Gov't Seems to Have Gotten It Mostly Right With Tied House Changes

On Feb 08, Rich Coleman, the cabinet minister responsible for the province's alcohol portfolio, sent out a news release announcing several significant changes to the BC's liquor laws, including the relaxation of the tied house laws.

The tied house law reforms had been highly anticipated by some, who were hamstrung by the restrictions, and feared by others who were worried that complete deregulation would give deep-pocketed breweries the green light to buy licensees and cut out the smaller, craft brewery competition. 

But for once, it looks like the government got it right, stating in their news release, "(t)his change provides small and medium winery, distillery or brewery owners that also own an off-site restaurant or pub the freedom to serve their products in their establishments, which they were previously not allowed to do." The communique went on to explain manufacturers would only be allowed a maximum of three tied-house agreements and that these tied houses would be, "required to carry a variety of products from different suppliers to avoid particular products being favoured," thereby limiting any large manufacturers attempts to squeeze out the competition.  I know some do not think the legislation changes went far enough, as some manufacturers have more than three tied houses and would like to sell their products in all their off-site locations, but most seem satisfied.

Changes were supposed to take effect March 1st, but before you go rushing down to St Augustine's in hopes of enjoying a sleeve of Parallel 49's Vow of Silence or Lord of the Hops, be advised that there is an application process which, according to a communication from the Liquor Control & Licensing Branch (LCLB), will take 6-8 weeks to process. March 1st was the first day the LCLB werre taking applications so we are still a few weeks off.

LCLB Policy Directive, 13-03 explains all the details of the tied house changes, including the only negative I can see to the legislation that classifies medium-sized breweries as being those whose annual production up to 300,000 HL, which is a whole lot of beer and allows for breweries like Pacific Western Brewing to take advantage of the changes. The restriction of only three tied houses and the need for beers from competition basically stops in its tracks any attempts at BC beer domination by the bigger breweries.

The LCLB have stated there are no hidden criteria and what you see with the policy directive is what you get. The application process was a bit of a surprise for some, but not surprising as the LCLB is a bureaucracy and bureaucracies need paperwork and application fees to live. 

And obviously it is a great way to ensure that no one brewery tried to sneak past the three tied-house limit via subsidiaries or other nefariousness means and that they are indeed offering up the a variety of beers including those of some of their competition. 

I do know Parallel 49 has already applied so lets hope we can be enjoying their beers at St Augustine's by mid April. I, for one, want to be there to drink from the first tapped keg/cask for the historic moment in BC liquor history.

Gov't Announces Liquor Law Changes That Could Benefit Craft Beer Consumers & Industry

Today, Rich Coleman, the minister responsible for the province's alcohol portfolio, announced some long anticipated changes to BC liquor laws, many of which have a direct impact on the craft beer industry and craft beer related licensees.

In a press release issued today from Coleman's office, these are the changes I see as having the most impact on the craft beer consumer:

•  "Small- and medium-sized liquor manufacturers"  to have "three common ownership and business relationships with licensed establishments located off their manufacturing site." Translation, tied house laws have been relaxed and you will soon be able to enjoy Parallel 49 beers at St Augustine's come March 1/13.
•  ""Brewers and distillers now can apply to have an on-site consumption area such as a lounge, tasting room or event area." Translation, beer lounges at breweries are not far off.
• "Rules around how liquor manufacturers can promote their products in bars and restaurants have been simplified by removing the requirement for a buy-sell agreement." Translation, breweries can now buy tap and shelf space legally and bars restaurants will be able to demand inducements for the right for a brewery to sell their product via the licensee.

These changes are to take effect March 1, 2013. Some of the wording is somewhat vague, for example, what is a small-and-medium sized liquor manufacturer in regards to a brewery? 

My assumption is that they mean breweries who produce less than 160,000 Hectolitres per year, which means the big boys like Molson and Labatt cannot have tied houses. What is yet to be seen is whether Granville Island, owned by Molson, will be able to have three tied house arrangements, thereby giving Molson a way through the door.  But even if this is the case, the press release goes on to explain that tied houses must also "carry a variety of products from different suppliers to avoid particular products being favoured," meaning they cannot shut out the competition in these licensed establishments.

