mhicken September 4th, 2009
An ongoing issue between the operators of the VQA wine stores and the BC Wine Institute (BCWI) has surfaced again following the BCWI’s threat to revoke 2 VQA store licenses for allegedly not meeting sales quotas. Carol’s Wines in Coquitlam and Arrowsmith Wine Shoppe in Parksville have both been told their licenses will be pulled by the BCWI as of the end of September. The BCWI technically holds all of the licenses for the VQA stores which were given to it when it was originally established as the marketing authority and regulator for VQA wines. However, the BCWI is no longer the regulator of VQA standards (this was transferred to the BC Wine Authority) and now only represents about half of BC wineries for marketing purposes (although most of the big ones are members). Despite an obvious conflict of interest, the BCWI still holds the retail licenses and makes a good chunk of its revenue from a cut of VQA store sales.
Many VQA store owners are unhappy with the current setup and the Canadian Federation of Independent Business is acting on their behalf, having recently sent a letter to the Minister responsible for liquor distribution and licensing, Rich Coleman. The letter outlines a litany of complaints including allegations of: unilateral changes in the terms of the licenses, restricted product availability, increases in BCWI fees, administrative issues and the aforementioned conflict of interest. Most of the problems relate to the current patchwork structure of the retail licensing system which is long overdue for major reform. However, it is the individual operators of the stores that tend to get caught in the middle. Only a complete overhaul of the retail system will solve these issues in the long term.
Update: this issue has now been covered in more detail (with comment from the BCWI) in this story for the trade magazine, Wines & Vines.
Tags: bc, bc wine institute, bcwi, licenses, retail, vqa, wine
mhicken May 14th, 2009
The trade magazine, Wines & Vines, posted an article on their website today reporting on the fact that some BC wineries have pulled their wine from VQA wine stores. The issue was also recently covered with less detail in my newsletter, Juice. The problems are related to on ongoing dispute between wineries that are members of BCWI and those that are not. The operators of VQA stores (for which BCWI holds the licenses) appear to be caught in the middle of the dispute. The BCWI imposed a surcharge on non-member wine sold through VQA stores, presumably in order to encourage membership or continued membership in the BCWI. In response, non-member wineries pulled their wine from VQA stores and some of it has now gone into the government store channel (!) where the wineries can make as much money if the VQA rebates are factored in. There appears to be no immediate resolution to the dispute.
For what it’s worth, my opinion is that a unified marketing body for BC wine would be incredibly valuable. However, I also believe that there is an inherent conflict of interest in a marketing body operating a chain of retail stores. While the VQA stores have done a tremendous job of promoting BC wine since their inception, it is not good for the end consumer to lose access to their favourite wines - particularly in locations where they have traditionally been used to seeing them. I’d be interested to hear your opinions on this.
Tags: bc, bcwi, surcharge, vqa, vqa rebate, wine, wine institute
mhicken April 22nd, 2009
In response to changes made to the pricing structure at VQA Stores by the BC Wine Institute, some BC wineries have pulled certain products from VQA stores, sending the wine into alternate retail channels including government liquor stores (GLS). The current issue is generally related to ongoing tensions between member and non-member wineries of BCWI. This specific additional problem arose when the BCWI changed the pricing policy for wine in VQA stores that was sourced from wineries who are not members of the BC Wine Institute. It was determined to charge those wineries a 6% surcharge for selling through VQA stores, presumably in order to encourage wineries to become or remain members of the BCWI. This change meant that it was just as profitable (or more so) for the non-member wineries to sell the wine through other channels including government stores. The GLS channel offers a “quality enhancement” rebate to VQA wineries for selling in government stores that results in the wineries receiving net proceeds close to those of alternate private channels. Unfortunately for the VQA store owners, some of the diverted wine comprises best-selling brands. It seems that no solution is in sight at the present time.
Tags: bc wine institute, bcwi, markups, prices, taxes, vqa, vqa stores, wine
