The fate of the province’s biggest private bonded liquor warehouse may be in the government’s hands.
The April 30 request for proposals to privatize the Liquor Distribution Branch’s warehousing and distribution said the holding of imported products in private warehouses would be phased out.
ContainerWorld Forwarding Services Inc. is based in a 495,000-square-foot, 2008-opened warehouse at Port Metro Vancouver’s Fraserport logistics hub in East Richmond. Owner Dennis Chrismas founded the closely held company in 1993 with Harjeet Kaur, who remains the company’s human resources director. Chrismas acquired the Commercial Logistics Inc. trucking fleet in 2001 and opened a Kamloops warehouse in 2010.
BC Liberal insiders Mark Jiles and Patrick Kinsella have lobbied the government for seven years on behalf of Exel, which considered ContainerWorld a potential friend and foe in an October 6, 2009, internal memo obtained by Business in Vancouver.
Exel vice-president Scott Lyons’ memo said ContainerWorld would oppose privatization. He also wrote that its warehouse is expandable to 600,000 square feet, “should meet the needs of this initiative” and the firm could be acquired by Exel for an estimated $24 million.
ContainerWorld provides storage and delivery for domestic microbreweries and domestic wineries and freight forwarding “in concert with Giorgio Gori,” the Livorno, Italy-based unit of German-headquartered Deutsche Post DHL, which also owns Exel. The memo said Gori and ContainerWorld’s relationship “goes back 20 years.”
“Deutsche Post DHL holds a 100% stake in Giorgio Gori,” said the memo. “Giorgio Gori does not have an ownership stake in ContainerWorld, but has a long- standing relationship where it is understood that at some point they would purchase ContainerWorld. Exel could use this avenue to negotiate a reasonable deal” with Chrismas.
ContainerWorld’s value likely increased last August when the Gateway Program’s $23 million Nelson Road Interchange opened to connect Fraserport with Highway 91.
The memo said Exel considered using its “strong relationship” with liquor minister Rich Coleman to influence the writing of the RFP, but speculated ContainerWorld would “also be using its influence to sway the RFP in their favour or in Exel’s favour if they are onside with Exel and [BC Government and Service Employees’ Union] proposal.”
Lobbyist Mike Bailey of Western Policy Consultants registered for ContainerWorld between August 15, 2011, and December 31, 2012, to “brief officials on the benefits of maintaining the current policy and methodology regarding alcohol distribution.” Target contacts include Liberal caucus members and LDB general manager Jay Chambers. Coleman’s agenda, obtained under Freedom of Information, shows that Bailey and Chrismas met with Coleman on March 2 – 10 days after the February 21 budget announced the LDB privatization plan.
Chrismas donated $1,300 personally to the Liberals from 2007 to 2010 but contributed $36,261 via ContainerWorld from 2007 to 2011, including $500 to Coleman’s 2009 re-election.
Chrismas and Lyons were among representatives of eight companies that attended a May 10 LDB meeting for prospective bidders. Formal bids are due June 29. Coleman told reporters in Victoria on April 30 that as little as one and as many as three would be shortlisted by July 20.
Repeated requests to interview Coleman have not been fulfilled. Chrismas declined comment, citing terms of the RFP.
A University of B.C. operations and logistics professor said ContainerWorld might have an advantage.
“The plus is that ContainerWorld already has one of those distribution channels, and they have the ability to merge the two and get the economies of that,” said Garland Chow of the UBC Sauder School of Business. “What was going separately to get to the stores now could go through one channel and then they’ll split it as efficiently as possible.”