Another question I have is how is how difficult are the government going to make it for breweries to have on-site beer lounges, which are essentially liquor primary licenses. Does that mean over-19 years old allowed only? What hoops will the brewery have to jump to get these licenses? This is the most significant of all the changes for craft breweries, in my opinion as now small nano-style breweries can operate and exist without ever having to distribute their beer. Growler fills and bottle sales from the tasting room-lounge combined with lounge revenue could be enough for these smaller breweries, with no plan to expand, to exist. This is, as far as I understand, the business model for Brassneck Brewery, who, under the new laws, could also offer their products at the Alibi Room due to the tied house law changes (Brassneck and the Alibi both have Nigel Springthorpe involved in ownership).

I am going to dig more and talk a bit more about how these changes could impact the craft beer scene come March 1, 2013 after I do some digging and reflecting on the announcement. As with everything announced by this government, I will wait until the fine print is produced to see just exactly these changes mean. The BC Liberals have a habit of making announcements that look to be making big changes to liquor laws when in fact, they are little more than tweaks and minor adjustments when the full extent of the changes are understood.  

How A Craft Brewery Inspired a Small Town

Sometimes those of us who live in the Greater Vancouver and South Vancouver Island areas take it for granted we can get craft beer almost everywhere these days. I am more often than not pleasantly surprised to find at least one or two good beers on offer as a result of the craft beer craze. It seems that most licensees in these areas have finally clued in that craft beer drinkers have money, will spend it and will specifically seek out and support licensees that offer good beer.

But for the majority of BC beer drinkers the reality is that fizzy, almost-tasteless, macro-brewery lagers, not to be confused with small-batch, craft lagers, still rule the roost and despite the fact that domestic craft beer sales are increasing constantly in the province and now have approximately 15% of the market share, the majority of those craft beer sales are concentrated in the Greater Vancouver and Victoria areas. The boundaries of the craft beer-friendly areas are expanding slowly but most rural and isolated areas are still devoid of good beer and when I head out of town I still carry my small vial of hop oil with me just in case I find myself in a craft-beer-free zone.

A few years back, good friends of mine, Bernie and Debbie, moved to one such community where commercially produced craft beer was virtually non-existent. Powell River, due to its geography, is a difficult place for small craft breweries to distribute to therefore few, if any, had attempted to break into the market in the area known as the Upper Sunshine Coast. The big breweries were uncontested except for a few craft beer offerings in the liquor stores.

To give you a little bit of a back story, Bernie and Debbie are from from England and Bernie, an early supporter and member of CAMRA UK in the 1970's, is an avid real ale lover and has been drinking real ale for, well, lets just says decades. When Bernie first moved from England to Squamish seven years ago, he baffled the realtor when he said he wanted pubfront property, not oceanfront or lakefront property like everyone else. He made the same request and got the same baffled expression from the realtor when moving to scenic Powell River a few years ago but he and Debbie managed to find a beautiful home just down the road from a wee neighbourhood pub called the Red Lion.

Unfortunately, this pub, like all pubs in Powell River at that time, had no real ale or craft beer. To help make the beer that was on offer palatable, Bernie used to have a small whisk on a lanyard which he took to the pub and he would vigorously whisk his fizzy lager to get rid of some of the unnecessary carbonation, much to the amusement of the pub staff and other patrons. The practice, which Bernie started when he could not find craft beer options in Squamish, caught on with some as they found Bernie's small trick actually helped make the beer more drinkable.  

Last year, Bernie and other craft beer lovers who live in the Powell River area were able to put their whisks away when Townsite Brewing opened their doors and began supplying the area with a locally- brewed, craft beer alternatives to mainstream lagers. Townsite made their first keg deliveries in March, 2012 and in less than a year they have changed the local beer scene. Townsite beer is virtually everywhere. Locals like Bernie and his friends have embraced the craft beer option with open arms.

