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Legal Issues Affecting the BC Wine Industry

Legal Issues Affecting the BC Wine Industry. BC Wine Grape Council Conference, Penticton, BC Mark Hicken, Vintage Law Group. July 2011. Introduction. Liquor Regulation in BC - Have to Trace Back to Prohibition

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Legal Issues Affecting the BC Wine Industry

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  1. Legal Issues Affecting the BC Wine Industry • BC Wine Grape Council Conference, Penticton, BC • Mark Hicken, Vintage Law Group July 2011

  2. Introduction • Liquor Regulation in BC - Have to Trace Back to Prohibition • June 15, 2011 - 90th Anniversary of Repeal of Prohibition and Establishment of Government Control System • North American Approach. Very Different from Europe.

  3. Post-Prohibition Legacy of Regulation • No alcohol vs. tightly controlled alcohol • 90 yr. mentality is CONTROL • No distinction for wine • Wine = AlcoholAlcohol = Danger Danger = Puritan Regulation

  4. Structure of BC Wine Regulation • Statutes: Liquor Control and Licensing Act, Liquor Distribution Act, Agri-Food Choice & Quality Act • Regulations • “Policy”: e.g. LCLB Manuals • Terms of License • Other: Contracts

  5. Effects: Wine Culture • Tasting Event Rules • Off-Site Tasting Rooms • Farmers Market Tastings • Picnics • Special Occasion Licenses • Caterers

  6. Effects: Retail Distribution • Access to retailers in BC • No conventional wholesale discount system • Tightly restricted retail licenses • Access to retailers across Canada (interprovincial shipping)

  7. Effects: Retail Distribution • Restaurants/Bars • With respect to wine (and alcohol), operate in a regulatory environment which is very challenging • Zero wholesale discounts, no off-site storage, no intra-chain transfers

  8. Effects: Taxes & Regulation • Hidden Taxes (Liquor Board Markup) • Price Fixing • Tied House Rules • Advertising & Promotions

  9. Effects: Manufacturers • Land Based vs. Commercial Wineries • Restrictions on LBW • Not in Law, Comes from LDB contracts • VQA, GIs, Packaging • Winery Terms of License

  10. Effects: Benefits for BC Wineries • Tremendous growth in BC wine industry despite regulatory environment • Exemptions: direct delivery system; preferential treatment on liquor board markup; VQA stores • Trade issues, consumer issues, what about the future?

  11. Modernize: Provincial Reform • Deregulation: good or bad? Look at HK or WA. • Overhaul and modernize regulatory system • Remove “control” mentality • Recognize benefits of wine • Review distribution system

  12. Modernize: Federal Reform • Interprovincial Shipping • Federal labeling laws • Trade issues

  13. Modernize: Admin Law 101 • Rule of Law: Law is Statute and Regulations • Policy is not Law • Act within Confines of Law • Policy Must be Supported by Law • Fairness, Due Process, Non-Discrimination

  14. Conclusion • Regulatory regime affects all aspects of production, distribution and consumption of wine in BC. • Growth of BC food and wine culture restricted by post-prohibition mentality.

  15. Contact Info. • Mark Hicken • Vintage Law Group • T 604 868 1375 E mark@winelaw.caW www.winelaw.ca

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