A few years have now passed since the BC government first announced proposed liquor law changes that would permit the sale of BC wine in grocery stores. The rollout of this program has been slow and contentious. What at first appeared to be a promising prospect for both BC wineries and grocery stores, now is a limited offering.
That glint of BC wine- appears to be reserved only for the largest chain stores, namely, Save-On Foods and Loblaw’s. Additionally, BC wineries benefiting from the wine windfall may find that revenue siphoned off by wealthy U.S. and EU wineries if current trade challenges by the U.S. and EU are upheld by the World Trade Organization.
Them That Has…Gets
There is an agreement between the BC Wine Institute and Overwaitea Food Group, that all 21 of the former VQA wine stores will eventually be sold and relocated into Save On Foods stores.
At the time of this writing, 10 Save-On Foods grocery stores are licensed to sell BC wine and 6 licenses have been purchased for over $7 million by Real Canadian Superstore .
The BC government originally said they had 60 dormant wine store licenses (going back to 1987) that were in addition to the 21 VQA wine store licenses. The government then reduced the dormant number down to 18 licenses that have been the subject of two separate auction processes, in which 12 licenses have been auctioned off so far. Eleven of these auction licenses have been bought by the Loblaws group out of Brampton, Ontario.
The other license (rumor has it) was bought by Save On Foods and will be located in Prince George. Each auctioned special wine store license sold for over $1M. The result to date: all BC wine-in-grocery-store licenses will be in stores owned by only two major chains (Save On Foods & Loblaws). Small BC grocery store owners, ethnic stores, and independent grocery stores have been excluded because of the prohibitive cost of a license.
Trade Challenges Upset the Wine Cart
We suspect the government will not auction off the remaining six wine store licenses, as they are now confronted with a serious trade challenge that was launched by the Obama administration and has been joined by other major wine producing countries including the European Union.
The Obama administration’s trade action claims that the BC government’s policy of BC-only wine in BC grocery stores discriminates against U.S. winemakers and is a violation of World Trade Organization agreements.
There is no question the BC initiative of BC-only wine on grocery store shelves is a major concern to our trading partners.
What is the Future for Wine in BC Grocery Stores?
At this time, there will be potential for a maximum of 33 grocery stores in the province owned by two major players that will have wine on BC grocery store shelves. If the U.S. trade challenge succeeds, imported wines will also be sold on grocery store shelves or the government will have to abandon this initiative.
In the end, the dream will mostly die for small grocery stores and small and medium-sized BC wineries who will be excluded because of their inability to compete with the major international players.
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