Provincial roundup

Provincial roundup B.C. and Alberta

Prairies

Big brewers take on Connect

SHHA demands lower liquor prices

Molson Canada, Labatt Brewing Co. Ltd. and Sleeman Breweries Ltd, are suing the Alberta Gaming and Liquor Commission and Connect Logistics Services Inc. for more than $1.5 million, according to a report by The Canadian Press. They argue that Alberta’s liquor distribution practices interfere with their customer’s ability to get the product.

“Consumers weren’t getting their product, we were losing sales. Retailers weren’t getting their product, they were losing sales,” Greg d’Avion, spokesman for the three breweries, told CBC News. “It’s just something that should not have happened … We’ve been left with no alternative but to seek a remedy through the courts for this matter.”

According to the claim, the AGLC requires all liquor suppliers to ship and store their products in a warehouse, which at this time was operated by Connect. The distributor then arranges the shipment and distribution of liquor to the licensees – the breweries must adhere to this method of warehousing.

The lawsuit accuses Connect, the liquor commission’s distributor for wine, spirits, coolers and imported beers, hasn’t been able to meet the sales demands of the plaintiffs.

The claim further alleges Connect couldn’t handle the shipment sizes from the three breweries, which forced them to pay extra fees because its shippers couldn’t deliver product on schedule.

Bar owners tackle problem consumers

A group of bar owners in Victoria has implemented a computer-based tracking system designed to control problem consumers, following a government threat to increase business license fees if the problem isn’t addressed.

Victoria city councilors looked to increase fees in order to alleviate the high cost of policing required for liquor-primary establishments. However, councillors decided to wait upon learning about the bars’ selfimplemented computer-based tracking system.

The trial period has been granted for the system, called Barwatch, in which TreoScope uses the magnetic stripe on the back of B.C. government issued I.D. as a tracking device.

Problem patrons will have their cards swiped upon ejection informing other bars of the potential disruption this person can cause.

Therefore, if the same customer tries to enter another bar later, he or she may be refused access.

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The Saskatchewan Hotels and Hospitality Association (SHHA) is urging the provincial government to lower the price off-sale stores pay for alcohol.

The government is currently considering a request by SHHA to purchase liquor at the wholesale price, and not retail prices as they are currently.

“We buy from the government stores and it’s the same price that consumers buy it for,” said Tom Mullin, president and CEO of SHHA, in a report by Regina Leader-Post.

“We’ve always been buying retail and we’re interested in a better pricing scenario that would see retailers purchase all the products at the same wholesale price, then compete on the open market.”

Dan D’Autremont, minster for the Saskatchewan Liquor and Gaming Authority, made very clear that the consideration is by

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no means an affirmative response. “The starting premise for us as government is that we’re not taking less money. After that we’re prepared to listen to the proposals and consider them, but that doesn’t necessarily mean we’re changing anything,” he said.

Mullin insists that the 15 to 20 per cent increase in cost when purchasing liquor at an off-sale store is due to the acquisition of products at retail price. He states that the SHHA is not interested in privatization as in Alberta, but does want a better pricing system.

City liquor tax may break law

A proposed new set of taxes by Thompson city council, including a two per cent surcharge on all alcohol sold in the city, may conflict with the Manitoba Liquor Control Commission, which requires that the price of alcohol at every government-run liquor outlet

We’ve been left with no alternative but to seek a remedy through the courts for this matter

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Fall rare whiskey, wine promotion

BC Liquor stores has launched a rare whisky promotion this fall featuring 50 products from countries including Scotland, Ireland, Wales, Canada and the United States.

The following is a sampling of what is available with the lowest and highest price points included: Potter’s 15 years plus Century Reserve ($28.75); Eagle Rare Single Barrel 10 year old ($73.00); Penderyn Peated Cask ($135.00); Balvenie 21 year old Port Wood ($159.99); Chivas Regal 25 year old ($321.95); Bowmore Black 1964 ($4,499.99).

Just one week after the premium whiskey release, the Best of BC Fall 2008 wines go on sale at Signature and select BC Liquor Stores.

The following list exemplifies what will be offered inclusive of lowest and highest price points: Burrowing Owl Pinot Gris 2007 ($19.91); Sandhill Small Lots Petit Verdot 2005 ($29.99); Red Rooster Reserve Merlot 2006 ($34.99); Mission Hill Oculus 2005 ($70.00); Mission Hill Oculus 2004 ($175.00); Osoyoos Larose La Grand Vin 2005 ($190.00).

B.C. and Alberta Prairies

Provincial roundup Ontario and Quebec across the province be identical.

“The City of Thompson has looked at different options... to deal with the issues we face,” Mayor Tim Johnston told the Winnipeg Free Press. “This is one of those options that council has considered, and we’re taking the final steps to adoption.”

Although Johnston acknowledges that the tax possibly contradicts provincial law in the Liquor Control Act, he also notes that provincial law allows municipalities to pass local taxes. He argues that the new taxes will allow the community to raise money for infrastructure upgrades and rising costs related to policing and social services, without having to increase property taxes.

The new taxes are opposed by business groups and local residents. Even if the taxes, expected to generate $716,000 annually, are finalized by the city, the province will have to supply the final approval.

Wine education gets boost

As part of a $50 million campus redevelopment project, Niagara College has announced the construction of a Wine Education Centre at Niagara-on-the-Lake Campus set to open in August 2009.

“Our campus plans and investments are designed to help our region meet the challenges that come with a changing economy and an urgent need for highly skilled workers,” said Niagara College president Dan Petterson.

The $3.2 million Wine Education Centre intends to integrate academic programming, facilities for the unique Niagara College Teaching Winery and an educational centre for students, industry and visitors. The 8,525 square feet centre includes classrooms, labs, visitor information, tasting counter, retail space, interactive displays about Ontario wine, seminar rooms, wine production space, and a barrel cellar.