One story that is told in the Red Lion Pub that illustrates how much some of the locals have taken to craft beer is that one evening when Bernie and his friends were having a few jars the keg of Townsite beer blew. The pub owner told them they would have no more Townsite on tap until delivery the next day. Whiskless and in horror that they might have to switch to a less desirable macro-lager, Bernie's pal Don took matters into his own hands, phoned up the brewery to see if they could help out and about 10 minutes later a keg of Townsite Suncoast arrived prompting Bernie and Don to get on their hands and knees to bow down and worship the arriving keg as it was wheeled into the pub.

This immediate acceptance of craft beer in Powell River has even surprised Townsite owner Karen Skadsheim who had some idea that craft beer was well overdue on the Upper Sunshine Coast, but who admittedly may have under-estimated just how much locals desired options in regards to beer.

"I have to confess that I was surprised at how quickly people around here took to it," wrote Skadsheim in an email to VEBB.  "I knew there were craft beer lovers in Powell River, but I fully expected a learning curve for most folks and sure, lots of people didn't know what craft beer was but as soon as you explained it and gave them a taste, they were converted. We got a lot of people, often, it must be said, women, who said 'I don't like beer, but I like this'."

I saw first-hand how excited locals are about having access to good beer when I went up to Powell River a few weekends ago to visit Bernie, Debbie and attend the Craft Beer Tap Takeover at the Red Lion. The event was sold out as local craft beer lovers paid $10 a ticket to get in to sample beers from Driftwood, Howe Sound, Parallel 49, Tofino Brewing and of course Townsite. It was a great event and most of the kegs were drained that night by the enthusiastic crowd who were ready to party. There were many who had never heard of the out-of-town breweries and a few who didn't find the craft beers to their liking, prompting them to switch to mainstream lagers, but I can say that I have seen that here in craft-beer crazy Vancouver at the Railway Club where, during a CAMRA Vancouver Harvestfest,  I saw a few Railway regulars ignore the cask beers on offer and go straight to their usual bottles of mainstream swill.

There is no accounting for good taste, or lack thereof, I guess.

Even more impressive than the sold out Tap Takeover was the fact that the next night the Invitational Brewers' Dinner, a food-beer pairing event featuring some of the same breweries, sold 54 tickets, at $50 a pop, exceeding their capacity of 50 people. I know this is commonplace here in Vancouver but you have to remember that there was virtually no craft beer, if any, in Powell River only one year ago and events such as the tap takeovers and beer-food pairing dinners are definitely not the norm and how they would be accepted was an unknown to organizers.

According to the Sunshine Coast-Powell River NDP MLA Nicholas Simons, Townsite Brewing has done more than just offer great beer to locals. While we were guests chatting about craft beer and liquor laws on CJMP FM Community Radio's "Every Day is Like Sunday" radio show, Simons told me off-air that the brewery's success has been "an inspiration" to many in the Powell River business community and has shown others that a small, unique business can succeed, flourish and grow in area. He stated residents are "proud" of the brewery and how they have been able to become an integral member of the community while putting Powell River on the craft beer map.

One way Townsite have endeared themselves to locals has been their practice of donating $1 for every growler sold to different charitable organizations in the area.

"Because growlers are such a local thing, we decided to keep some of that money helping the community," wrote Skadsheim.  "I am very proud to say that in just eight months of growler sales, we've given more than $6000 to help groups like The Powell River Food Security Project, The ORCA Bus, Skookum Food Cooperative, CJMP Community Radio, The Bruce Denniston Bone Marrow Society and many others," wrote Skadsheim.  

The success of the growler sales and the amount of money Townsite has been able to donate to charities is also a bit of a shock to Skadsheim.

"As with craft beer in general, I thought growlers would be a learning curve and sure, not many knew what  they were before we opened our doors but as soon as we explained growlers, everyone said 'What a great idea!  I'll take two'," she said. Luckily for her she had read an article by Joe Wiebe which mentioned the success of the Tofino Brewery's growler sales so she doubled her order of growlers before starting sales.   

