In October 2005, B.C.'s private liquor store interests tried to directly lobby Premier Gordon Campbell to reduce the price industry players pay for liquor. A little more than a year later, that cut - which will cost government up to $31.1 million in lost revenue - was made. In a letter addressed to the premier (which was obtained by Public Eye via a freedom of information request) the then president of the Alliance of Beverage Licensees, David Crown, informed "Gordon" his group was concerned "with the direction of government with regard to our industry."
"I have now had the opportunity to have several meetings with Minister (John) Les, and it is most apparent there is no appetite on his part to implement the initiatives that were promised us from Minister (Rich) Coleman" - Minister Les's predecessor.
Specifically, Mr. Crown referred to an anticipated three percentage point increase in the discount those stores receive when purchasing alcohol from the government - something he thought "would be achieved by November 2005."
But in a written statement, the solicitor general's ministry said the premier didn't actually become involved with the file - a statement supported by the alliance's current president Al Arbuthnot. Moreover, the ministry says Minister Coleman made no such promises, denying Minister Les didn't have an "appetite" for increasing the discount. He simply, "as per usual practice, asked that an analysis of the request be undertaken by ministry staff."
Mr. Arbuthnot agrees, adding Minister Les was probably "trying to get his head around a lot of different portfolios in the ministry." Although he maintains Minister Coleman did promise a discount.
Prior to Mr. Crown's letter being sent, a draft briefing note prepared by the province's liquor distribution branch and dated Sept. 19, 2005, stated "government will continue to review options to improve liquor pricing policies, but has no plans for further changes at this time." But, by November 2006, government had made that change, costing the province between $20.8 and $31.1 million in lost revenue each a year - a number that will vary depending on the growth of the private liquor store industry. This, according to a separate briefing note dated Oct. 10, 2006.
That note also states private liquor stores "would welcome a discount increase." Although it was "assumed much of the LRS discount will be passed on to consumers through lower prices." But any other implications for increasing that discount were severed from the note prior to its release. The following is a complete copy of the letter sent by Mr. Crown to Premier Campbell.
FOR A RESPONSIBLE LIQUOR INDUSTRY
October 28, 2005
Premier Gordon Campbell
Legislative Assembly of British Columbia
Victoria BC V8V 1X4
We write to express our concern with the direction of government with regard to our industry. I have now had the opportunity to have several meetings with Minister Les, and it is most apparent there is no appetite on his part to implement the initiatives that were promised us from Minister Coleman. The two initiatives industry is depending on are:
* That our retail operations would be given a minimum of a 3% increase in discount and that this would be achieved by November 2005. The goal is to somewhat level the playing fiel, allowing our members to compete with existing government stores.
Many of our operations throughout the province are borrowing on equities achieved over the last thirty years to survive, while they try to gain the market share that was promised us. We request your assistance on the immediate granting of the 3% discount.
We are certain that with these two initiatives in place industry can meet a balance in the market place.
Our Members are small business people located throughout the province and for the most part we are strong believers and supporters in the direction you have taken this province. We thank you for your dedication and hard work, and ask that you will take a moment to direct your people and grant these requests.