#LiquorLeaks: notable quotes about potent potables

(Note: scroll down for new information added Sept. 27)

Why does the Sept. 6-sworn Deputy Premier Rich Coleman get so much media attention?

Luckily, Rich Coleman didn't fumble the Grey Cup.

Not only is he British Columbia's minister of natural gas, oil, hydroelectricity, dams, mines, social housing, gambling and booze, but the four-term Aldergrove-Fort Langley Liberal MLA often says outrageous things in the Legislature, in media scrums and to those reporters that he decides to speak to. (My requests for a one-on-one interview with Coleman, dating back to 2005, have been denied.)

Coleman, on at least three occasions in 2012, has made odd statements about the controversial Liquor Distribution Branch privatization that demand analysis.

Part I

On April 30, when the LDB logistics privatization request for proposals was published, Coleman told reporters in a scrum at the Legislature:

“They all have an opportunity, in the next 60 days, to come and make a presentation and an offer, a bid, whatever you want to call it... then they’ll come back with the selected, maybe a short-short list of one or two, and they’ll have to go through that and decide which one is the best deal for the government, and then we’ll move forward.”

The RFP, on page 40, stated “up to the top three proponents” would be shortlisted. That could be reasonably interpreted to mean any number from one to three. Coleman knew or ought to have known that, but he didn’t mention the number three.

Why was “one or two” on his mind? Why not the number three?

On May 8, the public learned through my story in Business in Vancouver that one company had positioned itself ahead of the pack and had been lobbying for seven years. That company is Exel. In its Oct. 6, 2009 "Project Last Spike" internal memo, Exel pondered using its relationship to Coleman to influence the writing of the RFP, if its proposal for a public-private partnership went nowhere. Another strategy involved the potential acquisition of ContainerWorld, the giant pre-distribution warehouse in Richmond on contract with LDB. 

As it happened, four bidders were shortlisted on July 20, because then-Citizens’ Services 

Minister Margaret MacDiarmid claimed there was a third place tie. The rankings, however, weren’t released. 

Should one of those four, namely Kuehne + Nagel, have been disqualified? I found out, through a Freedom of Information disclosure, that K+N submitted its proposal after the “prior to 4 p.m.” deadline on June 29! Read my Sept. 12 BIV story here. Government records show it was a minute late. K+N wouldn’t offer an explanation when I sought comment. A massive loophole means K+N remained in the game, because, as one bureaucrat said in an email: "There is no deadline in this process." See that shocking email below.

Five of the other bidders reasonably adhered to the deadline in the RFP. They submitted their proposals before 4 p.m. June 29. Why did K+N go into overtime? K+N wouldn't answer my questions. Neither would Finance Minister Mike de Jong. He is overseeing the privatization because Citizens' Services Minister Ben Stewart's blind trust-held Kelowna winery supplies both the B.C. LDB and Exel-owned Connect Logistics in Alberta. 

The six bidders, including K+N, are in an industry that is, in-part, based on deliveries according to schedule.

Part II

In a July 19 Tweet, Coleman (whose handle is @ColemanCountry) wrote to talkshow host Simi Sara of CKNW AM 980: 

“What I said on your show is no I don’t know who all LDB bidders are because the bid doesn’t close till June 30.”

The RFP stated that the close of bidding was June 29 “prior to 4 p.m.” Coleman knew or ought to have known that. 

Maybe he didn’t now who “all LDB bidders” were, but he knew or ought to have known who some were. Particularly "one or two" of them, such as Exel and ContainerWorld. 

Exel’s October 2009 internal memo indicated the company had discussions with Coleman about the desired takeover, and that Coleman offered his encouragement. His predecessor, John Les, had talks in 2005 with Exel lobbyist Mark Jiles. Les liked the idea of an Alberta-style system. Exel-owned Connect has held that booze hauling monopoly since 1994. 

ContainerWorld’s owner Dennis Chrismas and his lobbyist, Mike Bailey, met with Coleman on March 2. 

