Liquor Line. A Word from the General Manager. In This Issue...

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1 Issue v 7 Summer 2014 Liquor Line In This Issue A Word from the General Manager 2... Minors as Agents Program Update 3... Changes to Driver s Licence Numbers 3... Due Dilligence Defence 3... Serving It Right Update 4... Legislation, Regulation and Policy 4... Minors as Entertainers 4... Terms and Conditions Clarified 4... Implementation Updates Feedback Please lclb.lclb@gov.bc.ca with any comments or suggestions for this publication. Contact Information Phone (Weekdays, 8:30 a.m. - 4:30 p.m.) LCLB Branch HQ: - Toll-free in B.C.: Outside B.C.: Licensing Help Desk: Renewal Help Desk: Questions: lclb.lclb@gov.bc.ca Applications: liquor.licensing@gov.bc.ca Website Mail Liquor Control and Licensing Branch PO Box 9292 Stn Prov Govt Victoria BC V8W 9J8 HQ Location 4th Floor 3350 Douglas St. Victoria BC V8Z 3L1 A Word from the General Manager The Liquor Policy Review marks a very significant time for the liquor industry in British Columbia. Government has endorsed all 73 of the recommendations in the Liquor Policy Review Report. At the time our newsletter was going to press, 17 of the recommendations have been implemented. You can find a link to the full report and a table that tracks implementation on the home page of our website. Many of you have asked about timelines. Most of the recommendations will either require changes to policy, regulations, legislation or a combination of all three. Some are fairly straightforward and others such as the Special Occasion Licence online application process are more complex and will take more time. Government has also announced further details regarding liquor sales in grocery stores. First, a store-within-a-store model will apply to private or government liquor stores that are transferred into a grocery store. This model will allow for sales of beer, wine and spirits through separate cashiers. A second model will allow for BC wine to be sold off designated shelves in a limited number of grocery stores, and purchased at designated check-out tills. Work continues to determine further details and clearly define grocery store. Convenience stores will not be included in this definition and the current moratorium on the number of LRS licences will remain in place. Government is also in the process of eliminating the five kilometre restriction on the movement of LRS licences. The distance requirement of one kilometre between LRS locations will be kept and later expanded to include government liquor stores. Of the 73 recommendations coming out of the Liquor Policy Review, 28 will require changes to the Liquor Control and Licensing Act. Government recently passed amendments to the Act that will provide authority to implement 15 of them. The remaining recommendations that require legislative changes need additional consultation, and will require significant changes to the present Liquor Control and Licensing Act. They will be addressed during a full repeal and rewrite of the Act in Please note that until changes are implemented, the existing rules still apply. Licensees may only apply for a change once that recommendation has been implemented. In some cases we won t know exactly what the changes will look like until we ve had a chance to consult with industry and other stakeholders and prepared different options for government to consider. 1

2 Minors as Agents Program Update Preventing the sale of liquor to minors is a key public safety priority for government, given the potentially devastating consequences of underage drinking. It is also against the law to sell, serve or supply liquor to a minor. Under the authority of the Liquor Control and Licensing Act, the Liquor Control and Licensing Branch (LCLB) employs minors to test whether licensees and their staff are selling to minors. The LCLB reports out on the results of the program every April. The number of times liquor is sold to a minor continues to demonstrate the need for vigilance and ongoing monitoring. The Minors as Agents Program is the most cost-effective way to monitor compliance in this critical area. Please anticipate that your establishment will be inspected as part of the Minors as Agents Program at some point. In response to comments about the program from licensees, we would like to note the following. First, minor agents are trained to do nothing to influence a sale. For example, when in a liquor store, the minor will walk up to the counter with the alcohol and wait for the clerk to ask them for ID. If the clerk asks them if they have ID, they must respond truthfully that they do not. Second, minor agents do not use false identification. They may however, be asked to use their own identification to test how closely ID is checked and whether servers/ clerks merely glance at a person s identification or brush off the need to actually take a close look once they see the person is reaching for their identification. This is unacceptable and we will be testing this. This year has seen the implementation of new tactics. Agents now work more often in teams, e.g. 2 or 3 minors, or 2 minors and a 19 year old, and will enter an establishment and attempt to purchase liquor. Alternatively, agents will enter an establishment accompanied by adults, where either the adults or the agents will order liquor. Minor agents do not alter their appearance or change their behaviour to hide their age. In real life however, minors may attempt to hide their age when overtly breaking the law. Some may wear sunglasses or a hat or scarf. Others may avoid eye contact, speak quickly, use slang and interact with