Monday, March 23, 2015

British Columbia "Chaos Cocktail" Of Liquor Law Changes Will Mean Higher Prices, Squeeze Out Small Business, Says Angry Industry & Critic

Liquor store - price increases with small business squeezed out?
New rules could harm important industry, owners say.

Bill Tieleman’s 24 Hours Vancouver / The Tyee column

Tuesday March 17, 2015

By Bill Tieleman

"We believe that her accusation is propaganda to deflect the possibility that [liquor] price increases are due to the B.C. Government's poor planning, execution and overall lack of industry consultation..." 

- Import Vintners and Spirits Association on B.C. attorney general Suzanne Anton.

The list of those angry with the B.C. Liberal government over dramatic changes to the wine, beer and spirits industry grows longer daily.

And for good reason -- nearly every major player predicts liquor price increases for 5,300 products on April 1 and chaos as the government also runs a "lottery" to allow liquor stores to relocate into supermarkets so they can stock booze next month.

One Licensee Retail Store and pub owner is furious that her prices will have to go up while her business may go down in flames; independent wine stores are frightened they'll be squeezed out of existence; and the organization representing most private liquor stores is unhappy with the government's timeline and lack of consultation.

Price inflation?

But last week B.C. attorney general Suzanne Anton blamed everyone but her government for its problems, including accusing suppliers of inflating 5,300 prices.

"It looks as though some suppliers are hiding behind the government changes on April 1 to raise their own prices. That's not good enough," Anton said.

"We are committed to a level playing field," Anton added.

The industry and opposition vociferously disagreed.

"Everybody in the industry is reading about these changes in the newspapers and they're astounded," David Eby, the B.C. NDP Vancouver-Point Grey MLA and liquor critic said in a Friday interview with The Tyee. "This is a really important industry -- there are a lot of jobs here."

Suzanne Williams is one of many very upset people.

Williams, owner of Sistos Pub and LRS in Mission, worries the combination of price hikes and a looming "lottery" to allow relocation of private and government stores alike into supermarkets may kill her business.

"The pub prices will have to go up again -- that will hurt. For my LRS, some of the prices will go up and if we can't get into the lottery -- well, it may be the end," Williams told me on Friday.

Williams was stunned when the government released the complex details of how the lottery to win the chance to relocate existing private and public liquor stores inside grocery stores -- and gave applicants just four weeks to make a huge decision.

"There's no way we could do it -- I realized that," Williams says. "The whole point was that they didn't want any other stores in the lottery."

"I called and called for months to ask what the rules are -- how is this going to work?" Williams said. "I only found out the details when I printed off the applications forms on Feb. 26 -- the day before the lottery started."

Unfair timeline

"I would have had to have already got a scaled site plan, a grocery story declaration of intent to work with us, photographs of the site, etc. I couldn't do that in four weeks. And you're not advised if your application is incomplete," she said about the demands.

"You would have to have some advance knowledge of what the rules would be to do the planning before the announcement of the lottery," she concludes.
Eby agrees.

"The only people who will be able to take advantage of this LRS lottery are either very rich operators or those who were in the know in advance," he said.

The organization representing most LRS stores -- but not Williams' -- has a different view, saying the lottery itself is fair but not the timeline imposed by the government.

"The process -- we have no concerns. The timeline -- we have problems with," Jeff Guignard, executive director of the Alliance of Beverage Licensees of B.C. (ABLE BC), told The Tyee on Saturday.

"It's pretty inconceivable that you'd make a multimillion dollar decision in four weeks," Guignard said. "We expressed our concerns to the government -- they're not going to delay the timeline."

Guignard says ABLE BC, which represents about 1,000 members, asked the government to give LRS owners six to eight weeks to decide and apply.

And Guignard believes prices will go up.

"I am concerned that consumers are going to pay more for some products," though he notes that most won't be "dramatically higher" on April 1.

Still, Guignard says: "B.C. has some of the highest retail prices in Canada and North America." This column has previously documented that fact.

Eby says the government has already clearly indicated 5,300 products representing about 20 per cent of the alcohol listed in B.C. will go up based on its new wholesale pricing model -- where every liquor store private or government must pay that price to purchase its products, then mark it up for retail sales.

The B.C. government liquor stores won't announce their retail prices -- the benchmark for the private industry -- until March 20, to take effect April 1.

"Even before the retail markup comes in, 5,300 products are going up based on the wholesale price released by the government," Eby told me. "Ask any LRS store operator and they'll say the price has to go up because the margin is too small."

Williams agrees: "Most draft beer will go up based on the prices the government put out. A large number of prices are going to go up -- we won't have a choice either as an LRS or a pub."

