Why Aren’t More Grocery Stores in BC Selling Liquor?

One of the key recommendations from the 2013 Liquor Policy Review Final Report in BC was that liquor should be made available in grocery stores. Earlier this year, the Liquor Control and Licensing Branch (LCLB) implemented this recommendation by issuing a policy directive, effective April 1, 2015, that describes how grocery stores may sell liquor. However, as readers of this blog in BC will have noticed, very few grocery stores have started selling liquor. In fact, currently only one grocery store is doing so: the Save-On-Foods in Surrey. Why is this? As described below, there are two significant impediments.

The first is a licencing impediment. A grocery store wishing to sell liquor requires either a licensee retail store (LRS) or wine store licence. An LRS licence permits the sale of beer, wine, cider, coolers and a full range of spirits. There shutterstock_138403250are two relevant types of wine store licence: an independent wine store licence, which permits the sale of any kind of domestic or imported wine product, including cider and wine coolers, and a VQA wine store licence, which permits the sale of VQA wine only. Importantly, the LCLB is not issuing new LRS or wine store licences. Accordingly, if a grocery store wishes to sell liquor it must arrange for an existing licence to be relocated to the grocery store. For LRS licences, this is exceedingly difficult. The LCLB does not permit an LRS licence to be relocated within one kilometre of an existing LRS or government liquor store. The Vancouver Sun previously reported that only two of Vancouver’s 53 large grocery stores are far enough away from an existing LRS and government liquor store to have an LRS licence relocated to them (see http://www.vancouversun.com/news/Only+grocery+stores+Vancouver+will+able+sell+liquor/9624538/story.html).

Wine store licences are not subject to the same one kilometre relocation rule. However, there are fewer of these licences: there are currently only 12 independent wine store licences and 21 VQA wine store licences in BC. Moreover, even if a grocery store looking to complete the relocation of a wine store licence is able to satisfy the LCLB’s relocation and other policy requirements, it must still worry about the second impediment: satisfying municipal requirements. For example, in July 2015 the City of Vancouver rejected a proposed VQA wine store within the Urban Fare at the Shangra-La Hotel on Alberni Street because it was too close to an existing government liquor store, and accordingly did not comply with City rules. That wine store – which the grocery store had already constructed in the mistaken belief it would be approved – currently sits empty. It remains to be seen how accommodating other municipalities will be.

In short, although it is likely BC consumers will see a small but increasing number of grocery stores offering wine (most likely VQA wine) on their shelves, there is unlikely to be a sea change in the way liquor is sold privately in BC under the new rules.

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