their friends while also interacting with sales clerks. As the program evolves, MAP inspections will mirror the conduct and manner of youth culture, e.g. smart phones, headwear, tattoos, youthful attire, sunglasses, etc. Overt, planned or designed attempts to obscure or distract a server or clerk, such as dressing up, costuming, or decorating minor agents, will not be permitted. If a licensee has sold to a minor during a MAP inspection, we always advise the licensee to save their CCTV tape because it is in their own best interest to do so. If a licensee believes we have acted unfairly or unreasonably in the course of an inspection, we encourage them to bring that forward. Finally, we believe the more you and your staff know about the MAP program, the lower the chance a minor will be served. We encourage you to share this information with your staff. We have reproduced this as a Fact Sheet and it is available on our website, under Latest News. We all know that the consumption of liquor by minors can be the cause of life altering events. We all understand the importance of doing everything we can to prevent these events and we want you to succeed. Please, where there is any doubt for any reason, ask for their ID. 2013/2014 BC Liquor Licensee Retail Rural Agency *Rates have not been calculated when the data set is too small Special Occasion Licence Food Primary Liquor Primary Wine Total inspections Sales to a minor Non-compliance rate 18% 22% * * 44% 46% * 28% Compliance rate 82% 78% * * 56% 54% * 72% Total 2

3 Changes to Driver s Licence Numbers ICBC is changing the way they sequence numbers on Driver s Licences and BC Services Cards. Currently, ICBC issues Driver Licence Numbers (DLN) in sequential order. For example, an individual receiving a BCDL ten years ago may have received a DLN beginning with the number 7. In January 2014, an individual receiving a new BCDL would have a DLN beginning with 9. sures in order to assess whether or not the implemented measures were performing to the standard expected. The responsibility to assert, demonstrate and prove on the balance of probabilities that the licensee was duly diligent rests with the licensee. The licensee must proactively provide documentation, witnesses, or any other matters it will rely on to prove a due diligence defence. The test is the same as that applied in determining whether or not the contravention occurred using a balance of probabilities. The more information you can provide on the steps you took to prevent a contravention, the greater your chance of proving on a balance of probabilities that you were duly diligent. It is up to you. The licensee must be able to demonstrate they have established procedures to identify and deal with problems, that they regularly test those procedures to make sure staff are following them and that problems are dealt with, and at the hearing, they are able to provide enough documentation to support this. As of May 2014, DLNs will no longer be issued in sequential order. Consequently, individuals will be assigned DLNs beginning with any number 0 through 9. This change is a result of normal business process and technical system updates. Licensees and servers may scan these numbers when checking the validity of someone s ID. They basically wanted to point out that if the numbers start to appear to be randomly assigned, that s a result of this change, and cautioned not to assume the ID is fake on that basis. Due Diligence Defence The Liquor Control and Licensing Act is what is known as strict liability legislation. Licensees are responsible for all contraventions, regardless of whether or not there was any intent to commit the contravention. However, due diligence is available at enforcement hearings as a defence if the licensee can demonstrate that he or she took all reasonable steps to put measures in place that would normally prevent the contravention from happening, and that the licensee then tested its steps and mea- We are seeing more sophisticated and thorough presentations on due diligence at hearings into alleged non-compliance. The Branch believes this is a positive step as duly diligent licensees should in most cases equal compliant licensees and that equates to public safety, which is everyone s goal. Serving It Right Update Serving It Right is British Columbia s mandatory selfstudy course that educates licensees, managers and servers about their legal responsibilities when serving alcohol, and provides effective techniques to prevent over-service. Over time, the number of people taking the print version of the exam has decreased significantly. Because of this, effective April 22nd, print exams are no longer published in the Serving It Right manuals. Users are encouraged to take their exams online; however, if necessary, print exams will still be available upon request from Serving It Right by ing info@servingitright.com or calling If you have any questions about this change, please contact dyule@go2hr.ca. 3

