Monday, September 29, 2014

End Moratorium on LRS Licenses to Stop Exodus From Rural Areas - Quick, Easy Fix

I don't know why it took so long for people to figure out the negative impact the elimination of the "no more than five kilometre" rule for the buying and relocating of private liquor store (LRS) licenses would have on rural areas in BC.

In Friday's Vancouver Sun, an article appeared with the headline "Liquor licenses being sold in anticipation of new rules" which has caused a bit of a stir in some rural communities and among those who are interested in the BC retail alcohol industry.

This is not really breaking news as this situation has been bubbling and boiling for months now, even before the change to the BC liquor laws concerning relocating LRS licenses was announced last March by Liquor Control and Licensing Branch (LCLB) General Manager, Douglas Scott.

The old policy (which is still in place until some time next year) states that a LRS license can be sold and relocated, but that the new location can be no more than five kilometres from the old location. This ensured rural areas would not be abandoned and that there would not be an over-concentration of LRS locations in urban areas. The new policy, which is set to come into effect sometime in 2015, states that LRS licenses can be purchased then moved anywhere in BC, as long as they are not moved to within one kilometre of an existing LRS, government liquor store (GLS) or rural agency store (RAS).

My immediate thought at that time of the announcement was that LRS owners in smaller, rural areas, where commercial property is much cheaper than in urban areas, must be ecstatic as the value of their businesses just skyrocketed. In fact, before the announcement was made, I know there were big city types sniffing around in my town of Powell River, attempting to buy existing LRS locations and I do not think they were planning on leaving the big city for the fresh air and ocean views of the Sunshine Coast.

Obviously they were in the know and had been tipped off that this change was coming and they were trying to get in before the LRS prices trended upwards in the hinterlands of BC.

I remember sitting in my local, The Red Lion Pub, one of the LRS locations mentioned in the Sun article, discussing this fact with friends over a beer just after I had heard the planned law changes. It was as plain as day to me that sharp business folks were going to shop about in cheaper rural areas to buy LRS licenses and then move them out of their communities to more lucrative urban markets. The big city purchasers of these licenses do not care that the locals in the small communities are getting screwed and will be highly inconvenienced by the moving of their local LRS.

It was also obvious to me that smart LRS owners were going to increase the price of their businesses, if they were looking at selling, or be tempted to sell as their business was suddenly much more valuable and desirable on the market. LRS licenses are already a much-coveted commodity due to the moratorium on granting new licenses in BC and with the new policy, a LRS in Smalltown, BC was closer in value to those in say Vancouver, due to the fact that there were far less restrictions on relocating them.

This inflated value of all LRS locations and the and exodus of same from rural communities can all be blamed on moratorium on granting new retail liquor licenses. I see the solution to this problem as being quite simple - if a LRS license is sold and relocated more than a kilometre away, allow for another LRS license to be approved for the location where the license was moved from to replace that service for local consumers. The policy could stipulate that the new license could not be tied to anyone who had a financial stake in the license which had been sold and relocated to stop people from just opening up LRS locations and flipping them to those who want to relocate that license. The government could even put a stipulation that the new LRS license could not be relocated for five years...Hell, make it 10 years!

The Union of BC Municipalities (UBCM) should have been yelling loudly at the government during their recently held convention but they were too distracted by the more pressing issues of saving rural, coastal communities by trying to right the BC Ferries shipwreck.

I think that allowing LRS licenses to be relocated anywhere in BC is not a bad decision, provided the government allow for the replacement of that service in the community the LRS is moved from.

As I have said in the past, BC liquor policy needs to make sense for all of British Columbians, not just those who live in urban areas.

Small BC communities are already struggling to attract and hang on to viable businesses and this stupid, short-sighted change to liquor policies is going to do just the opposite by encouraging small town business owners to flog their LRS's at falsely-inflated prices, to those who have no plan to keep that business in an area where it is much needed. Once again it is the consumers who are getting shafted by the BC Liberal liquor law reforms - specifically the consumers in rural areas. Like with the increase in the minimum drink price, which has impacted many rural areas negatively by driving the price of beer up, those who are drafting the new policies did not look at the impact this would have on British Columbian alcohol consumers outside urban areas.

Or if they did, the Liberals simply did not care that rural consumers, who already have limited choices, would be further limited and their communities without a successful business which provided  much-needed employment and services.

I cannot blame those who own LRS locations in small towns or those who wish to buy these licenses and move them. They are business people trying to maximize their assets. They are doing nothing shady or illegal. They are doing what is allowed under the law.

Those owners in small communities will have to deal with the fallout of selling what potentially could be the only LRS license in the area which would leave their neighbours and those they bump into on a daily basis without an outlet to buy booze outside of the local BC Liquor Store's restricted hours or the limited selection at the local rural liquor store (RAS) if there is one. But some cold stares and snide comments will be a little easier to take for these business folks due to the fact they probably were paid far more than they ever imagined they would get for their business.

Lift the moratorium and this all goes away. Those wishing to sell can still make a pretty penny for their businesses to be bought and relocated but at least there would be a mechanism in place for consumers in small towns to be somewhat protected.

No comments:

Post a Comment