Whiskey on the Rocks

Rising Tide Consultants Offer Strategic Action Plans to Protect Business from The Minors as Agents Program

MINORS AS AGENTS – STRATEGIC PROTECTION PLANS

Rising Tide Consultants has 35 years of experience in Liquor Licensing and Compliance and is the expert in navigating challenging situations for hospitality and retail. The Government Minors As Agents Program is something all owners and operators should be watching out for to avoid a $7,000 fine and possible 21 day closure!

In November 2022, the Liquor & Cannabis Regulation Branch announced they were resuming the Minors as Agents Program of sending a minor into restaurants, bars, and liquor stores without providing identification. They have been very successful in catching licensees not requiring 2 pieces of valid identification in these transactions.

Rising Tide Consultants can help you avoid falling victim to this targeted program by arming you with the right information and training to lay the proper groundwork to avoid penalties or dispute a charge if you are caught in non-compliance.

We will do an on-site visit to your establishment to thoroughly audit your operation and provide you with a personalized Strategic Plan that will inform you of what you can do to set you up for the best chance of success.

We will address proper policies and procedures with regard to ID practices, communication to your staff and management, and updated systems you can put in place to ensure compliance and give you the defence of due diligence. We can also customize a policies and procedures manual for your business for an additional fee.

Value $1,200
Feature Rate $499 (+applicable taxes)

Contact us now to lock in this feature rate and protect your business against this program that the branch is making a very significant priority at a time when the industry is still fragile.

info@risingtideconsultants.ca
604.669.292

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B.C. pub chain the Donnelly Group seeks creditor protection

Bert Hick, a liquor and cannabis licensing expert who heads Rising Tide Consultants, said he is “saddened” by the news and fears for the whole hospitality industry.

A lot of it was COVID,” said Hick, but it’s also labour shortages, rising costs and the looming payback of pandemic financial supports from the federal government.

It’s a bit of a perfect storm,” said Hick. “The hospitality industry is very, very fragile right now. My prediction is you’re going to hear more horror stories in the coming months” with the COVID relief payments coming due at the end of the year.

The Donnelly Group, which owns pubs and clubs that are fixtures in Vancouver’s nightlife and hospitality industry, is filing for creditor protection.

The Vancouver-based company, which operates more than a dozen pubs, clubs and restaurants in Vancouver and Toronto under the Freehouse Collective, said Wednesday it has started proceedings under the Companies’ Creditors Arrangement Act (CCAA) to revise the terms of existing loans and restructure debt it needed to take on to survive COVID-19.

The Donnelly Group has opted to initiate the creditor protection process to restructure to avoid closing locations and laying off employees, said company founder and CEO Jeff Donnelly.

“We could have gone one of two directions. We could have, frankly, just closed a bunch of our businesses and just stuck with the real winners, and we would have been OK,” Donnelly said Wednesday. “But we might have lost half of our workforce. And when you’ve got 800 employees, that just wasn’t an option for us.

“This is what we need to do to keep these places open, so we’re going to do it,” Donnelly said. “We’re going to come out stronger than we were before.”

In a petition filed in B.C. Supreme Court on Tuesday, the company asked the court to appoint Ernst & Young as a monitor over its affairs as it works out a restructuring plan with its creditors.

The petition involves 12 pubs, cocktail clubs and restaurants in Vancouver — including the Lamplighter, Butcher & Bullock, and Brass Fish — and two in Toronto, as well as three Barber & Co barbershops, Bomber Brewing in East Vancouver, and a company that handles the cleaning of the hospitality venues.

In total, 750 people are employed in Freehouse’s hospitality venues, 40 at Bomber Brewing, and 25 at Barber & Co.

A retail cannabis business also owned by Donnelly, called Lightbox and doing business as Dutch Love, is subject to separate insolvency proceedings, after applying for creditor protection late last year.

The company said the move was necessary to survive the crippling economic impact wrought by the pandemic on the hospitality industry.

It will work on a restructuring plan and streamline operations in the next couple months as part of the proceedings, but expects to continue operations at its locations and “engage its employees at current levels during the CCAA proceeding and afterwards.”

The company said its decision to restructure isn’t a reflection of its employees but a “strategic response to the industry-wide impact of the COVID-19 pandemic.”

B.C. Restaurant and Foodservices Association head Ian Tostenson said Donnelly’s entrepreneurship and vision were worthy of him being named to the B.C. Restaurant Hall of Fame pre-pandemic, but the expansion into barber shops, cannabis and brewing proved costly with the COVID downturn.

“It was working then in that economy,” said Tostenson. “You could fuel that kind of machine, that kind of business then.”

He noted the whole industry got hit hard, acting as “a bit of a canary in the coal mine” for retail generally because of closures, capacity limits and other challenges.

Then, when customers started coming back, inflation hit along with supply chain challenges, increasing labour costs and a shortage of workers.

“We’re seeing bankruptcies up 116 per cent year-over- year,” said Tostenson, and less than 50 per cent of all restaurants in a recent survey were making money.

Bert Hick, a liquor and cannabis licensing expert who heads Rising Tide Consultants, said he is “saddened” by the news and fears for the whole hospitality industry.