Bailey was originally hired in summer 2011 by Chrismas to oppose Exel’s proposal for a new liquor distribution system. Chrismas eventually had to shift gears and enter the bidding process because the RFP says pre-distribution warehouses, like his, would be phased out under the new, private operator. The survival of ContainerWorld may hinge on the outcome of this process.

Part III

The Globe and Mail’s Andrea Woo wrote a Sept. 8 feature on liquor regulation that said, in part: 

Industry enthusiasts have also called for the province to do away with the excise taxes and markups, or to consider a flat-tax system on alcohol similar to that of Alberta. Mr. Coleman said he doesn’t see that in the near future. 

“The biggest challenge is: How much can government afford? We have $800-million that comes into government coffers [each year]” through liquor,” he said.“If you take a couple hundred million off that, you have to find the revenue somewhere else. 

“It’s a significant contributor to the revenue of the province.”

The LDB annual report for 2011-2012 (which was addressed and presented to Coleman, the minister responsible) said the LDB’s profit was $911.145 million on $2.89 billion gross sales. On page 31, it says payments to the Province of B.C. for the year ended March 31, 2012 were $908,587,000.

That’s $108 million more than the $800 million that Coleman was quoted as saying in the Globe story. The difference is substantial. Coleman knew or ought to have known that $908.587 million came into government coffers from LDB in the most recent fiscal year. 

Liquor ministers say the darnedest things!

UPDATE (Sept. 27): On May 17, Coleman's office received an "advice to minister" information note (see "Rich Coleman's privatization script, by Jay Chambers" at bottom) written by then-LDB general manager Jay Chambers. It includes recommended responses to anticipated media questions about the LDB privatization. It is apparently the only briefing note prepared for Coleman between April 30 (the day the request for proposals was published) and July 31. I received it Sept. 27 after a Freedom of Information request.

"There is no deadline in this process."

Rich Coleman's LDB privatization script, by Jay Chambers

#LiquorLeaks seeks more from Les

How’s this for a coincidence? 

Treasury Board is the 10-member cabinet committee that will receive the recommendation this fall from the joint Liquor Distribution Branch and Citizens’ Services Ministry committee deciding which private company will take over warehousing and hauling of liquor in B.C.

In the last week of August, no fewer than three members of Treasury Board announced they will not run for the ruling BC Liberals in the scheduled May 14, 2013 provincial election. Kevin Falcon quit as finance minister. Children and Family Development Minister Mary McNeil and John Les, Parliamentary Secretary to Premier Christy Clark, also said this was their last term in office. If Randy Hawes follows around Sept. 10, that would make four lame ducks on the committee that decides provincial spending, unless Clark makes wholesale changes with her next cabinet shuffle. The free enterprisers are fleeing the enterprise, with all signs pointing to a Liberal defeat and NDP victory. 

While Energy and Mines Minister Rich Coleman (below left) is the one currently holding the booze portfolio (and a seat on Treasury Board), Les (below right) was more involved in the early days of secret talks with Exel than he appears. Far more involved. 

From 2005 to 2007, in fact, then-unregistered lobbyist Mark Jiles met on several occasions with Les to promote the virtues of his $5,000-a-month client Exel. Les was a supporter of B.C. moving to an Alberta-style system. And it just so happened that the operator of the Alberta monopoly was a private company (and still is) called Connect Logistics, which is owned by Exel. 

Les played the role of a passive matchmaker, suggesting that Jiles and Rob Madore, the former Connect Logistics general manager, forge an alliance with the B.C. Government and Service Employees’ Union. George Heyman was then president and Jeff Fox a director. Without workers agreeing to a private warehouser, nothing would happen.

Les was warm to the idea of Exel taking over, but opposed outright the privatization of LDB’s retail chain. LDB general manager Jay Chambers initially opposed selling off the logistics end of the business. Les was no fan of Chambers and thought it might be a good idea to replace him. Chambers stayed put until his surprising June 6 resignation, which was kept secret for eight days. 

When Chambers finally did an interview after joining the Motor Vehicle Sales Authority of B.C. in July, he claimed the career move was unrelated to the LDB privatization.

