close by, or forget about it because they would be violating the above mentioned policy. This distance between LRS locations will come into play frequently, both in rural and urban settings, and really limit which grocery stores can get involved in the sale of alcohol and which cannot unless Yap is recommending to change that policy as well, which very well might be the case.

And even if the grocery outlet manages to find an LRS license to buy, and has a location to which it can be legally moved to, they then have to look at building a "store within a store" in order to segregate the booze in order to keep it away from minors and those who find alcohol offensive or too much of a temptation. I am not sure just how separate from groceries Yap feels the alcohol needs to be, but if you go by the track record of the Liquor Control and Licensing Branch (LCLB) and the Liquor Distribution Branch (LDB), stores will have to build a full-on bank vault to ensure little Johnny doesn't get his hands on the booze, even though we have laws in place requiring two pieces of ID be shown if the customer appears under 25 years of age.

You have to be 18 to buy cigarettes, yet all you have to do is ask the cashier to get you some, show ID and off you go. For alcohol, you need complete separation for some reason.

So add the price of store renovation on top of buying a LRS license to the tally for the grocery store.

Next consider that the price of the booze is still going to be highly regulated and profit margins dictated by the LDB who basically set the price structure for alcohol in BC. Alcohol cannot be used as a lost leader to get folks in the store, like in many places in the US, because minimum prices will be set and the stores have to stay competitive with existing LRS locations and government liquor stores (GLS), therefore keep their prices in line with other LRS-GLS outlets, so profits may be marginal.

Add to the cost of being able to sell booze in grocery stores the added hassle of having the LCLB and their often overzealous liquor inspectors lurking about, not to mention the undercover, under-aged, 18-going-on-36 folks the LCLB send into LRSs to try to entrap them to sell booze to minors, which brings about massive fines.

This idea sounds less and less attractive if you are a grocery store owner, doesn't it?

Don't get me wrong, I am all for alcohol to be sold in grocery stores. In fact, I am all for the more Quebec style where beer and wine can be bought in corner stores, which is truly convenient. I feel downcast and disheartened by the restrictions and cautiousness of these proposed recommendations. It sounds to me like Yap really did not hear what the consumers wanted and if he did, was too afraid of criticism from those opposed to really make meaningful recommendations for change.

Lets hope I am wrong, this all works out and the rest of the 69 recommendations he has passed on to Anton are truly inspired, bold and actually will bring about some modernization to our liquor policies.

Next post...a look at the alarmist arguments against this idea.

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