Jim Pattison has broken a longtime aversion to investing in alcohol-related businesses by buying the three-location Everything Wine chain and two Libations liquor stores from Vancouver businessman Paul Clinton.
The Jim Pattison Group owner’s interest in Everything Wine came after Clinton approached Pattison representatives about leasing space next to Save-On-Foods grocery stores in Alberta.
“Alberta is where the company needs to grow,” Clinton told Business in Vancouver August 9. “But you need access to good locations. The [private liquor sales] market is much more penetrated by the private sector than it is in B.C.”
Alcohol sales are increasing faster in Alberta than in B.C.
Canada’s largest private liquor retailer, Liquor Stores N.A. Ltd. (TSX:LIQ), reported August 8 that in the first six months of 2011 its Alberta same-store sales rose 4.4% compared with 1.3% in B.C.
Clinton approached Pattison because his Save-On-Foods grocery chain is one of the rare Alberta grocers that doesn’t own private liquor stores.
“Loblaws has their own liquor stores. Safeway has their own liquor stores. [Central Alberta] Co-op has their own liquor stores,” Clinton said. “Save-On-Foods didn’t own liquor stores, so their grocery centres or shopping centres were potentially an interesting place to locate Everything Wine stores.”
Clinton is pursuing new business opportunities, but longtime general manager Trent Anderson will stay at Everything Wine. Clinton launched Everything Wine when he bought three small wine stores – and their rare wine-only licences – from the Mark Anthony Group in April 2007.
He then promoted a new warehouse concept for wine sales by opening the largest wine stores in the province, including a 12,000-square-foot location in North Vancouver.
He then marketed his products with full-page newspaper advertising that highlighted promotions such as a 5% discount on a 12-bottle case that includes any mix of wines.
The wine-only licences are key to Everything Wine’s business strategy, because they give the company deeper wholesale wine discounts than most private liquor stores get from the British Columbia Liquor Distribution Branch (BCLDB), which is the province’s monopoly liquor supplier.
The BCLDB gives private retailers various discounts off its suggested retail price.
Twelve wine-only stores were granted licences in the mid-1980s, and their owners get discounts totalling more than 30% off the BCLDB’s suggested retail price.
Most of B.C.’s private liquor stores, including Libations, get a 16% discount off BCLDB prices, but, unlike the 12 wine-only stores, are allowed to sell beer and spirits.
Pattison notes on his website that the “Jim Pattison Group does not invest in, or desire to own, businesses associated with gambling/gaming or liquor/wine/spirits.”
That dictum likely stems from his Pentecostal upbringing and personal preference as a teetotaller.
Pattison was unavailable at press time to tell Business in Vancouver why, at 82, he’s finally dipping his toe in the booze business.
Wine retailers contacted by BIV said Pattison’s involvement in their industry is unlikely to affect them much. But John Clerides, who owns both a wine-only licence and Marquis Wine Cellars on Davie Street thinks it could prompt the B.C. government to loosen regulations to allow private B.C. beer, wine and spirit stores to sell more groceries.
Currently, those stores can sell:
- soda pop, but not milk;
- beef jerky, but not bricks of cheese; and
- bags of chips, but not bread.
“Jim Pattison I don’t think will put up with the small-mindedness of the current and historical policies of the BCLDB,” Clerides said. “There are going to be some changes down the road.”