Marquis Wine Cellars owner John Clerides rang the alarm bell early, saying back in Nov. 2014 that: "Our ability to employ people and create jobs is in serious jeopardy with this new markup. 
Are they purposefully trying to put us out of business? I don't know but it seems that way."

And Williams has an even scarier view of what will happen to prices from top to bottom after the initial jump.

"This is only the starting price -- they're probably going to raise the prices again in six months when this dies down," Williams said.

Higher prices for North America's already most expensive booze, no consultation with a major industry on dramatic changes, angering key players -- all part of the BC Liberals' liquor chaos cocktail.


BC Schools Seismic Upgrades: It's No Squabble, It's Serious In Earthquake Prone Province

Admiral Seymour School in Vancouver - EricFlexYourHead photo

BC delays to earthquake proofing are totally unacceptable.

Bill Tieleman’s 24 Hours Vancouver / The Tyee column

Tuesday March 10, 2015

By Bill Tieleman

"We learn geology the day after the earthquake." 

          - Ralph Waldo Emerson, American poet, 1803-1882

If a major earthquake hits British Columbia in the next 10 years and kills children in schools that collapse because the provincial government didn't make seismic upgrades a priority, there will be hell to pay.

But for now, it's the BC Liberal government that doesn't want to pay.

Last week it again delayed the completion of $2.2 billion in necessary work required to ensure B.C. schools are safe, extending the previous deadline of 2020 to 2025 to upgrade schools outside of Vancouver.

And for the 69 Vancouver schools deemed to be at high risk of collapse in an earthquake and their thousands of students, the delay for urgently needed upgrades is an extra five years, until 2030.

Feeling lucky, kids? Because it will be 15 years -- more than an entire Kindergarten to Grade 12 school career -- before every dangerous Vancouver school is made safe.

That's totally unacceptable, except to Premier Christy Clark's government.

Amazingly, Education Minister Peter Fassbender delivered this devastating news by blaming the Vancouver School Board for the delays and denying the B.C. government was responsible, even though they supply all the funding.

"The money has been there -- is there -- to do all of the projects in Vancouver. The funding has never been an issue. What has been an issue is the inability of the Vancouver School Board to bring forward good initiatives that are bathed in good science and good engineering," Fassbender told media Friday.

"Bathed in good science?" How about not drinking your own bathwater and getting things done?

'Penny wise, pound foolish' approach

Some news reports claimed "squabbling" between the province and the VSB was the problem, as opposed to the fact that the 2020 deadline set by the BC Liberal government in 2005 won't be met for five more years, and an extra 10 years in Vancouver.

VSB trustee Patti Bacchus said on Sunday that Fassbender's excuses simply don't hold up. "It's a lack of a sense of urgency by the government -- if we all work together, it can be done," she said.

Bacchus, a long-time VSB chair, has been fighting for seismic upgrades since 2002. 

She became a member of Families for School Seismic Safety long before being elected a trustee after seeing the horrifying results of a 2002 earthquake in Italy that killed 26 students when their school collapsed. At that time, her own children were in Vancouver schools.

She disagreed that the VSB's concerns with the B.C. government's approach are causing delays. "When did advocacy become 'squabbling'?" she asked.

Bacchus said the B.C. government "wants to spend as little as they can" and hasn't made seismic upgrading a priority while continuously "changing the rules to make it harder, not easier." 

She said the government approach has been to repair one school at a time, which delays quick progress.

Back in 2004, Dr. John Blatherwick, then chief medical health officer for the Vancouver Coastal Health Authority, urged the B.C. government to act quickly, but to no avail.

"These are very old schools, and at some point in time we have to bite the bullet, and what we're doing is like so many things. We're saying, 'Yes, we could do that, but right now we'll build Olympic skating ovals over doing the schools,'" Blatherwick said at the time.

Bacchus hopes that a new seismic upgrade project office set up by the VSB and B.C. government will help get projects underway more quickly. The board has been asking for the office since 2001, she said, and the province finally agreed to it in August 2014.

VSB Chair Christopher Richardson, a right-of-centre Non-Partisan Association trustee, is also not happy about the delays.

"I think we have to get on with it, because it would be tragic if anyone was hurt because we're not done," Richardson said after hearing the deadline was being pushed back up to 10 years in Vancouver.

Fassbender said that the VSB has demonstrated an "inability to bring forward project definitions that meet its requirements."

But Bacchus rejects that claim, saying that the B.C. government has shown a "penny wise, pound foolish" approach to funding in the province. The VSB has pointed out that in many cases building a new school makes more sense than seismically repairing an old school for almost as much money, she said.

