BC Liquor Updates: Separation of BCLDB Retail from BCLDB Wholesale
December 1, 2014 § Leave a comment
Along with wholesale pricing (see: Wholesale Pricing, & Wholesale Pricing Premium Products) the government and the BCLDB announced the separation of BCLDB Retail from BCLDB Wholesale. For those not in the industry, this may not seem like a major step, for those in the industry, this has the potential of being a game changer.
I have been in this industry for over 20 years and there is only one thing true about changes to the industry, they are evolutionary rather than revolutionary. The separation of LDB retail from wholesale is a big step in the evolution of the industry. Afterall no one in their right mind would suggest that it is a level playing field if one player was not only in charge of pricing, selection and distribution, but was also competing as a retailer.
So what details were released about this separation? None, which gives me a blank canvas to list what it would mean to me, so I will start with how it works today and contrast that to how it should work if the playing field were to truly be level.
Right now every product, whether made in or imported to BC must first be registered and approved of by the BCLDB regardless of what the market plan for the product. What this means is that BC LDB has veto power over products that are not intended for their own stores, even if the product has been specifically purchased by a private retailer or restaurateur for their own operation only.
At present the only way a private retailer can prevent other retailers from getting a product is by buying it all, however BCLDB retail can apply a ‘cross-dock’ over any product which prevents anyone but the LDB from buying that product. This embargo can last months if the BCLDB decides so. The LDB does this every year with the Bordeaux and Whisky releases.
Distribution & Inventory
At present every BC Liquor Store in the province can see the inventory levels of every product in the province; how many cases are at the LDB Warehouse, how many cases are at the agent’s warehouse and how many cases are ‘on the water’. Private retailers don’t have access to this information.
Upon the release of a new, highly anticipated item(s) such as the new raft of coolers and ciders that come out every Spring, BC Liquor Stores orders get priority over private store orders. Private store orders will only get filled after all the BC Liquor Store orders get filled.
BC Liquor Stores use a different computer system. Theirs is tied into LDB Wholesale and thus they can effectively create back orders. Private stores can not do the same.
A caveat: Publically the LDB has always stated that Cross-Docks, Priority Shipping, and ‘Back Orders’ don’t exist, however in practice they do and the current system allows the possibility for them to happen.
At present Portfolio Managers have access to sales data for every product in the province, including those that they don’t currently carry. This gives the LDB an unfair advantage and makes many a private retailer uneasy. It has happened all to often where the LDB suggests to an agent that they should drop a sku from BC Liquor Store shelves in favour of an item that is currently exclusive to the private sector. Can you imagine if Save-On Foods had access to all of their competitors sales and pricing data?
The hope is that with the separation of BCLDB Wholesale from Retail, that the goose and the gander will be treated the same way and have the same levels of controls and access to data. If this is to be the case then the only difference between the BC Liquor Stores and private stores would be their ability to meet and exceed their customer’s needs, full stop. That is something worth working toward.
Let me know your thoughts and may quality ever fill your glass.
The Dork Uncorked.