“A lot of it was COVID,” said Hick, but it’s also labour shortages, rising costs and the looming payback of pandemic financial supports from the federal government.

“It’s a bit of a perfect storm,” said Hick. “The hospitality industry is very, very fragile right now. My prediction is you’re going to hear more horror stories in the coming months” with the COVID relief payments coming due at the end of the year.

“A lot of business owners took those loans on the premise (business) would come back,” noted Tostenson. “And it did for a couple of months, but then inflation kicked in.”

Hick and Tostenson both praised the Donnelly Group as exemplary operators with an impeccable record in the industry.

Like most in the hospitality industry, the Donnelly Group’s businesses were shuttered in March 2020 as a result of the pandemic and reopened gradually in the following years.

According to Donnelly Group’s petition filed this week, the businesses were able to maintain payment of debts until 2021, when they negotiated an agreement with BMO, the primary lender, to make monthly interest-only payments.

Once venues reopened in 2022, the businesses faced further economic challenges due to hikes in the minimum wage, supply chain issues, and rising insurance and interest rates.

Revenues have returned to 2019 levels, increased labour and operational costs mean thinner margins and a lower profit, said the company.

The hospitality entities listed in the petition currently owe BMO about $13.6 million, while Bomber Brewing owes $1.25 million, according to the petition. Their monthly debt servicing payments total about $295,000 a month.

While the petitioners have been able to make interest-only payments to BMO following a 2021 agreement with the bank, they “are not in a position to make principal repayments on a go-forward basis,” said the petition.

BMO supports Donnelly’s restructuring, and the lender has agreed in principle to restructure the company’s payments during the process, the petition says: “BMO benefits by the continued operation of the enterprise by present management, which represents its best prospect of recovery.”

Donnelly is also in arrears with some landlords to the tune of about $766,000, is in arrears for PST, and faces lawsuits from landlords and other creditors.

https://vancouversun.com/news/local-news/b-c-pub-chain-donnelly-group-seeks-creditor-protection

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Unrecognizable Barista pouring a beer in a pub

Avoid a $7000 Fine and Possible 21 Day Closure for your Business

Think the Minors As Agents Program doesn’t apply to you? Think again

The ‘Minors as Agents’ program is ramping up inspections and enforcement. Are you prepared? Rising Tide provides support, knowledge and expertise in all facets of liquor licensing, compliance and enforcement issues. One of the hot topics facing the industry right now is the MINORS AS AGENTS program. 

Although it is commonly thought that retail liquor stores are the main targeted businesses for this initiative, it actually applies to all liquor primary, food primary, restaurants, pubs, cannabis stores as well as retail liquor stores.

The Minors as Agents program is funded and regulated by the Liquor and Cannabis Regulation Branch, whereby “youthful-appearing adults” are recruited to attempt to purchase liquor on the Branch’s behalf from businesses selling liquor or cannabis. The youthful appearance of the agents is intended to raise concerns by employees as to whether or not the agents were minors and proceed to require two pieces of proper identification before the purchase of liquor or cannabis is allowed. The issue is the agents can often appear older, and if a judgment call is made to not ask for ID, the business can be in some very hot water. 

The first infraction is a $7,000 FINE or 7 day suspension. If you pay this fine and the infraction goes on your permanent record, then your second or subsequent infractions within a calendar year (and you can be sure that they will be targeting your establishment again) could result in a higher fine or up to a 21-DAY SUSPENSION of your liquor license.

Rising Tide Consultants are experts on this program, so we can help your business take measures to protect against the risks and penalties and, if necessary, fight a non-compliance charge alongside you. We also do audits of licensed establishments to make sure they can pass a routine inspection by ensuring the proper policies and procedures are in place. Contact us now and learn how to avoid falling victim to this targeted program. Government is increasing its focus and has been ramping up inspections and enforcement last year, and it will be continuing in 2023.

Rising Tide can provide you with updated Policy and Procedure manuals, training on ID protocols and placement of appropriate ID signage within your establishment so that your staff are armed with the right information and training to lay the proper groundwork to avoid penalties or dispute a charge if you are caught in non-compliance.

We’re here to help.
Contact Us
Your Initial Consultation is Complimentary.

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Vancouver makes positive move in liberalizing Liquor Laws

Bert Hick, President & Founder of Rising Tide Consultants, spoke March 8th at the Standing Committee on City Finance and Services on Vancouver’s efforts to liberalize rules governing alcohol and the hospitality industry. Up for discussion was a “dual license” that would enable an establishment to serve food during the day and then transition into a bar in the evening.

Vancouver council considers three “dual licence” applications, from Cinema Public House and Cold Tea, both on the Downtown Granville strip, as well as Hamburger Mary’s in Davie Village.

Bert addressed Council asking for 2 Miracles.

“Miracle #1 is to amend current legislation to allow new establishments that are opening to apply for a dual license right off the bat. Right now, you have to have an existing Class 1 or Class 2 license in order to apply for a dual license.”

“Miracle #2 is to get rid of the antiquated policy that predates 2005 that simply does not work and doesn’t exist in any other city, regarding the minimum distance between certain classes of liquor primary establishments, when existing establishments are seeking dual licensing.”

Following Mr. Hick’s address to Council, we are pleased to announce that Cinema Public House has been approved for their dual license!

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