The Evolution of BC Liquor Laws

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1 The Evolution of BC Liquor Laws Legal Issues Affecting the BC Wine Industry Mark Hicken, Vintage Law Group November Penticton, BC

2 Introduction Liquor Regulation in BC - Have to Trace Back to Prohibition Uniquely North American Approach. Very Different from Europe.

3 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

4 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

5 Effects: Retail Distribution Tightly restricted retail system Limited access to other Canadian markets (interprovincial shipping) No conventional wholesale discount system

6 Effects: Hospitality Industry Restaurants/Bars Strange rules over the decades Food/liquor Entertainment Operations Zero wholesale discount

7 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

8 Effects: Trade Regulation Pricing & Inducements Tied House Rules Advertising & Promotions

9 Effects: Wine Culture Tasting Event Rules Off-Site Tasting Rooms Farmers Market Tastings Picnics Special Occasion Permits Caterers

10 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

11 Modernization: Provincial Griffiths Report, Brewery cartel and political influence. Stevens Commission, Lack of enforcement, trade practices issues, monopolies. Morrow Commission, Liberalize liquor policy, allow advertising, trade practices Separation of licensing and distribution in regulatory structure.

12 Modernization: Provincial Promotion of BC Wine policies introduced. Jansen Policy Review, Sampling, sponsorship, advertising. Responsible Service. Surich Policy Review, Support for hospitality industry, licensing reform focus on public safety. Privatization, Retail & Hospitality changes, Yap Policy Review, recommendations.

13 Modernization: Federal Interprovincial Shipping Comeau Steam Whistle Federal labeling laws Trade issues

14 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

15 BTAP Review/Report Business Technical Advisory Panel and Hicken Report, 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)

16 BTAP Review/Report Recommendations: LDB Distribution LDB Data Sharing LDB Governance LDB Retail Mandate

17 BTAP Review/Report Recommendations (cont d): Hospitality Price/Discount Licensee-Licensee Sales Health & Social Resp. Manufacturing & Licensing LCLB Fees

18 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

19 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.

20 Thank You! Questions? Mark Hicken Vintage Law T E mark@winelaw.ca W

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