Wines & Vines Home
   
 
Welcome Guest
LOGIN |  CREATE ACCOUNT
 
ADVERTISEMENT
 
 
 
02.26.2014  
 

B.C. Alarmed over Wine in Grocery Stores

British Columbia Wine Institute says wider sales threaten local wineries

 
by Peter Mitham
 
 
prodan
 
Miles Prodan

Vancouver, B.C.—Vancouver is hosting the Vancouver International Wine Festival this week, one of North America’s biggest consumer-oriented wine festivals, but guests of local hotels are prohibited from carrying a glass of wine (or any other kind of alcohol) from the lobby lounge to the hotel’s restaurant.

That, and other inconveniences, are set to be remedied in new legislation the provincial government has pledged to pass in the coming weeks in response to a review of provincial liquor policies released earlier this month.

But if the wine industry has warmed to changes that will give consumers greater freedom where and how they drink their wine, nothing strikes more fear into the hearts of some members than licensed grocery stores.

“Our biggest concern is a grocery store getting hold of a liquor license, frankly,” said Miles Prodan, president and CEO of the B.C. Wine Institute, at a seminar held by Law Seminars International this week to review legal issues associated with the wine business in B.C. The annual seminar has preceded the Vancouver International Wine Festival for five years running, drawing more participants each year.

Prodan’s organization is charged with the promotion of wine bearing the B.C. Vintners’ Quality Alliance (BC VQA) designation, borne by wines made entirely from B.C.-grown grapes and meeting specific quality standards. It also holds licenses for 19 stores across the province selling exclusively BC VQA wines.

Worries over more downward price pressure
With the industry battling to keep market share and even lowering prices in response to competitive pressures, Prodan isn’t keen to see more downward pressure on the sales of the province’s wine.

“We’re about protecting 100% B.C.,” he told the room full of industry members, retailers, and lawyers. “[Grocers] getting their hands on a license is going to be problematic for us because it will not be VQA, 100% B.C. [they’re selling]. It will be about low-priced SKUs.”

Retailers in Alberta, which privatized its liquor system in 1993, have grappled with similar issues. The province is reviewing its liquor laws this year, which have long barred grocers from selling alcohol within grocery stores. Sales are allowed at adjacent locations, however.

This has historically drawn the ire of smaller retailers who claim that Loblaws and other grocers can use low overhead costs and volume sales at high-traffic locations to absorb low margins on popular products. This draws in customers, who may then pick up a higher priced item while they’re there.

That’s the kind of scenario continuing to play out in Washington state’s deregulated liquor sector.

While convenience stores and grocers could sell wine prior to the passage of ballot initiative 1183 in November 2011, when the state got out of the liquor business the door was also opened to central warehousing and volume discounts by large retailers.

These have brought new competitive pressure to bear on the state’s wineries (see “Fall-Out Continues in Washington State,” Wines & Vines, January 10, 2013).

Deregulation can bring new challenges
The entrance and subsequent growth of large retailers in the state on the back of the new operating environment is changing the game for smaller wineries, which face greater competition for shelf space. The large retailers can secure discounts that allow them to buy and move volumes of cheaper product, explained Marty Clubb, who has followed developments closely as president of the Washington Wine Institute and co-owner of L’Ecole No. 41 winery in Lowden, Wash.

Smaller shops are unable to compete on the same terms, and try to get better deals from wineries to attract price-conscious consumers used to getting bargains at the big retailers. And, as wineries able to offer better prices secure shelf space, other wineries need to find other channels.

“There is growing evidence of this creating challenges for small wineries to get their foot in doors,” he told Wines & Vines. “This notion that this free marketplace was going to create new opportunities for small wineries is clearly not materializing.”

While his winery is large enough to hold its own, he estimates that three-quarters of the state’s 689 wineries sell mostly within the state.

“The entire marketplace has got a competitive pressure on it now that is putting retail shops in jeopardy, that is limiting locations where small wineries can distribute,” he said.

With new entrants to the industry continuing to arrive each year, the pressure isn’t about to let up.

Prodan doesn’t want to see the same situation play out in B.C. While the province isn’t giving up control over distribution, retailers have been told they’ll be allowed to maintain secure, off-site storage of product subject to regulations that have yet to be developed. Whether grocers will be allowed to engage in central warehousing is a question seminar participants raised.

However, Prodan is concerned that grocers will impose fees and conditions on wineries that ultimately extract equally damaging concessions from B.C. wineries.