4 Legislation, Regulation and Policy Clarified Legislation provides the overall framework, regulations provide more details, and policy speaks to how the regulations are applied in different circumstances. Legislation is debated and voted on in the legislature by members of the legislative assembly and can only happen during those times of year when the legislature is sitting. Cabinet must approve changes to regulations and Ministers decide on changes to policy. As an example, the Liquor Control and Licensing Act states that it is illegal to sell liquor without a licence; the Liquor Control and Licensing Regulations set out the types of businesses that may apply for a licence, the different types of liquor licences they can apply for, and how much it costs to apply; policies lay out the types of information you must provide when applying for a licence. Changes to legislation often involve changes to regulations as well, once government has passed the enabling legislation. This is what happened when government created the new caterers licence last year. Government passed the enabling legislation in June 2012, regulations followed in February 2013, and the first catering licence was approved a few weeks later. Minors as Entertainers Minors are permitted in licensed establishments as entertainers under the following conditions: the establishment allows entertainment if they are otherwise not permitted in the establishment, minors may not remain in the licensed establishment, prior to, during intermissions, or after completion of the entertainment minors may remain in a manufacturer lounge or special event area prior to, during intermissions or after completion of the entertainment if accompanied by a parent or guardian minors may not be involved in patron participation contests in establishments that restrict minors 4 adult entertainment may not include minors, nor may such entertainment occur while minors are within the establishment If minors are allowed to be in your establishment you must not permit any licensed gaming events during the times when minors are allowed to be present except for licensed ticket raffles and bingo events. Terms and Conditions Clarified Drawing attention to the liquor inspector The branch has had instances where our inspectors have arrived at a licensed establishment and bar staff have purposely drawn patrons attention to the liquor inspectors, a few going so far as to say, You can blame this on the liquor inspector. These types of actions jeopardize their personal safety, particularly in a bar setting late at night. We ask for your cooperation. Gift cards In the last issue of this newsletter we included information on gift certificates and stated that liquor could not be included in gift baskets at events such as golf tournaments but that gift certificates redeemable at their establishment were OK. We would like to clarify that in this situation the gift cards must be meant for non-liquor items only, and cannot be used for liquor. Automatic beverage systems The self-service of liquor by patrons is not permitted. If you are considering an automatic beverage system, please note that staff will still need to pour and serve the liquor. This will enable you and your staff to prevent minors from accessing liquor and to ensure that your patrons do not become intoxicated. Implementation Updates We have added a Liquor Policy Review Implementation section to our website. All of the recommendations, once implemented, will be announced via news releases or policy directives and this is where you ll be able to find them. Regular visits to this page will allow you to keep current with the implementation of the recommendations from the Liquor Policy Review.

5 Liquor Policy Review Implementation The Liquor Policy Review report includes 73 recommendations in five key areas. To date, 17 of the 73 recommendations have been implemented. Full details, including the policy directives, are available on our website; however, a short summary of each is contained below. Liquor Sales at Farmer s Markets (31) Wineries, breweries, and distilleries with an on-site store endorsement may sell their products at farmer s markets. The decision to allow liquor vendors at their market is left to individual Farmer s Markets, subject to the farmer s market meeting certain criteria (they must for example, have an emphasis on local produce and related farm products) and be permitted to sell liquor by local bylaws. Licensees must complete a Farmer s Market Sales Authorization for each farmer s market they sell at and submit these to LCLB at least five business days before the first market day. There is no fee. Please see Policy Directive for more details on eligibility criteria, how to obtain a farmer s market authorization and rules related to sales and sampling. Liquor Sales of Product Showcased at Food and Beverage Festivals (32) Licensed wine stores and licensee retail stores may apply for an endorsement to sell their products for offsite consumption at a tasting-focused food and beverage festival licensed under a special occasion licence. Eligible festivals must have a primary focus on tasting or introduction of liquor products and/ or accompanying food (e.g. a wine festival licensed under an SOL with many manufacturers presenting their products, possibly in combination with foods, would qualify, whereas the SOL attached to a music festival would not). Licensed wine stores who set up a temporary store are limited to the types of products they are permitted to sell under the licence of the permanent store (e.g. a BCVQA wine store could only sell BCVQA wine at an SOL licensed food and beverage festival). The authorizations are only permitted in association with a special occasion licensed event. Other event types that resemble SOLs, such as events licensed under temporary extensions of liquor primary licences or licensed catering events, are not eligible to host Liquor Policy Review Implementation - 1 temporary retail stores. Please see Policy Directive for more details. Minors in Liquor-Primary establishments (34) Liquor-primary and liquor-primary club licensees may apply for a family foodservice term and condition on their licence. This is intended to allow pubs and other establishments that offer foodservice to expand the range of dining options they offer their customers. Minors