John Clerides says that running one of B.C.’s approximately 700 private liquor stores isn’t easy.
“The antiquated rules and regulations in this province stifle employment, they stifle creativity and they stifle growth in my industry,” said Clerides, who opened his Marquis Wine Cellars on Vancouver’s Davie Street in 1986. “The government is my No. 1 competitor and – guess what? My No. 1 competitor makes the rules that I have to operate under. It just doesn’t make sense … I feel my business slipping away.”
He’s not the only one feeling tapped dry by the tight parameters imposed by the BC Liquor Control and Licensing Branch on licensee retail stores.
“We have to buy our product from the Liquor Distribution Branch [LDB],” explained Brian Riedlinger, owner of Sailor Hagar’s Pub and Liquor Store in North Vancouver. “We get a discount, but it’s not enough that we can compete head to head with the LDB, so we end up having to charge more for our product than they do. That certainly isn’t good for business.”
In fact, a survey of 17 private liquor stores in Victoria conducted in 2009 by the BC Government and Service Employees’ Union (BCGEU), which represents staff at the province’s nearly 200 government-run BC Liquor Stores, found that prices on beer, wine, coolers, cider and spirits at private outlets are up to 35% higher than those charged at government stores.
At the time, BCGEU president Darryl Walker said the results were surprising given the advantages the provincial government provides private retailers.
“The Campbell government gives private operators a generous 16% discount when they purchase their stock from the LDB, yet private-store prices remain excessively high,” Walker stated in a news release. “Clearly … public liquor stores offer the lowest prices by far and the best value for consumers.”
However. Clerides explains that he would, effectively, have to cover his bills and pay his staff on a 16% margin if his prices weren’t higher than government stores.
“Considering that most retail businesses work on a 100% markup, that’s simply not possible,” he said. “So, not only do the government stores have a competitive [pricing] advantage, they also make money off the sales of product to the private stores.”
Kim Haakstad, executive director of the Alliance of Beverage Licensees of BC (ABLE BC), agrees the issue isn’t so cut and dry. The alliance is the industry advocate for issues affecting pubs, bars and independent liquor stores throughout the province.
“The word ‘discount’ is a bit of a misnomer in that, like any retailer, private liquor stores are simply purchasing product from a wholesaler or supplier who, in this case, just happens to be the government,” she said. “The government may sell product to us at a ‘discount,’ but they obviously don’t sell it to us at a loss.”
While the picture painted on the private side may seem bleak, Haakstad, Riedlinger and Clerides all say that independent liquor retailers do have an ace up their sleeve when it comes to competing with government-run stores.
Make that three aces.
“Chill, convenience and choice … the three Cs,” said Haakstad. “We can provide cold product in convenient locations that are often open later and longer than most government stores. And because we are, essentially, small businesses run by small-business owners, we look at things a bit differently [than on-site managers that run BC Liquor Stores]. So a private liquor store downtown versus a store on Dunbar versus one on Main Street – each is a bit different and carves out its own unique niche. Government liquor stores are all the same, no matter where you go.”
“Just about anything we can do to build up customer loyalty, we’ll do, from giveaways to rewards programs to getting in the products they want, being attentive and responding to their needs,” Riedlinger added. “We don’t try to compete on pricing because we can’t; we just offer later hours and cold product and try to react very quickly to customer needs.”
“We care. Full stop,” Clerides agreed. “We care about our customers and about the wines that we recommend and sell. We care about making sure every person who walks through our doors walks out happy and satisfied. It’s all about customer service in this business. If you don’t do that, well, you’re dead.”