Media Releases

September 9, 2015 – I feel that it’s time to send a message to clarify the answers to many of the questions being voiced by members and industry regarding wine in grocery and the steps being taken by the BCWI Board.

Below are a list of questions heard from our members, along with answers summarizing our actions taken to date and providing you with what our future actions will be. I welcome any and all feedback and would like to take this opportunity to thank the other members of the BCWI Board in helping to guide us through this important period in our industry.

Q: Did the BCWI advocate for wine in grocery?

A: No. This came about following the BC Liquor Policy Review that recommended that government respond to calls for convenience by consumers and allow for liquor sales in grocery stores. Government accepted John Yap’s recommendations and, subsequently, BCWI’s input to implement a two-part model.

First, the “store-within-a-store” model – private liquor licences that are relocated within or sold to a grocery store, as well as government liquor licences that are relocated within grocery stores.

The second model – “in-aisle” or off designated shelves – is flexible to accommodate BC VQA licences, as well as a limited number of new licences (Bill 22) that will sell 100% BC wine.

Q: Does the BCWI support the sale of 100% BC Wine in-aisle in BC Grocery stores?

A: Yes, but only with strict rules in place guaranteeing fair and equitable shelf access to all producers of 100% BC wine, and per LCLB requirements.

Q: Is the BCWI abandoning its chain of BC VQA Wine Stores?

A: No. The recent BC LDB regulatory reforms and changes require us to update our operating agreement to reflect the fundamental changes to provincial liquor distribution and to adapt to the Grocery Sales Channel.

The principles guiding these changes include the objective of maximizing the sale of BC VQA wines through the BCWI licences for the benefit of our producers and operators, maintaining and enhancing the high quality reputation of BC VQA wines, and securing fair and equitable access to this unique sales channel by putting them on an equal footing with the Bill 22 licences.

For some existing operators the value of their businesses will be maximized through a sale to a grocery operator; for others, it will be maximized by continuing to operate independently under the soon-to-be-implemented revised operating agreement.

Q: Why did the stores not transition to wholesale price when government mandated one wholesale price, and all the other retailers switched on April 1? Or when the licences moved to grocery operators?

A: Initially it was felt that it was important to maintain the previous commission structure for the BC VQA wine stores and for grocery to operate under the same agreement. Moving forward, the new operating agreement will be based on the wholesale price structure, COD, etc. as applies currently to all other retail channels, with existing and future grocery to comply ASAP. Existing independent operators will receive generous notice of future changes to facilitate their transitioning.

Q: Did the BCWI advocate for the introduction of additional in-aisle wine in grocery auctioned licences as proposed in Bill 22?

A: No. The BCWI for some time advocated to the provincial government that a number of industry-controlled licences existed and should be made available to industry. Despite BCWI objections, government has chosen to auction off these licences directly to grocery (presumably for the revenue), with the BCWI insisting they operate under the same fair and equitable access rules of our BC VQA wine store operating agreement.

Q: Are in-aisle wine in grocery licences trade compliant or is there a risk of a trade challenge via NAFTA or other trade agreement?

A: The BCWI supports government’s contention, supported by legal opinions, that any trade challenges would be unsuccessful because existing trade agreements protect domestic product. It is about the number of licences, not control, for domestic only products and government plans fall well within the maximum.

Q: Will BCWI BC VQA wine stores in grocery evolve to the point where BCWI members will be squeezed off shelves in favour of low-priced wines?

A: No. The BCWI will continue to operate according to its mandate to promote and create demand for BC VQA wines and ensuring that super-premium price points are achieved and maintained. It is in any store operator’s best interests to premiumize wine sales to maximize revenues; with the BCWI continuing to work with all operators to ensure this is the case, and BCWI will take measures (up to and including non-renewal of operating agreements) if members’ interests are not being met.

Q: When the auction of Bill 22 in-aisle wine in grocery licences takes place will the existing BC VQA stores be rendered uncompetitive and hence not viable?

A: Potentially. While the BCWI continues to advocate to government that our store operating agreements be aligned with any future Bill 22 licences, allowing the same product selection and business terms, there is no guarantee they will fully comply. We have been told that government is anxious to see how we manage the transition to grocery and hence the urgency to update our operating agreement.

Q: Is the BCWI doing battle with private retailers (i.e. LRS stores)?

A: No. The BCWI values the strong relationships developed over many years with all re-sellers of BC VQA wines. For our member wineries to achieve success BC VQA wines must be available wherever wine can be sold. The BCWI will continue to work with and support ALL sales outlets to deliver the consistent message that BC wines are amongst the best in the world.

Q: Is the BCWI only interested in working with Overwaitea Food Group to operate a BCWI BC VQA wine store licence?

A: No. We are open to working with any eligible grocery partner(s) and have had enquiries of interest from Whole Foods, IGA, Loblaws and a number of independent grocers. To date, only Overwaitea has successfully negotiated the purchase of an existing operator’s business, submitted a proposal and been approved to operate a BC VQA wine store licence.

Should you have further questions, please contact me at Shaun@tinhorn.com.