Legal Issues Affecting the BC Wine Industry Mark Hicken, Vintage Law Group

November 2018. Penticton, BC

The Evolution of BC Liquor Laws

Introduction

✤ Liquor Regulation in BC -

Have to Trace Back to

Prohibition

✤ Uniquely North American

Approach. Very Different

from Europe.

Introduction

✤ BC Prohibition – reaction

to “Wild West” situation –

lasted from 1917 to 1921

✤ October 21, 1920: BC

voted to repeal

Prohibition.

✤ June 15, 2021: Repeal of

Prohibition and Beginning

of Government Control

System

Post-Prohibition Legacy

of Regulation

✤ No alcohol vs. tightly controlled

alcohol

✤ Morality based - starting

mentality was significant control

✤ No distinction for wine

✤ Wine = Alcohol

Alcohol = Danger

Danger = Strict Regulation

Effects:

Retail Distribution

✤ Tightly restricted retail system

✤ Limited access to other

Canadian markets

(interprovincial shipping)

✤ No conventional wholesale

discount system

Effects:

Hospitality Industry

✤ Restaurants/Bars

✤ Strange rules over the

decades

✤ Food/liquor

✤ Entertainment

✤ Operations

✤ Zero wholesale discount

Effects: Manufacturers

✤ Operations as “agent” of the

LDB

✤ Land Based vs. Commercial

Wineries

✤ Restrictions on LBW

✤ Regulation through LDB

manufacturer agreements

✤ VQA, GIs, Packaging

✤ Winery Terms of License

Effects:

Trade Regulation

✤ Pricing & Inducements

✤ Tied House Rules

✤ Advertising & Promotions

Effects:

Wine Culture

✤ Tasting Event Rules

✤ Off-Site Tasting Rooms

✤ Farmers Market Tastings

✤ Picnics

✤ Special Occasion Permits

✤ Caterers

Structure of BC Wine

Regulation

Statutes: Liquor Control and

Licensing Act, Liquor Distribution

Act, Food & Ag. Products

Classification Act

Regulations

“Policy”: e.g. LCLB Manuals

Terms and Conditions of License

Other: LDB Manufacturer

Agreements

Modernization: Provincial

Griffiths Report, 1929. Brewery

cartel and political influence.

Stevens Commission, 1952. Lack

of enforcement, trade practices

issues, monopolies.

Morrow Commission, 1970.

Liberalize liquor policy, allow

advertising, trade practices.

1975. Separation of licensing

and distribution in regulatory

structure.

Modernization: Provincial

✤ 1978. Promotion of BC Wine – policies

introduced.

✤ Jansen Policy Review, 1987. Sampling,

sponsorship, advertising. Responsible

Service.

✤ Surich Policy Review, 1999. Support for

hospitality industry, licensing reform –

focus on public safety.

✤ Privatization, 2002.

✤ Retail & Hospitality changes, 2010.

✤ Yap Policy Review, 2013-14. 74

recommendations.

Modernization: Federal

✤ Interprovincial Shipping

✤ Comeau

✤ Steam Whistle

✤ Federal labeling laws

✤ Trade issues

Benefits for BC Wineries

✤ Tremendous growth in BC wine

industry

✤ Regulatory exemptions:

✤ Direct delivery system

✤ Preferential treatment on LDB

markup

✤ BC-only retail stores

✤ Trade issues, consumer issues

✤ USMCA - Wine in Grocery

✤ USMCA – Alcohol Annex

✤ WTO Challenges

BTAP Review/Report

✤ Business Technical Advisory

Panel and “Hicken Report”,

2018-19.

✤ 24 Recommendations.

✤ Process:

✤ Initial Engagement (22 stakeholder groups, 4 health

orgs., 2 labour orgs., 1 indigenous winery)

✤ Panel Meetings

✤ Report with Recommendations (available on LCLB web site)

BTAP Review/Report

✤ Recommendations:

✤ LDB Distribution

✤ LDB Data Sharing

✤ LDB Governance

✤ LDB Retail Mandate

BTAP Review/Report

✤ Recommendations (cont’d):

✤ Hospitality Price/Discount

✤ Licensee-Licensee Sales

✤ Health & Social Resp.

✤ Manufacturing & Licensing

✤ LCLB Fees

Regulatory Focus

✤ No longer a moral issue

✤ Focus on public safety and

health

✤ Current regulatory directions:

✤ Government revenue

✤ Encourage economic activity

✤ Consider business effects

✤ Address problem consumption

and behaviours

✤ Avoid influence issues

Conclusion

✤ Post-prohibition restrictions were

extensive.

✤ We have come along way. BC

producers obtained exemptions

from regulation.

✤ Plenty of potential changes

ahead.

✤ Further growth of BC food and

wine culture.

Thank You! Questions?

✤ Mark Hicken

✤ Vintage Law Group

✤ @markhicken

✤ T 604 868 1375

E mark@winelaw.ca

W www.winelaw.ca