Tales From The Front Lines: This Liquor Strike Is Absolutely Hammering the Hospitality Industry

As the BCGEU strike—or as anyone not in the news business calls it, the liquor strike—drags on into its sixth week, we wanted to check in with some industry folks and see how they’re doing. Because as much as it sucks trying to find a BCL that’s still open—the BCL helpfully declines to list what stores are open on their website, opting instead listing what ones are closed, which is not helpful—and as much as it sucks being limited to three “units” per visit (I’ll have a 16.5% bottle of Amarone, a cask-strength Maker’s and a 15-pack of Wildcat Strong please), it’s not our livelihood at stake. And it’s occasions like this that should serve as a reminder of just how absolutely, ridiculously out-of-touch or liquor control system is here. Here’s a great summary by the always on-point Mark Hicken (one of our tireless crusaders for sane liquor laws):

BC still requires that all imported alcohol be distributed through government warehouses in Delta or Kamloops. This applies even when the alcohol is primarily stored in a separate third party warehouse (which most of it is) and even when the alcohol is being delivered to a non-government licensee (e.g. restaurant, bar or private retailer). The forced requirement for a government “middle-man” is neither efficient nor environmentally sustainable. It increases costs and causes a complete breakdown in distribution whenever there is a strike (or any other disruption to the operation of the government warehouse). There is simply no reason for this system to continue.

The entire article (click here) is worth your time, and be prepared to be outraged anew at the end. It’s just such an antiquated system that does almost nothing to serve the consumer or the business person. And now, the experts.

The Restaurateur: Claire Lassam, Livia

At Livia, all of the wine we order is “spec” meaning it’s not simply wine that you can buy off the shelf at a BCL, and though we have to purchase it through the BCL, it’s imported from another small wine importer, who has to pay to warehouse the wine until orders come in.

Because none of the wines we buy are ever available on the shelves of the liquor stores, with the strike, none of the wines we normally buy are available to us.

A big part of our identity is Lambrusco. We sell a lot of it: for brunch, bottles to go, and we package up three-packs of Lambrusco for the holidays. There is some great local wine around, to be sure, but Lambrusco is only Lambrusco if it’s from Emilio Romagna. It’s a deeply Italian wine, and there isn’t an alternative. We’re running off of what we were able to bulk order right before the strike, and we’re running extremely low right now. It’ll be very strange to be selling “Lambrusco” hats, but not have any Lambrusco in the shop.

It’s a grim reality for many of us small restaurant owners, who already have so much on our plates, to be then running around from liquor store to liquor store, hoping to find a couple bottles of vodka for caesars, and Prosecco for bellinis—but that’s what my husband and I will be doing next week.

Liquor is one of the only high-margin items in restaurants, an industry that calls you lucky if you have a 5% profit at the end of the year. Having a monopoly on all booze sold in BC leaves so many small businesses that much more vulnerable.

The Importer: Peter Marshall, Sur Lie

The strike is hammering importers because while the BCLDB is on strike, we cannot generate revenue from imported product. While some importers represent local BC wineries and distilleries, the percentage of a portfolio that this represents will vary widely. Speaking for myself, although I know several other small and medium sized importers in the same situation, imported wine and spirits represent 95% of my business. For the duration of the strike that means that 95% of my business is on pause.

Let me explain.

All imported wine and spirits flow through the government warehouses. With those warehouses on strike, nothing is moving. Stores, both government operated BCL and independent retailers cannot replenish their inventory of imported wine and spirits. Same for restaurants. While importers may work closely with restaurants and retailers, on paper we only have one customer: the BCLDB. Importers are not allowed to sell imported wine and spirits directly to restaurants, retailers, or the public. All imported wine and spirits go through the BCLDB. For the duration of the strike wine and spirits importers will generate no revenue from imported products. The strike is also happening at a critical time of year, as historically many importers generate approximately half their annual revenue during October, November, and December – OND as it is referred to by the trade. Additionally, all imported wine and spirits are required to be stored in 3rd party bonded warehouses. So, while we are unable to generate revenue during the strike, we also still have to pay warehousing costs for inventory currently in BC and shipping invoices for inventory currently on the way.

The last time a strike took place it last for several weeks, but the disruption to importers businesses lasted for months. With the government and the BCGEU not appearing to be close to reaching an agreement, for the time being importers businesses are indefinitely on hold.
The strike is hammering small restaurants because many rely on alcohol sales to boost revenue. The strike negatively affects this as restaurants have to buy from BCL stores. Government rules and regs do not allow to buy from independent retailers like Marquis Wine Cellars, JAK’s, Everything Wine etc…, so when BCL stores are on strike small restaurants are more likely to run out of inventory – especially as very few restaurants have the storage space or capital to stockpile inventory.

It is theoretically possible to pivot to working with BC wineries and distilleries, but this is not ideal for all restaurants who may not have the relationships in place, or may be concepts focused for example on French or Italian wines, sake, or imported spirits. None of which will be available to them until the strike is over.

The Winemaker: Heleen Pannekoek, Fort Berens Estate Winery

We sell wine through most channels in BC. And while restaurants and liquor stores have shown a slight uptick in sales, it’s not even close to offsetting the 30-40 cases a week we sell through the BC Liquor stores—so we’re in position of losing significant revenue every day the strike continues. In my view, every time there is a big disruption like this in the industry, everyone loses. The wineries and other producers, but also the consumers that are missing their routine purchases.