LDB privatization never really gained traction under former Premier Gordon Campbell. But when Christy Clark came to power in 2011, the game changed. The HST was defeated, the government was in a budget bind and it certainly didn't hurt Exel that its lobbyist Patrick Kinsella was Clark's key Liberal leadership campaign strategist.

What about Les? After numerous interview requests since May, he finally responded to me the day he announced his resignation. I know Les knows a lot about this file, but he doesn’t want to answer any questions. Following is our Aug. 30 email exchange. 

From: Bob Mackin  10:19 AM 

To: Les.MLA, John; Les, John 

Subject: media request 

Hello Mr. Les,
Would you be available for an interview today or tomorrow to discuss your time on the LDB file, particularly 2005 to 2007 when you were being lobbied by Mark Jiles on behalf of Exel? I know that you met regularly with Mr. Jiles on this matter during that period of time. 
Sincerely,
Bob Mackin
Business in Vancouver

From: Les, John
Date: August 30, 2012 10:20:30 AM PDT
To: Bob Mackin
Subject: RE: media request 

No, sorry. The current Ministers responsible speak for government on this issue.

From: Bob Mackin
Sent: August-30-12 10:23 AM
To: Les, John
Subject: Re: media request 

Thank-you for the reply, but the questions I have are specific to your time on the file and those questions are ones that only you would be able to answer. 

From: Les, John
Date: August 30, 2012 10:30:51 AM PDT
To: Bob Mackin
Subject: RE: media request 

Sorry. Same answer.

By the way, a delegation from Exel toured the LDB’s headquarters and warehouse on Wednesday with Citizens’ Services official Pelle Agerup and fairness monitor George Macauley. LDB provided me lists of attendees of the May 9 industry information meeting, the May 10 proponents' meeting and tours of the Kamloops LDB warehouse. Citizens' Services provided the list of bureaucrats who decided the shortlist of four and are deciding the recommendation to Treasury Board. Citizens' Services, however, wants to keep the list of the Aug. 29 Exel tour group secret, citing a laughable wish to guard the "integrity" of the process.

Remember, folks, this is a process in which no business plan has been published. It is a process that appears to be driven by the Liberal-connected lobbyists for a unit of one of the world's largest corporations. A process in which the leading bidder speculated internally that it could use its connection to the minister responsible to influence the writing of the request for proposals in its favour or buy-out a related competitor to achieve the same outcome. It is a process that the NDP has likened to the scandalous BC Rail privatization of 2003. 

#LiquorLeaks wonders: is B.C.'s open government a sham?

I have used this space before to comment on Premier Christy Clark's open government sham, er plan. Excuse me.

I didn't think the Distribution of Liquor Project could get more suspicious, but the BC Liberals must not have been paying attention to public and media discourse. I made a very simple Freedom of Information request to find out exactly when the six bidders on the long list submitted their bids.

It's not the first I've made. Here is a previous post about how I found out LDB and the government are hiding cost/benefit analyses and business case reports regarding privatization. I have since appealed to the Office of the Information and Privacy Commissioner.

On this latest request, the government initially told me I'd get a response by Aug. 15. Now it has notified me that it is delaying disclosure until as late as Sept. 27 because it feels like consulting with another public body. It has the power to invoke further delays. Sometimes the information is so sensitive, that the government can make a valid case to delay disclosure. Most of the time the government is motivated to withhold records, either temporarily or permanently, for fear of embarrassment.

Minister Margaret MacDiarmid -- whose portfolio includes Open Government -- told me on July 9 that it was her ministry that was managing the privatization bidding process. Citizens' Services is in charge of government buying and contracting and Citizens' Services was in charge of receiving the formal bids by the 4 p.m., June 29 deadline.

MacDiarmid's staff now tell me they want to consult with the Liquor Distribution Branch and Energy and Mines. LDB answers directly to Energy and Mines and its minister, Rich Coleman. See the letter below.

The shortlist, which could be as little as one bidder or as many as three, is supposed to be announced July 20. (We know a lot about Exel, but how much do you know about ContainerWorld, the only B.C. bidder which has an interesting relationship with an Exel sister company? And what about Schenker and Kuehne + Nagel and their previous relationship with Exel in the European Union?)

