Wednesday, July 22, 2015

Supermarkets Win Big in BC's New Liquor Landscape - Higher Wine, Beer and Spirits Prices, Lower Service, Less Selection Ahead

Supermarkets will end up running BC's liquor business in the long run
'Machiavellian' plan could harm union and non-union liquor workers.

Bill Tieleman’s 24 Hours Vancouver / The Tyee column

Tuesday March 24, 2015

By Bill Tieleman

"If you can't spot the sucker in your first half hour at the table, then you are the sucker."

Rounders poker movie, 1998.

Forget about alleged BC Liberal government "incompetence" handling impending April 1 liquor price increases, Sunday openings for government stores or anything else. It's all a red herring.

There is only one fundamental shift coming in B.C liquor policy and it is enormous, replacing the existing system of public and private beer, wine and spirits stores with a near-monopoly for supermarkets.

There is no real incompetence -- it's simply a distraction to fool the suckers.

What does exist is a Machiavellian plan to eventually wipe out most private and publicly owned liquor stores and move the majority of booze sales to grocery stores.

The BC Liberals are picking winners and losers with its policies, which are far from free enterprise -- since the "competition" is government-controlled.

And the benefits the B.C. government gets are huge: continue to reap windfall profits from North America's highest liquor prices while jettisoning unionized labour costs in government stores and the troublesome patchwork quilt of small private stores.

The strategy is cunning and deceptive, with an allegedly consumer-friendly face promising "convenience" while increasing government profits and making sure the suckers -- the customers paying far too much per bottle already -- even thank you for it!

BC Liberal attorney general Suzanne Anton announced the changes in March 2014 as part of the government's "modernization" of liquor laws.

Supermarkets win

After recent talks with a wide range of people from private and government stores, liquor import agents, restaurants and bars and other players, the realization is sinking in that the only true winners are the ones not yet sitting at the table -- supermarkets.

But they are about to be dealt a winning hand by government and the pot is huge -- B.C. Liquor Distribution Branch sales net the province $1.2 billion -- on gross sales of about $3 billion.

And wine sales alone in B.C. passed the $1 billion mark in 2014.

Not all in the industry are ready to speak on the record but Jeff Guignard, executive director of the Alliance of Beverage Licensees of B.C., was.

"If supermarkets get a full suite of products, it's private stores and government stores that will suffer -- that will lose sales," Guignard said in an interview with The Tyee in mid-March. "Sixty-five to 70 per cent of wines in open markets get sold in grocery stores."

Guignard predicts that supermarket liquor stores will trigger a clash between remaining private and public outlets.

"Then government stores will fight harder against the private stores," he says. "But private stores employ 10,000 people -- why would you put that at risk?"

The government offers two models for grocery store sales -- buy an existing private or public liquor store and relocate within the supermarket or sell only B.C. wines on existing supermarket shelves.

But that latter plan is already under siege by winemakers in other countries like the United States, who say it violates several trade agreements.

Guignard has no doubt foreign wineries will win.

"There will be huge pressure to open grocery stores to all wines -- not just B.C. wines," he told me. "Ultimately, less B.C. wine will be sold, not more."

Prices to rise

That's because the big wineries and their agents will demand supermarkets give them premium shelf space, promotional deals, advertising and other marketing advantages that a small B.C. winery simply can't offer. And with French, American, Italian, Spanish and other big wine producers enjoying huge economies of scale, B.C. wines will cost more.

The union representing government liquor store workers actually applauded the new BC Liberal policies, including allowing government stores to open on Sundays, have longer hours and sell cold beer and wine -- all of which will hurt private store sales.

But B.C. Government and Service Employees Union members' jobs are not really secure beyond the expiry dateof their current contract in 2019.

And government stores' ability to compete with supermarkets while paying workers considerably more in wages and benefits than grocery store clerks make is questionable at best, given that B.C. is implementing a single wholesale price for all stores as of April 1. 

Previously there were separate discounted wholesale prices for different private liquor store categories but now there's just one -- and public stores are being told to compete or close.

The supermarkets are gearing up -- food giant Loblaws has lobbyists registered on liquor issues and others are likely to follow.

Just like the "incompetence" of BC Liberal government "Happy Hour" changes that actually increased drink prices -- and helped big bar chains compete with small independent pubs, this move reeks of calculated risk.

None of it will happen overnight -- that would be too obvious, too dangerous. It will take place over a few years.

And there is still a chance the BC Liberals will bail out at the last moment, as they did after promising complete privatization in 2002. Back then, the government reneged after many LRS owners and investors spent serious money preparing to see government liquor stores closed and their own stores expand or new ones established.