may be in the establishment until 10:00 p.m., provided they are accompanied by a parent or guardian. To qualify, the licensee must make available a selection of appetizers and main courses (or equivalent), using either their own kitchen, or one owned by someone else, as long as it is located on the same site. Please see Policy Directive for more details. Happy Hours and Minimum Drink Prices (16) The following new minimum drink prices are in place at all times for liquor primaries, liquor primary clubs, food primaries, and manufacturer lounge and special event endorsement areas: $0.25 per ounce for beer and cider, $0.20 per ounce for draught beer and cider over 50 ounces, $0.60 per ounce for wine, and $3.00 per ounce for spirits. In exchange, these licensees may offer Happy Hours at any time during the day and may also vary the price of liquor for certain groups (e.g., team night price reductions for players in uniform). The previous requirement that licensees not sell product below the LDB purchase price no longer applies. These new minimum prices only apply to product sold for on-premises consumption. They don t for example, apply to growlers sold at brewery lounges. The Liquor Policy Review suggested allowing happy hours only if minimum pricing (as recommended by health advocates) was put in place. Please see Policy Directive for more details. Transferring Small Amounts of Liquor between Establishments (61) Licensees may occasionally transfer a small amount of liquor to another licensee to balance stock if products run out unexpectedly. A licensee cannot transfer or receive more than $10,000 a year of liquor in this manner and both the seller and the purchaser must keep records within their liquor registers indicating what

6 quantity, brand and type of liquor (sku #) was transferred, its value, date of transfer and the licence numbers of both parties. Although the original recommendation was that this privilege be available only to chains, government decided not to limit it to establishments with ownership ties. However, some limits apply. Please see Policy Directive for more details. Patrons Carrying Liquor between Adjoining Establishments (63) Patrons may take a drink purchased in one establishment to an adjoining establishment if both establishments are owned by the same licensee. They must be immediately adjacent to each other, and laid out in such a way that the patron does not have to pass through an unlicensed area to reach the other establishment. Please see Policy Directive for more details. UBrew/UVin or Homemade Wine Permitted at Family SOL Events (53) Family special occasion licence holders may now serve UBrew/UVin or home-made wine, beer or cider made at their event. There may be no charge associated with the non-commercial liquor but liquor purchased from the LDB may still be sold at the same event. Family events include weddings, birthdays wedding anniversaries, etc. UBrew/UVin Licensees May Now Own Other Liquor-related Establishments (70) Until now, UBrew and UVin establishments have been prohibited from owning other liquor related establishments in the same way that other licensees are. This tied house restriction is in place to prevent some forms of unfair market advantage. However, because UBrews and UVins do not sell liquor, this restriction is not applicable, and is rescinded. See Policy Directive for more information on recommendations #53 and #70. Liquor Service without Food in Food-Primary Establishments (36) Food-primary licensees must continue to focus on food service, with a full menu available whenever liquor service is available. However, patrons do not need to order food if they do not wish to eat. A recommendation on this matter was included in the Liquor Policy Review report to confirm government s position that patrons may order liquor without food in restaurants, provided the overall focus of the restaurant does not shift to that of a bar. Please note that in 2012, the requirement that liquor sales should not exceed food sales in the dining room was removed. The requirement was often interpreted as always requiring a minimum of 50% of the restaurant revenues to come from food sales. As some licensees pointed out, a restaurant could be focused on food service and still have difficulty meeting this ratio if patrons ordered expensive drinks, e.g. pricey bottles of wine, while ordering comparatively less expensive entrees. Off-site Storage (60) Licensee retail stores, wine stores, liquor primary and food primary establishments may store liquor off-site, and the process for manufacturers to store liquor offsite has been simplified. See policy directive for more information and use LCLB027 to apply. Other recommendations #51 Whole-site special occasion licensing is allowed at family friendly public events, if there are no public safety concerns. #52 Mixed spirit drinks are now permitted at public special occasion licence events, however serving sizes are limited to 1.5 ounces and customers may not be served/purchase more than two servings at a time. #56 Allow consumers more drink choices in stadiums Stadium licensees may now sell all types of liquor, although shooters may not be sold by hawkers or concession stands. #57 Mobile vendors in the concourse areas of stadiums Hawkers are no longer restricted to the stands and may sell in other public areas subject to LCLB approval. The application process (Form LCLB045b) includes local government comment. Although not part of the Liquor Policy Review, government has also updated an outdated regulation so that bachelor/bachelorette parties are eligible to apply for SOLs. Liquor Policy Review Implementation - 2