June 15, 2011 is the 90th Anniversary of the repeal of prohibition in BC and the establishment of government control of the sale of liquor within the province. The BC prohibition commenced on October 1, 1917. It was soon judged a failure, resulting in law-abiding citizens becoming criminals for simply wanting to have a drink with their dinner. Following a referendum, prohibition was repealed on June 15, 1921. On the same date, a “government control” system was implemented for the sale of liquor within the province.
It is the 90th anniversary and the government monopoly Liquor Distribution Branch (LDB) still controls and sells all liquor within BC at the wholesale level and still sells a vast amount through its government retail stores which have extremely high operating costs. The LDB is a $3 billion per year business in B.C. It generates about $900 million per year for the government but costs about $300 million per year to operate.
The following are some of the legacies of prohibition which make BC look ridiculous when compared to the rest of the world:
- Today, all liquor sold within BC must be registered and listed with the government. All imports of liquor must be approved by and processed through the government wholesaler. Yet, we don’t do this for cigarettes or guns.
- Today in BC, and unlike most of the rest of the world, it is still illegal to consume alcohol in a public place such as a park. BC citizens cannot legally enjoy a glass of wine while enjoying a picnic.
- It is still illegal to carry liquor across provincial borders (a criminal offence with possible imprisonment). In Europe, you can ship alcohol between countries without a problem. While Canadians cannot legally return from a vacation in another province with any alcohol, they can bring back 2 bottles per person after a trip to another country.
- We have excessively high taxes on liquor which result in prices being about double what they should be. For example, Chateau Ste. Michelle Riesling, a Washington state wine, is commonly available for $6 south of the border. It is $15.99 in BC because the standard LDB markup on wine is 123% plus 12% HST on top of that for a grand total of 135% tax.
- Wine is good for you when used in moderation as intended. No amount of soda pop is good for you but that is taxed at only 12%.
- We have arcane regulation of restaurants and private retailers such that these independent businesses are not permitted to do things which are otherwise commonplace. For example, they cannot store liquor off-site. They cannot transfer liquor between locations of the same restaurant or retail chain (even if the LDB is out of stock). They must buy nearly all their liquor from the government, usually from a single designated government store. If they order anything other than mainstream products, they are forced to order in full case lots via a slow and inefficient delivery system. As a result, restaurants frequently run out of products or encounter storage and financial issues due to the requirement to order in such large quantities.
- Restaurants and bars are denied wholesale prices entirely. Private retailers are given wholesale prices which are fixed artificially high by their chief competitor (the government stores). As a result, there is virtually no competition in the retail liquor business and consumers are denied the sales and good deals that are common in other countries.* It is illegal for a private person to sell a bottle of liquor to another private person. Auctions are also illegal (unless done for charity).
- Citizens cannot take their own wine into a restaurant and have the restaurant charge them a corkage fee (even if the wine was purchased from a government store). This is illegal – it’s considered to be “illicit liquor”.
Happy Anniversary LDB, but don’t expect the rest of British Columbia to be joining you to celebrate the 90th birthday of the establishment of government control over the sale of liquor within the province.
For more information about wine and liquor laws in BC and Canada, visit www.winelaw.ca.
Mark Hicken, BA JD
Vintage Law Group
T: 604 868 1375
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