Then-finance minister Gary Collins and then-premier Gordon Campbell got cold feet when they saw big risks to the government's liquor sales revenue stream after the BC Liberals' vaunted 25 per cent income tax cut blew a giant hole in the budget and forced a 0.5 per cent sales tax increase to compensate. Risking a big dip in liquor income just to keep a political promise was too big a stake then.

This time, the only outside chance of public and small private stores surviving this game is if consumers get wise to being played for suckers -- to protest the coming higher prices, smaller selection from fewer suppliers and reduced service.

But the BC Liberals, just like governments in other jurisdictions, believe that you won't care that you are paying several dollars more for the convenience of buying beer, wine and spirits in your local grocery store.

Or that if you do notice, you'll just sigh and have another drink rather than do anything about it.


Sunday, July 19, 2015

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

Vancouver International Wine Festival 2015 - 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 WineLaw.ca 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.

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Friday, April 17, 2015

Happy Malbec World Day! Celebrate April 17 with a Malbec from Argentina, France, BC or anywhere!

Today is Malbec World Day - a day to celebrate the Malbec grape that makes delicious wines in countries around the globe.

But it is Argentina that invented Malbec World Day to help promote its flagship varietal, a grape that thrives in South America.

There are many good and great Malbecs available in British Columbia - pick one out for tonight's meal or just a glass.

Personally, I'm going to open one of my favourites - the 2011 Vina Cobos Bramare Malbec from the Lujan de Cuyo appellation.  It is rated 91 points by the Wine Spectator and 90 by Robert Parker.

And it is a premium wine - BC Liquor Stores sell it for $39.19 before taxes - so about $45.  There are 370 bottles available in 30 stores across BC and you may also find it in private wine stores.

Cinnamon and smoke, cassis and cherry, blueberry - loads of flavour!

It is a fantastic wine and if you try it I believe you will completely agree with me that it is special.

But you can celebrate Malbec World Day with much more modestly priced Malbecs and still be very happy indeed.  

Norton's Malbec Reserva 2011 from Mendoza in Argentina is still in some BC Liquor Stores and on sale for $15.69 plus taxes - about $20 and is on the Wine Spectator's Top 100 Wines of 2013 - ranked 92 points!  And if the 2012 is on the shelf, it's rated 90 points - so you're still doing really well.

Malbec is to me the quintessential steak wine - but it is very flexible and goes with many foods - meat or vegetarian.

So crack open a Malbec and celebrate - tonight or anytime!

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Saturday, February 28, 2015

Must-visit tables at the Vancouver International Wine Festival this afternoon and tonight - Saturday

This represents less than a half-hour's worth of wine to taste at the VIWF!
Okay - it's the last day of one of North America's biggest and best consumer's wine event - the Vancouver International Wine Festival - and you're going!  

So what are you going to consume?

The theme is Australia - so lots of wineries are here that don't ordinarily make it to our shores.

But there are some countries who have really brought their best game - and best wines - so you don't want to go Aussie-only.

And there's only 2 hours in the afternoon tasting or 3 hours in the evening to taste wines: that means you have to be super strategic - and that's where the Wine Barbarian comes in!

I have been attending events all week - not that I've visited anywhere near all the 170 wineries or tasted the 750+ wines at the International tastings - but I've made a good try!

So here are some of my must-visit tables and wines - with no offence to any winery that I did or did not visit previously - and I'll be there tonight to find new gems, so follow me on Twitter at @BillTieleman and check the hashtag #VIWF to see what my colleagues and other consumers are drinking and raving about.

Meanwhile, don't miss these - and make sure you realize that the Australia section is organized by region, NOT alphabetical:

Inland Trading Co:  Greg Corra, Managing Director, is a regular at VIWF and always brings the best from Barrossa Valley - but he has outdone himself this year!  The most expensive wine in the room is also perhaps the most delicious - Greenock Creek Roennfeldt Road Shiraz 2005 - at at stunning $429 a bottle.  You read that right and it's being poured for the people - most impressive.  
Greenock Creek 2005 Shiraz

Ranked at 98 points by Robert Parker, saying: "It presents and incredible array of pronounced spice, earth, floral and savory aromas: blackberry preserves, dried mulberries, coffee, grilled duck, vanilla, cloves, fenugreek, violets and dried rose petals plus some shavings of dark chocolate."  

I didn't get all that but I did get bloody marvellous!  And that's after you taste the remarkably good Charles Cimicky Trumps Shiraz 2012 for just $24 - a bargain - and the 3 Rings Shiraz 2012 which is even more affordable at $20.

