Victoria's private liquor stores worried about government stores

Some private liquor-store operators in Greater Victoria are worried about tougher competition from government-owned establishments.

Stacey Brennan, manager of the 10-year-old Hillside Liquor Store on Shelbourne Street, says her store has seen purchases decline by 15 per cent since April. That’s when rules changed to allow provincially owned liquor stores to operate on Sundays and holidays and for extended hours. They are also now allowed to sell refrigerated products.

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While some private operators say they have developed niche markets that allow them to compete, or that they are located a considerable distance from government liquor stores, others are worried.

Brennan’s store, which has 22 employees, is competing with a government liquor store that opened across the street in November.

“I hire a lot of students and they are worried that because they are part-time, they will get cut,” Brennan said.

That hasn’t happened so far and the store has a loyal following, she said. “Service and product selection is where we can really stand out.”

The store has also removed its “chill charge,” a markup for cold beverages, Brennan said.

The private sector has spent millions of dollars establishing its businesses, said Jeff Guignard, executive director of the Alliance of Beverage Licensees of B.C., which has more than 300 members.

Yet on Sundays, when B.C. liquor stores are open, they eat up about 25 to 35 per cent of the sales of nearby private liquor stores, he said.

About 30 of the 196 provincially owned liquor stores were open Sundays prior to April, he said. That’s now up to about 150, Guignard said.

Some members located near government liquor stores have said that since April, sales dropped between 10 per cent and 15 per cent, Guignard said.

The changes have come as the liquor wholesale pricing structure has changed, and stores are facing more competition from sales of wine in grocery stores, he said. Other jurisdictions have seen wine sales fall up to 75 per cent when supermarkets move into that market, he said. “No one competes like grocery stores do.”

As far as private operators, “a lot of them are scared that they are going to go under,” Guignard said.

But Stephanie Smith, president of the B.C. Government and Service Employees’ Union, applauded the rule changes and said the union has been calling for them for years.

“We’ve always said there’s an opportunity for revenue generation through our public liquor stores. This is money that is used to support good public services like education and health care.”

The challenge is to ensure provincial stores remain viable and competitive, Smith said. “These are good family-sustaining jobs and in some communities, those are very, very hard to come by.”

Glen Barlow, part owner of Cook Street Liquor and B.C. Wineguys on Cadboro Bay Road, said the Cook Street store’s distance from a provincial outlet works in its favour.

Barlow’s stores carry many products that the government stores do not, he said. “That’s our market niche.”

The bigger issue is the new wholesale pricing model, he said. Private liquor stores can’t afford to sell their products as close to the wholesale prices as the government stores can, he said.

Ron Cheeke, who, with wife Diana, owns the 14,000-square-foot Liquor Planet on Millstream Road, said provincial changes have not been fair. The couple invested more than $6 million into their business, he said.

“They are not making it easy for us, the individual liquor stores, to compete,” Cheeke said.

Graham Haymes of Four Mile House pub, brewery and liquor store is also insulated by the distance from government stores.

The Four Mile liquor store is at 1505 Admirals Rd. and a second one is opening in June at 310 Goldstream Ave., he said.

Haymes said his strategy is to provide good service and competitive prices, and offer as many cold beverages at shelf prices as possible.

cjwilson@timescolonist.com

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