All of this community pride and acceptance of craft beer warms my heart as I am looking to locate my family up in Powell River sooner than later. Knowing that I will not have to take a supply of hop oil with me, or not have to purchase a small whisk, makes the decision to head to a small town that much more easier. 

And knowing there are a growing number of craft beer enthusiasts and characters like Bernie up there means I will not have to look far to find like-minded people and stay wired into the BC craft beer community. I think the community of Powell River is ready to expand to craft beers from other breweries as the local beer lovers are obviously showing a desire to branch out and deserve access to more of the great beers brewed here in BC. Townsite has blazed the trail and established themselves as the local favourites, who the locals will support loyally, now it is ready for others to follow. Who knows, you may even see a CAMRA Powell River branch pop up before the end of the year with yours truly in the mix if my family does indeed relocate there.

You know I won't be able to resist...   

Cascadia-gate - Is This Really a Consumer Issue?

I don't think I have ever seen a reaction as fierce and as widespread to any issue related to the local craft beer scene as I saw this past week in regards to what I like to now call Cascadia-gate.

It seemed, with some of the posts and comments I read on Facebook, reddit, etc., that some craft beer consumers took it personally that the term Cascadia had been trademarked in regards to "brewed alcoholic beverages namely ale and lager...beer, malt liquor, stout, porter and lambic".

But, to tell you the truth, I don't really understand some of the venom and, quite frankly, the mob mentality that ensued after Barley Mowat posted the story. It was great to see those passionate about craft beer in BC finally band together and get vocal, and the force of their actions did prompt Steamworks to respond, even if that response was perceived by many to be inadequate and insincere, but really, how does this issue impact the consumer? Why all the anger, rage and name calling? If you read many of the comments and posts, when they were available to be read, it was obvious that some of those writing them really had no grasp on what this whole issue was about.

Yes, this story did warrant a response from those of us who are involved in the local craft beer community and/or passionate about their craft beer. And I applaud those who offered their opinions in intelligent and constructive ways, letting Eli Gershkovitch, owner of Steamworks, and his "Steam Team" know they were upset with Eli quietly telling local breweries, for reasons only he really understands, to stop using the term "Cascadian" Dark Ale (CDA). But, let's face it, he was not telling them to stop brewing that particular style of beer or impeding consumer access to CDAs. No, just last night I drank some North Shore Black IPA, brewed by North Vancouver nano-brewery Bridge Brewing Co. Black IPA is another term used to describe CDA. A few weeks back I enjoyed Parallel 49's  Black Christmas , described, a little tongue in cheek, by P49 as a Christmas Dark Ale (CDA) due to the trademark hubbub which was common knowledge among the local craft industry even before Chuck posted his original "The Grinch Who Stole Cascadia" story.

The Black Christmas and North Shore Black IPA ales may have been described in different terms, omitting the term Cascadian, but, at least in my humble opinion, they are in fact CDAs. And it shows that local breweries are already finding ways around the trademark issue. Just labeling a beer as a CDA, without spelling it out, will alert consumers that the beer is a Cascadian Dark Ale. Those looking for that style of beer will know what CDA means and those who don't probably will not know what a Cascadian Dark Ale is and would have to ask for an explanation anyway.

It is one of the reasons I, as CAMRA Vancouver President, have not come out with an official stance on the whole issue because I do not see this as a consumer advocacy issue. As president, I can say CAMRA Vancouver would like to see craft breweries working together to increase their share of the market place so that we, the consumers, have greater access to more craft beers, but whether that beer is called CDA, Black IPA, or something different, is a battle for others to fight. This is an industry-related conflict, one that, brewer's associations representing the breweries and homebrewing groups may want to tackle as they are the ones brewing and naming their beers CDAs.

