When the Campbell administration told private liquor stores they would be getting a break on the price they pay to purchase alcohol from the government, this is how Liquor Barn GP Inc. president and chief executive officer John Mather reacted: "We are pleased with the (British Columbia liquor distribution branch's) announcement, as the increase in the purchase discount rate enhances our overall operational flexibility, and is expected to increase our gross profit." But, by the time January came around, this is what the Alliance of Beverage Licensees was telling British Columbians: "ABLE BC is please to announce that as a result of the forthcoming new wholesale pricing model from the provincial government, consumers will not only continue to enjoy the service and convenience from their local private liquor store, but can look forward to paying lower prices in the future." And that messaging suited the government just fine.
In an email sent to liquor distribution branch staff, wholesale business director Katharine Jowett notes the alliance's news release mentions "the LRS's will be passing along the 3% to the consumers (Of course, the thing to say!)." Indeed. The following is an edited copy of that email, which was obtained by Public Eye via a freedom of information request, as well as the Liquor Barn's earlier release.
From: Jowett, Katharine LDB:EX
Sent: Jan 22, 2007 5:20 PM
To: Chambers, Jay LDB:EX; Wilson, Kelly LDB:EX; Branham, Gary S LDB:EX; Procopio, Michael LDB:EX; Wilcox, Don LDB:EX; Fraser, Jim LDB:EX; Tougas, Bob LDB:EX
Subject: FW: Industry Update Jan 2007
Please note the attached communication from ABLE to their members. Of specific note are that the LRS's will be passing along the 3% to the consumers (Of course, the thing to say!)
When you hear it on the street that always is some element of truth somewhere underneath there! YIKES!!
Director of Wholesale Business
British Columbia Liquor Distribution Branch
2625 Rupert Street
Vancouver, British Columbia V5M 3T5
From: ABLE BC [mailto:firstname.lastname@example.org]
Sent: Monday, January 22, 2007 3:14 PM
To: Jowett, Katharine LDB:EX
Subject: Industry Update Jan 2007
To: ABLE Members
From: Mariana Fiddler
Date: January 19 2007
Re: Industry Update
I recently distributed a press release that speaks to the additional 3% discount forthcoming on January 28th. I have included a copy of the press release below. This is a tremendous opportunity for our sector to compete more effectively in the marketplace. If you receive calls from media on the subject, please keep to the messaging provided below...as this is truly a win-win for all, especially the consumer.
For Immediate Release:
ABLE BC - Consumers Win Due to the Provincial Government's Progressive Thinking with the Change to Wholesale Pricing for Private Retail Liquor Stores
Vancouver, BC January 18, 2007 - ABLE BC is pleased to announce that as a result of the forthcoming new wholesale pricing model from the provincial government, consumers will not only continue to enjoy the service and concenience from their local private liquor store, but can look forward to paying lower prices in the future.
Many private operators are looking forward to passing the savings on to the consumer as the lower prices will allow them to become more competitive in the marketplace.
With the anticipated reduction in prices and coupled with the convenient locations and later operating hours, it's a win-win situation for the community, government and the consumer.
About ABLE BC
ABLE BC is the industry's essential representative to government. ABLE BC speaks with one voice for all liquor primary licensees in BC, communicating and c onsulting on issues of common concern.
Liquor Barn Comments on Increase in British Columbia Licensee Retail Store Purchase Discount Rate
28 Nov 06
EDMONTON, Nov. 28 /CNW/ - Liquor Barn Income Fund (the "Fund") (TSX: LBN.UN), a leading operator of private retail liquor stores in Western Canada, today commented on the British Columbia Liquor Distribution Branch's ("BCLDB") recent announcement that as of January 28, 2007, the licensee retail store ("LRS") wholesale purchase discount rate will increase from 13% to 16%. This new rate will apply to all products shipped on or after January 28, 2007.
Of the Fund's 66 stores, seven are located in British Columbia. As a result of this announcement, the Fund anticipates, based on historical results, that the net effect will be an approximate 10% improvement in overall EBITDA following the effective date of the increase in the LRS wholesale purchase discount rate.
"We are pleased with the BCLDB's announcement, as the increase in the purchase discount rate enhances our overall operational flexibility, and is expected to increase our gross profit," said Dr John Mather, President and CEO, Liquor Barn GP Inc. "As a result of this increase, we are better positioned to invest in initiatives to drive organic growth, while remaining focused on our strategy to grow unitholder value by pursuing accretive acquisitions within Alberta and B.C."
The BCLDB regulates the importing, distributing and retailing of liquor in B.C. The BCLDB acts as the sole importer of liquor products into B.C. and purchases product from suppliers and manufacturers in B.C., other provinces and other countries. The Fund purchases the majority of the products it sells in B.C. from the BCLDB's distribution centers.
About Liquor Barn Income Fund
Liquor Barn Income Fund is a publicly traded Canadian Income Fund that owns a 60% interest in Liquor Barn Limited Partnership ("Liquor Barn"). Liquor Barn, which currently operates 59 liquor stores in Alberta and seven in British Columbia, is a leading operator of private retail liquor stores in Western Canada. The Fund's Units trade on the Toronto Stock Exchange under the symbol LBN.UN. Additional information about Liquor Barn Income Fund is available at www.sedar.com and www.liquorbarn.ca.
This news release contains forward-looking statements. These statements relate to future events or future performance and reflect the expectation of the Fund regarding its growth, results of operations, performance and business prospects, and opportunities and trends affecting the retail liquor industry. Such forward-looking statements reflect current beliefs of management and are based on information currently available. Prospective investors can identify many of these statements by looking for words such as "believe", "expects", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words or the negative of these or other comparable terminology. A number of factors could cause actual events or results to differ materially from the events or results discussed in such forward-looking statements. In evaluating these statements, prospective investors should specifically consider various factors, including the risks outlined under "Risk Factors" in the Fund's prospectus and other regulatory filings, which may cause actual events or results to differ materially from those contained in any forward-looking statement. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Any forward-looking statements included in this news release are made as of the date of this news release and the Fund assumes no obligation to update or revise them to reflect new events or circumstances.