"Should we be spending hundreds of millions of dollars for upgrading and then have to spend millions more to repair them if we have an earthquake? Is that really a wise decision?" Bacchus asked.

Why not replace schools?

The enormous costs of seismic upgrades still leaves old schools with the same aging classrooms, electrical and plumbing systems, and that doesn't make sense when in some cases a new school only costs a little more and will give taxpayers far more value for years ahead, Bacchus said.

The VSB's 2013-14 Capital Plan cites a consultants' report that shows of 48 outstanding seismic projects, the costs of earthquake-proofing only would be $618 million, seismic plus other upgrades would be $1,085 million, and replacing those same schools with new buildings would be $857 million -- with significant longterm advantages to having new schools.

Twenty seismic upgrades worth about $218 million have been completed to date, according to the Ministry of Education.

Fassbender has also said that the VSB is to blame for not agreeing to move students across Vancouver into other schools while their home schools are repaired, instead demanding that portable classrooms be used at B.C. government expense.

Bacchus disputes that. 

"It's really difficult to split school and families' students up," she said, adding that some VSB existing portables can and will be used.
We've never said we won't do it, but in many cases it's not feasible," Bacchus said. "They want us to do the cheapest possible upgrade, no matter what."


Let's hope Premier Clark, whose own son attends a posh Vancouver private school, will not tolerate a 10-year delay in seismically upgrading the city's public schools.

While running for re-election in April 2013, she claimed it was a priority at an event at Lord Tennyson Elementary.

"Absolutely nothing is more important than keeping our kids safe. Today we're two-thirds of the way to meeting our commitment to seismically upgrading all high-risk schools in B.C.," Clark said at the time. "This investment means parents sending their kids to 45 more high-risk schools know they will be able to withstand a major earthquake."

But since then, well, things have changed for the worse.

It's easy to put off spending money to earthquake-proof schools now, but when the inevitable and predicted big shaker happens, parents will want to know why a $653-million new roof on BC Place and a host of other big expenses were a priority.

Should it be a surprise that B.C., with Canada's worst record on child poverty for most of the past decade, is equally negligent on protecting their students in schools from earthquakes?

Perhaps not. But it's a question worth asking.

Regardless, there's a special place in hell for politicians who don't protect our children. 

Let's not find out exactly where that is the hard way. 


Wednesday, March 11, 2015

Price Increases With BC Government Liquor Law Changes Threaten Lucrative $1 Billion BC Wine Sector

Part of the $1 billion wine industry in BC being poured at the great 2015 Vancouver International Wine Festival - Bill Tieleman photo 
Consumers and $1-billion industry is growing 'very very nervous.'

Bill Tieleman’s 24 Hours Vancouver / The Tyee column

Tuesday March 3, 2015

By Bill Tieleman

"If the price goes up one penny from what it is now, all hell is going to break loose."

- Bill Eggert, Fairview Cellars winery owner, Oliver, B.C.

There was just one black cloud on the sunny horizon as 25,000 people attended Vancouver International Wine Festival events last week, but it was huge: Why is the British Columbia government threatening the $1 billion wine industry?

Astonishingly, that's exactly what's happening.

Just as this province hit an enormous milestone, with wine sales topping the $1 billion mark for the first time ever, changes to wine, beer and liquor pricing coming April 1 seem to guarantee that "all hell is going to break loose."

The BC Liberal government's endless and incompetent meddling with the liquor industry will lurch forward towards potential price increases for both wines from provincial wineries and those imported from France, Italy, the United States, Spain and many more countries -- on April 1.

Even worse for winery owners, private and public liquor stores, wine agents and restaurants -- the government is keeping its retail pricing plans mostly a secret deeper and darker than a bottle of old vines Zinfandel.

And it has also introduced a relocation "lottery" to decide how and who gets to move existing private liquor stores into supermarkets -- for potentially huge profits.

All this uncertainty is happening even as an international study concludes that Canada is the seventh-largest wine consumer in the world, with a market valued at US$6.1 billion. And Canada is now the sixth-largest wine importer globally.

But that's all at risk as liquor industry sources tell The Tyee that wine prices are almost bound to go up -- despite already being the highest in North America and despite the government's partial retreat on pricing connected to its controversial move to a single wholesale price for all retailers, including B.C. Liquor Stores.

Stores will suffer

And an analysis of available information by wine lawyer Mark Hicken indicates that both government liquor and independent wine stores will suffer.