No, I personally don't agree with Eli that he should be able to protect his trademark in relation to other breweries using the term Cascadian Dark Ale and I voiced that opinion to Walter Cosman, President of Steamworks Brewing Company, last summer. As pointed out by Chad on his blog Hoplog, used in that way, Cascadian is a descriptor for a style of beer. If breweries were calling their beers Cascadia Lager, or Cascadia IPA, I could see Eli's point, but when they are using Cascadia in reference to describing the CDA style, I think the trademark infringement has no traction. Cascadia Dark Ale in that sense is like using lager, stout or India Pale Ale. Many breweries are now trademarking the names of their beers to protect their branding. But protecting a brand and protecting a term that describes something, in my opinion, are two different things.

But what do I know about the law and my opinion obviously is not one Eli Gershkovitch agrees with.

And no, I personally don't buy "Team Steam's" assertion that Eli's actions were, "the best course of action so as to preserve  the integrity of the name 'Cascadia' for true craft breweries not for large multinational breweries." And no, I did not buy the spin put out in the response from Steamworks painting the picture that Eli and Steamworks are David fighting the evil Goliath, in the form of Molson Canadian, or that Eli is the benevolent but misunderstood defender of the craft beer community who, out of the goodness of his heart, would allow other craft breweries to buy the license to use his trademarked term Cascadia. 

I do hope Eli finds a way to save face and back down on this whole issue and I think opposition from other craft breweries and consumers in general is essential, but I would ask that if you are voicing dissent you do it in a constructive and respectful way. Calling Eli names and making statements like "Steamworks suck" on-line is only going to anger him and make him dig in his heels. But if enough people send him well written and well-thought out, intelligent communications about why what he is doing is wrong, maybe, just maybe he will see the light and truly act in good faith as a stand-up member of the BC craft beer community. 

In the meantime, we as consumers can continue, unimpeded, to enjoy our CDAs even if the breweries do not use the term Cascadian Dark Ale until this whole issue gets cleared up.

Tied House Laws Revisited - Middle Ground May Be the Way to Go

With the recent opening of East Vancouver's Parallel 49 Brewery, the dilemma of whether or not to relax the tied house and trade practice laws has once again become a topic of discussion in Vancouver and BC craft beer circles.

For those not familiar with what tied houses and trade practices are, "a tied house is an establishment that has an association, financial or otherwise, with a liquor manufacturer or its agent that is likely to lead to its products being favoured," according to the Liquor Control and Licensing Branch's Tied Houses and Trade Practices Consultation Paper, released January 2011. If a tied house situation exists, the manufacturer is not allowed to sell its alcohol through the tied house.


Trade practices laws regulate "commercial interactions between liquor suppliers and licensed establishments including restrictions on promoting specific manufacturers and their products in exchange for benefits provided by the supplier" (LCLB Consultation Paper, p.2).These trade practice restrictions are meant to stop producers of alcohol from basically bribing licensed establishments by offering freebies to them in exchange for exclusive or preferred sales deals.  

Vancouver's newest craft brewery

Because of these laws and the fact that Parallel 49 Brewery and St Augustine's Craft Brew House and Kitchen have some common owners, St Augustine's is considered a tied house and are not only prohibited from pouring Parallel 49 beers from any of its 40 taps or sell any of the brewery's bottled products, but are also prohibited from placing so much as single Parallel 49 coaster, poster, beer umbrella or any other Parallel 49 promotional swag in the restaurant. This is not an isolated problem as there are other tied houses here in BC where small breweries and wineries are being hurt by the laws that are meant to protect them.


"Quite simply I can't do any sort of cross-promotion, cross-branding, cross-anything with my 2 businesses," states Parallel 49-St Augustine's co-owner Anthony Frustagli.  

Vancouver's newest tied house

"I don't know of any other industry this applies to.  If you own a farm and grocery store, can you not sell your veggies in your store?  If you own coffee roaster and a cafe, should you not be able to sell coffee made from your beans?"

Frustagli makes some good points, but then the alcohol industry, especially in BC, is like no other industry out there in regards to unique regulations, restrictions and government control.