In the retail wing at 2,000 square feet, wineries will be able to set up on a rotating basis and offer samples to visitors. Here, visitors will learn about grape growing, icewine, Vitners Quality Alliance and wines made from 100 per cent Ontario grapes.

With 7,500 full-time students, Niagara College offers more than 90 diploma and advanced level programs at campuses in Welland, Niagara-on-the-Lake, Niagara Falls and St. Catharines. The College is also home to the globally recognized Niagara Culinary Institute and to Canada’s first commercial teaching winery.

Ontario grape price increase

Atlantic Canada

Ontario and Quebec

The Grape Growers of Ontario has won an ongoing dispute with the Wine Council of Ontario over the price of grapes, according to a recent newspaper report, resulting in the overall increase of grape prices by one per cent.

“Certainly, it’s positive,” said Grape Growers of Ontario chairman Bill George, in the St. Catherines Standard. “We have gone through a very expensive growing season, as well as our cost of production, whether it be fuel, (disease) spray or any other materials and labour have gone up. To hold the line on pricing, I think, was a positive thing.”

Although most grape varieties will maintain the same prices as last year, the decision represents a continuum of three years of steady price increase for the Wine Council who asked for an overall price decrease of about three per cent.

The Grape Growers argued that there

were enough grapes in Ontario to meet demand while the Wine Council saw the waste of several tonnes of grapes without any buyers. For example, grapes such as Cabernet Sauvignon, Merlot, Cabernet Franc and Chardonnay were among the varieties in “oversupply.”

Debbie Zimmerman, Grape Growers CEO, has argued that the homeless grapes are a result of counterbalancing attempts with the rough weather. Chairman of the Wine Council, Norm Beal, worries that the oversupply will only become more common as farmers affected by processing plant closures will find interest in wine grapes.

Beal believes that the growers and wineries need to create a varietal plan to determine which grape types need to be grown, “it’s really important that we get together and talk about the future of this industry. The last thing we want to see is 8,000 to 10,000 tonnes a year rotting on the vine.”

Speciality products drive Quebec growth

The Société des alcools du Québec (SAQ) reported a 4.5 per cent increase in net sales for the first quarter of the 2008–2009 fiscal year, largely driven by growth in the specialty product and wine categories.

The SAQ had net sales of $516.2 million, up $22.4 million from the preceding fiscal year. In addition, for this same 12-week period, which ended June 21, 2008, the SAQ reported consolidated net earnings of $165.8 million, a rise of $3.9 million or 2.4 per cent.

The outlets and specialized centres made net sales of $455 million compared with $434.9 for the previous fiscal year, an increase of 4.6 per cent. Net sales for grocers grew $2.3 million or 3.9 per cent, ending the quarter at $61.2 million.

In product terms, the wine category experienced a 3.8 per cent increase, 29 million liters to 30.1 litres; spirits held at 4.1 million litres; imported and microbrewery beers, ciders and related products remained stable with sales of 0.7 million litres. With 19 per cent of overall sales in the SAQ network, sales of so-called specialty products rose by nearly 13 per cent. This increase accounts for more than 50 per cent of the quarter’s overall sales growth and, according to the SAQ, confirms that Quebecers are tending to seek out new products.

Among the many milestones for this first quarter, the SAQ continues forward with its modernization of existing outlets and opening of new stores.

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Provincial roundup Atlantic Canada Ownership structure questioned

The Nova Scotia Liquor Corporation is awaiting further information regarding the Alberta Liquor Stores Income Fund’s recent minority (49 per cent) investment in Halifax’s Vin Art Wines.

“We’ll be reviewing the additional documents and their impact on the ownership structure of this business to ensure that the majority control issue is being respected,” NSLC spokesman Rick Perkins told The Chronicle Herald. “We want to make sure that any other arrangement they may have in addition to the share structure respects that issue of control.”

The fund, which controls more than 200 Liquor Depot and Liquor Barn outlets, has caused local concerns through its latest acquisition. Other private specialty liquor stores are weary of the competitive edge that the large Alberta retailer, with sales of $121 million in the second quarter of 2008, may give Vin Art.

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Perkins insists there is no need to worry as private stores must operate within NSLC mandates and that the business is still under the control of Jacob Chabinka, the owner.

According to Perkins, the fund is by no means operating the store.

NSLC books 6.6 per cent rise in Q1 income

The Nova Scotia Liquor Corporation reported income from operations of $51.9 million on net sales of $133.9 million for the first quarter, an increase of 6.6 per cent compared to the same period last year.

“We are pleased with our performance to date and while still early, we are optimistic that we are on course to reach our financial targets for this fiscal year,” stated Bret Mitchell, NSLC president and CEO. “We continue to make progress in our consumer offerings, customer service and store execution.”

The gross sales year-to-date rose 4.5 per cent over last year. The gross sales

increase breakdown by product category is as follows: wine sales at 5.6 per cent, beer sales at 4.9 per cent, spirits sales at 3.1 per cent, and ready to drink sales at 3.5 per cent.

Sales by product volume by NSLC’s retail and wholesale customers grew by 0.8 per cent in the first quarter with 205 thousand hectoliters sold compared to 203 thousand during the same time last year. The volume increases by product category are as follows: wine volume at 1.1 per cent, beer volume at 0.9 per cent, and ready to drink volume at 3.5 per cent. Spirit volume decreased 0.6 per cent.

Sales from the NSLC wholesale market (restaurants, pubs and bars, Private Wine and Specialty Stores and Agency Stores) were $27.8 million, a 12.4 per cent upturn from $24.7 million for the same period last year. Sales growth to licensees (restaurants, pubs and bars) experienced an incline of 3.4 per cent.

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