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Important Policy Changes for BC Liquor Industry

Some recent significant developments in the BC liquor industry …

Firstly, the BC Government has made wholesale (i.e. normal) pricing for the hospitality industry permanent. This measure was introduced in July of last year on a temporary basis to assist the struggling industry and was set to expire at the end of March. However, the change has now been made permanent. This is a policy reform that the restaurant/bar/hotel industry has been requesting for decades. It was a recommendation of the original BTAP Report and was the subject of continued consultation of the BTAP group and Government.

The policy change means that BC now has a normal pricing system for liquor in the hospitality business under which the industry can purchase liquor at the regular registered wholesale price (this happens almost everywhere else in the world). Prior to this, and for the most part, industry purchased at full retail price (although land-based wineries in BC had some flexibility on this). While this change will be universally welcomed by the hospitality sector, it will create a financial hit for any manufacturers that were previously selling to hospitality customers for prices greater than the registered wholesale price as these manufacturers would have been able to pocket the increased margin. The policy rationale for making this change was that the hospitality sector needs this assistance as a result of the pandemic. News release here: Permanent wholesale pricing will help hospitality sector recover.

Secondly, Government has also re-introduced the ability of local manufacturers to deliver direct to consumer from secondary storage locations. This measure was also introduced on a temporary basis last year and expired on October 31. It has now been re-introduced with a current expiry date of December 31, 2021. This measure was also the subject of continued consultation between the BTAP group and Government. I note that this also places BC manufacturers on an equal footing to their competitors in neighboring jurisdictions. All of the west coast jurisdictions currently permit this. LCRB Policy change is here: DTC Off-site Storage Permitted.

Finally, Government has also made permanent the ability for hospitality licensees to sell alcohol products for take-out with a meal. This measure was introduced as a temporary Covid-relief measure last year but is now permanent. Again, the policy rationale for this change was to provide assistance to the sector as a result of the pandemic. This policy is also common in other jurisdictions and may create greater sales of local product in this channel as well as potentially opening up some new business models. LCRB Policy change is here: Permanent Sale and Delivery of Liquor for Off-Site Consumption