The existing tied house-trade practice laws date back to the 1950's and were put into place to stop the larger, national breweries from using their deep pockets to buy up pubs or bribe them in order to feature and favour their beers. The laws were meant to protect the smaller, local breweries by allowing them compete on a level playing field, but as the craft beer industry grows here in BC and more and more entrepreneurs, with varied business interests get involved, these laws, in some cases, are actually harming those smaller businesses they are meant to protect.

When asked if he felt the tied house and trade practice laws were protecting his newly-opened, craft brewery, Frustagli was not really in support of maintaining the status quo.

"Does it (tied house-trade practice laws) protect P49 (Parallel 49),  debatable," stated Frustali. "Giving the big boys the green light to open up their cheque books is a bit of a scary thought, but at the same time the rule isn't exactly being enforced right now anyway.

"I'd like to see a reasonable middle ground.  Perhaps capping a percentage of taps/bottles in your bar/restaurant/LRS that can come from your brewery/winery/distillery, and something ensuring that they are marketed competitively with other products."

This seems to me like a reasonable middle ground, allowing the alcohol manufacturer to offer their products in licensed establishments linked to them, but prohibiting them from favouring their products by mandating them to offer competitors' products at a competitive prices. This would restrict the bigger breweries from squeezing out competition by monopolizing all the taps and cooler/shelf space and still allow the smaller breweries to offer their products in these tied houses.

In my original post dealing with this issue, I came out as against loosening up the laws due to a fear that the big breweries would open up their wallets and try to stifle the competition, namely the craft beer industry, which is slowly eating into their market share here in BC. But in the past year the craft beer market, at least here in Vancouver, has changed so much, with craft beer getting support from a variety of new establishments, including unlikely sources like The Donnelly Group, The Cambie Malone's Group and Earls. I believe the smaller local breweries will have no problems finding licensed establishments that are willing to ignore the big breweries. There are just too many places committed to serving locally produced, quality craft beers and there are more and more coming on board the craft beer wagon every week. Some are motivating by money, just wanting to cash in on the craft beer craze, some are motivated by wanting to serve the best local beers they can source because, quite simply, they are superior products, but either way, more and more taps are becoming available to pour craft beer.

As mentioned above, the BC Liberal Government issued a consultation paper asking for written feedback on three proposed options to loosen up laws and/or deregulate in regards to tied houses and trade practices. Since that time, not a word has been spoken about the tied house rules. At the time when the deadline for the written submissions passed, the whole HST debacle was in full swing and the Liberals were in survival mode so "non-important" issues, like tied houses, were put on the back burner where they have seemingly been forgotten about.

 I recently asked the Liquor Control and Licensing Branch directly as to what happened to the proposed changes and received an email from a LCLB spokesperson saying, "the Province (government) is reviewing possible changes to tied house regulations that specify how liquor manufacturers can promote their products in licensed establishments. Meetings have been held with industry associations to seek their views. Results of the consultations have been mixed and the Province is continuing to review the matter."


In other words, nothing has been done. I don't know who these "industry associations" are, but I certainly have not talked to anyone who has been involved, including a few people I know who are directly impacted by the tied house rules. I spoke to one LCLB Liquor Inspector a few months back and he stated to me the government would "never" relax or change the tied house or trade practice laws, but offered no reasons as to why he believed this or where his information came from.


Let us hope that the government gets it right if they are indeed going to include these issues in the upcoming review and promised changes to the province's liquor regulations. If they choose to not make changes, small breweries like P49, who are motivating by making great beer and not by crushing the competition, will continue to be restricted by the laws that are meant to help them and if they deregulate completely, it may leave the door open for the big, national breweries, owned by gigantic, multi-national corporations, to attempt to throw their financial weight around in order to crush the craft brewing industry. 


I think even if the market is opened up completely, the local breweries are producing enough great beer and have enough loyal support to withstand the onslaught, but why even put them in that position. The government should be supporting this local, viable industry and encouraging it to grow, not stifling it or allowing it to be swallowed up by mega-conglomerate corporations.


And on a more person level, I would love nothing more than be able to walk 200 metres from my front door and enjoy a P49 IPL in my favourite local craft beer establishment, which happens to be St Augustine's.