Hicken wrote that one of the predicted effects on Independent Wine Stores (IWS) and government stores is that independent stores "will have to raise their prices as their wholesale prices will go up significantly for every price point. The government has indicated that end consumer prices in government stores will stay the same," Hicken wrote on his website Feb. 15.

"However, for this to be achieved, the government stores would have to stick to a margin of 15-16 per cent for wines above about $20. As noted above, this margin is below their declared operating costs and it would mean that the stores would lose money on these sales."

And Hicken says the result could be that B.C. Liquor Stores will cut the number of wines they carry that are priced over $20 to avoid losing money.

"It is possible that government stores may seek to shift their product mix to lower price points in order to create sustainable margins," he concludes.

In other words -- the new B.C. government imposed system means higher prices and lower selection are likely -- and that amazingly, stores could actually lose money selling more expensive wine!

Only in B.C., you say?

Some prices rise

Hicken thinks it's possible the very cheapest wines sold in Licensee Retail Stores -- more commonly called cold beer and wine stores -- might go down slightly in price but that wines over $20 will go up because wholesale prices will increase, so their prices may not change much overall.

Left out in the cold are 12 independent wine stores that are seeing the most dramatic change in pricing -- which they say threatens their very existence -- without being given the chance to sell beer or spirits or sell wine to restaurants to compensate for the new structure.

And restaurants, hotels and bars are also disadvantaged, as they still have to pay the full retail price for wine, beer and liquor despite selling significant volumes. That also means their prices will likely rise considerably.

Licensee Retail Stores are also unhappy, because the BC Liberal plan will allow government stores to stay open Sundays and install refrigeration to compete with private stores.

It's a mess -- and Attorney General Suzanne Anton is behind it all.

Anton's intent on Jan. 30 when she cut by 40 per cent a previously announced 67 per cent markup for wine was an effort to quell strong opposition to her plans and "to better align the new wholesale prices with the prices the industry sees today."

"Our wholesale pricing model is not intended to increase government revenue or retail prices. Rather, the model is designed to generate approximately the same amount of government revenue from each product category as we receive today," Anton said in a release.

But the reality is likely very far from Anton's stated goals.

And the uncertainty and fear created by her clumsy moves is making a $1 billion industry -- and the growing number of B.C. wine drinkers who have built it -- very, very nervous.


Wednesday, March 04, 2015

Nestle Pays $2.25 to Bottle and Sell a Million Litres of BC Water!

I repeat: Nestle pays $2.25 to bottle and sell a million litres of BC water.

This 24-pack costs more than the BC government fee for 1 million liters of water supplied to Nestle to bottle! 

Bill Tieleman's 24 Hours Vancouver / The Tyee column

Tuesday February 24, 2015

By Bill Tieleman

"The marketers can compete with free; it just has to be better. Look at bottled water if you don't believe me." 

Have you ever paid $2.25 for a bottle of water? Of course, and you can pay a lot more than that if you go to a Vancouver Canucks game, a concert, movie theatre or restaurant.

So what if you could pay $2.25 not for a 500-millilitre bottle, not for a big office cooler full, but for 1 million litres of water?

Sounds ridiculous given the retail price, but that's the unbelievably low rate the BC Liberal government has given to giant multinational firm Nestle and others to extract fresh, clean groundwater to bottle and sell for exorbitant profits.

The price is so outrageous I have to repeat it. Nestle Waters Canada pays the province just $2.25 for every million litres of water. 

The total estimated price of all the water Nestle will bottle in B.C. over an entire year is -- wait for it -- $562 a year!

That's an improvement, if you can believe it, because until recently they got it all for free.

It must be nice to have an endless supply of potable water, where you can take as much as you like, sell it for an enormous profit, and pay a pittance for its use.

A bottled drinker repents

Unfortunately, I must confess a terrible sin: I drink bottled water regularly, and mostly Nestle products. I pay about 50 cents a bottle. 

I know I should be drinking tap water in the metal refillable container that is currently gathering dust on a shelf in my house, but it's so darn convenient to throw multiple bottles of Nestle water in my office and home fridges and pop them in my car when I head out.

Don't bother lecturing me -- at least I'm drinking healthy water and hydrating myself -- but this farce makes me rethink my willingness to line their pockets.

I feel apologetic, but Nestle doesn't.

"We're investing millions of dollars in that plant. We employ 75 people [and] we pay millions of dollars in taxes," said Nestle spokesman John Challinor in 2013.

Cry me a river. And at $2.25 per million litres, they can bloody well afford it.

Challinor did add that Nestle is willing to pay for the resource -- so long as everybody else does. 

I say it's time to put a serious smart metre on the bottled water tap and make Nestle and other water companies really pay.