“We are going back to government saying this makes no sense at all,” he said of the move to allow grocers to sell alcohol. “However, if you insist on doing it, what we need to do is take a look. ... Maybe it has to be 100% B.C., including beer and spir its [in grocers].”

 

SHARE »
Close
 
Currently no comments posted for this article.
 
CURRENT NEWS INDEX »


 
Wines & Vines Home
 
866.453.9701 | 415.453.9700 | Fax: 415.453.2517
65 Mitchell Blvd., Ste. A San Rafael, CA 94903
info@winesandvines.com
Wine Industry Metrics
 
Off-Premise Sales » Month   12 Months  
March 2013 $546 million
5%
$6,988 million
7%
March 2014 $572 million $7,451 million
     
Direct-to-Consumer Shipments » Month   12 Months  
March 2013 $177 million
20%
$1,483 million
10%
March 2014 $213 million $1,634 million
     
Winery Job Index » Month   12 Months  
March 2013 253
15%
166
27%
March 2014 292 210
     
 
MORE » Released on 04.14.2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Practical Winery & Vineyard Library
 
Search the PWV archive »
 
 

Direct To Consumer
Wine Shipping Report
2014
 
Download full report »
 
 

CALENDAR
  • April 19
     
    Appellation St. Helena food pairing competition
     
  • April 23
     
    Sustainable Vineyard Practices: Strategies for Using Less Water
     
  • April 23-26
     
    CABs of Distinction in Paso Robles
     
  • April 26
     
    Siera Pelona Valley wine festival
     
  • MORE »
 

READER COMMENTS
 
Article: Starbucks Expands Wine Sales to More Cities »
 
Pretty amazing that the 1st wines chosen are from Argentina, Italy, and New Zealand! I...
Reader: Jacques Brix
 
Article: Starbucks Expands Wine Sales to More Cities »
 
Given Starbucks commitment to sustainability and global responsibility, I expect this move could be a...
Reader: Guest
 
Article: What to Do About Red Blotch »
 
There is NO correlation with planting density. Also FPS is working on the problem. New...
Reader: Guest
 
Article: Premiere Wine Auction Nets $5.9 million »
 
Thanks for letting us know Janet, we've updated the story. Cheers
Reader: Andrew Adams
 
Article: Will Barrels Go the Way of Floppy Disks? »
 
Fun piece. Particularly enjoyed the three clearly superior attributes of standard barrels, including looking cool...
Reader: Tom Gable
 
 


Directory/Buyer's Guide — Your Wine Industry Marketplace
 
 
WINERY SEARCH
 
 
Advanced Search »
SUPPLIER SEARCH
   by Product
 by Company Name or Brand
 
Browse by Category »
2014 Directory/Buyer's Guide
The Wines & Vines Directory and Buyer's Guide
 
 
EXPANDED ONLINE SEARCH INCLUDED WITH PURCHASE
 
ORDER NOW »
 
LEARN MORE »
 
 
Wines & Vines Magazine
 
 
LEARN MORE »
 
SUBSCRIBE »
 
Digital Edition Now Available!
Wines & Vines Digital Edition Now Available
 
LEARN MORE »
 
ORDER NOW »
 
 
The Wines & Vines Online Marketing System
 
The Industry Standard winery marketing application
 
FREE LIVE DEMO »
 
VIEW VIDEO »
 
 
 
 
Latest Job Listings
 Fine Wine Sales Repres...
 Seattle And Portland, OR
Sales and Marketing
 Maintenance Mechanic
 Healdsburg, CA
General Administration and
 Wine Sales South Bay
 Santa Clara, CA
Sales and Marketing
 Full Time Retail Wine ...
 New York, NY
DTC, Tasting Room and Retai
 Harvest Intern
 Yamhill, OR
Winemaking and Production
 Office Manager
 Napa, CA
General Administration and
 Staff Accountant
 Napa, CA
Finance
 Production Associate
 San Rafael, CA
General Administration and
 Harvest Intern
 Prosser, WA
Winemaking and Production
 Assistant/Associate Ma...
 Lake Bluff, IL
Sales and Marketing
 
More Job Listings >>
Follow Us On:
 
 





Home  |  About Us  |  Editors  |  Subscribe  |  Print Edition  |  Digital Edition

Advertise  |  Site Map  |  Contact Us  |  Privacy Policy
 
 
Copyright © 2001-2014 by Wine Communications Group, Inc. All Rights Reserved.
No material may be reproduced without written permission of the Publisher.
Wines&Vines does not assume any responsibility for any unsolicited manuscripts or materials.