But Greg also brought another showstopper to the table - his Jasper Hill Shiraz 2012 at $100 a bottle - stunningly good.  That makes this the place to visit.  And Inland Trading also has another awesome Greenock Creek Shiraz - the Apricot Block - at the Epicurious Table along with a Charles Cimicky Autograph Shiraz that's delicious and a Phillip Shaw No. 11 Chardonnay and The Conductor Merlot nearby that you will enjoy.

Damilano - from Piedmont, Italy has brought not one but four great Barolos to taste - and three of them are $95 each!  All beautiful and different - plus a Moscato d'Asti 2013.  Whether you prefer the Brunate - my fave - or the Cannubi or the Cerequio or the Lecinquevigne, you will have to admit they are each fantastic!


Three of Damilano's great Barolos.
Silver Oak Cellars/Twomey Cellars - from Napa Valley has also a real treat - not one but two of California's most highly regarded Cabernet Sauvignons - the Silver Oak Alexander Valley 2010 and the Napa Valley 2009 - both delicious.  In addition, try the Twomey Sauvignon Blanc 2013 and Merlot 2010 - you won't be disappointed at this table!

Savour Australia - BC Liquor Stores special table - what a one-stop shop this is - all rare Aussie wines that are only here for the show - and not to be missed!  When my friend David Hopgood - the former buyer for the Liquor Stores and now a consultant - says go there, I do - and thank goodness!  There are 11 fabulous whites and reds that you must taste - from a great Bellwether Chardonnay 2011 at $43 from Tasmania to a Bindi Kostas Rind Chardonnay 2013 from the Macedon Ranges area that reminds of Chablis to a beautiful Moorooduc Robinson Pinot Noir 2012 from Mornington that simply stuns at $50 to a huge, jammy, giant Jamsheed Garden Gully Shiraz 2013 from the Great Western region of Central Victoria - you will be mightily impressed!  And head to the onsite store quickly to get any. 

Penfolds - the big boy of Aussie wines does not disappoint - particularly try their Bin 389 Cabernet Shiraz 2010 at $70 and their Bin 128 Coonawarra Shiraz 2010 - one of my favourites at $40. 

Stina - it means stone and they come from the island of Brac in Croatia!  Four fascinating wines all well worth tasting - from the Posip 2013 white at $50 to the Plavac Mail Majstor 2010 red at $60 and the Plavac Mail Barrique 2010 at $45 to a unique Prosek 2011 dessert wine blend at $100 they are all delicious.  And what a great opportunity to taste a wine you've likely never encountered before.

Canada is well represented and brought some fine wines too.  Make sure to visit the Okanagan's Painted Rock Estate Winery - the Red Icon 2012 especially at $55; Cassini Cellars with The Godfather at $70 commanding your attention; Laughing Stock with its always great Portfolio 2012 at $45 and Poplar Grove with its Legacy at $50, plus many others from BC.

Duckhorn - some more great wines from Napa Valley - especially their Goldeneye Anderson Valley Pinot Noir 2011 - but a great table all round.

Signorello - almost a BC wine because Ray Signorello Jr. is partly from West Vancouver.  Their Cabernet Sauvignon 2012 is smooth and great at $98; the Vieille Vignes Chardonnay 2013 is balanced and beautiful and the Seta 2013 Semillon/Sauvignon Blanc is always great.

Well - time is up for me but as I said, check my Tweets out on Twitter @BillTieleman and the #VIWF Twitter hashtag for even more tips today and tonight!  

Hope to see you there tonight - say hi if you spot me!

Cheers - Bill Tieleman, the Wine Barbarian


Bill Tieleman - the Wine Barbarian - at Romanee-Conti in Burgundy





Still a few Saturday Vancouver International Wine Festival events with tickets left for Saturday afternoon - don't miss out!

The Table of Temptation - for me - Damilano brought three $95  delicious Barolos for you to taste!    
It's Saturday - and if you don't act fast, the Vancouver International Wine Festival will be history for 2015!

But amazingly, there are still 3 excellent opportunities this afternoon to have a few glasses of the best wines in the world - especially from Australia.

Saturday afternoon's International Wine Tasting from 3 to 5 p.m. is still available - two hours of tasting the best wines from around the world for just $68 - so get online or on the phone to 604-873-3311 to buy your tickets.


Friday's Montes: 25 Years and Beyond wines seminar with winemaker Aurelio Montes, right, and host David Scholefield, left.
And there's a McLaren Vale Scarce Earth seminar for $55 at 5:15 to 6:45 p.m. or at the same time a Mod Oz seminar for $45.  Both sound great - the first on the famed McLaren Vale area of Australia and its wines; the second on modern Australian winemaking techniques - and the tasty results.

The Festival has been great - loads of fantastic wines from Australia and many other countries, informative seminars where you drink and learn - and you would be remiss to not take this last chance to find out for yourself!

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