Why does the government want to hide the time(s) and date(s) that the bidders submitted their documents?

If all six bidders did respond on-time, as per the rules, shouldn't the proof be made public now?

Laughable Delay & Bother

#LiquorLeaks wonders why Christy met Rich on a Saturday?

Below is Premier Christy Clark's agenda for December 2011.

There is only one entry on Dec. 3 for an hour-long Saturday meeting with Rich Coleman.

There is no clue about the reason for the meeting. The location was censored. We don't know if anyone else attended.

Politicians often appear at weekend community festivals and parades and fundraising banquets. But I have read enough agendas of politicians over the years to know that a weekend meeting among senior members of a provincial cabinet is out of the ordinary. Frankly, it is unusual. Especially for Clark, who has a hockey-playing son that deserves her attention on weekends.

Why is Dec. 3, 2011 an interesting date? A Cabinet Concept Paper dated Dec. 1 is about "Liquor Retail and Distribution Model Options." Then-liquor minister Shirley Bond signed the report on Dec. 5. Bond had met on Aug. 25, 2011 with Exel vice-president Scott Lyons and lobbyists, including Mark Jiles and Rob Madore, after previously telling Exel the government wasn't interested in privatization. 


The liquor portfolio has never really strayed far from Coleman, who enjoys his whiskey. It keeps finding its way back to his desk. Coleman regained the responsibility on Feb. 8, 2012. 


Then, 13 days later, the liquor logistics privatization was announced in the Feb. 21, 2012 budget. 


Almost three months after he met with Clark on the first Saturday in December, Coleman met with Dennis Chrismas of ContainerWorld and his lobbyist, Mike Bailey on the first Friday of March. ContainerWorld is the only B.C.-headquartered and owned company among the six seeking the LDB monopoly, yet it has an interesting association with Exel.


Learn more about Exel's Long March to Control B.C.'s Liquor Distribution here, from The Tyee.

Premier Christy Clark's Agenda Dec. 2011

#LiquorLeaks reveals Coleman's Chrismas in March

Much has now been written about Exel Logistics and its thirst to become the private operator of the Liquor Distribution Branch's warehouses and distribution network. Exel proposed a private-public partnership, hoping to score the contract without a competition. On the alternative, Exel wanted to position itself as the winning bidder. A Sept. 24, 2010 letter by vice-president Scott Lyons to liquor minister Rich Coleman is the best proof so far that Exel sought to use its relationship with Coleman to influence the writing of the request for proposals, just as Exel contemplated in the "Project Last Spike" internal memo of Oct. 6, 2009.

Exel has contingency plans and one involves acquiring Richmond warehouse ContainerWorld, the biggest pre-distribution warehouse for liquor in B.C. A great deal of the bottles you see on shelves in B.C. went through ContainerWorld before entering the LDB system. ContainerWorld has a business relationship with Giorgio Gori of Italy. Gori is owned by Deutsche Post DHL, which, coincidentally, owns Exel.

ContainerWorld's founder and present owner is Dennis Chrismas, a BC Liberal supporter who donated to liquor minister Rich Coleman's campaign in 2009. Chrismas (whose name doesn't include the letter-T) hired lobbyist Mike Bailey to encourage the government to keep the status quo. Now that the LDB logistics monopoly contract is in play -- and the government is phasing out the pre-distribution program -- Chrismas had to throw his hat in the ring. As the document below shows, Chrismas and Bailey met with Coleman on March 2 from 12:30 p.m. to 1 p.m., according to a copy of Coleman's agenda I obtained via Freedom of Information. (The documents also show Coleman met with B.C. Government and Service Employees' Union president Darryl Walker and negotiator David Vipond on March 28, a week after the union and government agreed to a post-privatization job security and early retirement package. But that's another story, right here.)

Despite my numerous attempts to find out what was discussed in the meeting, neither Coleman nor Chrismas have responded to my interview requests.


If Exel doesn't make it to the shortlist on July 20 and ContainerWorld does, then don't for a moment assume that Exel is out of the game. The "Project Last Spike" memo spelled out Exel's ContainerWorld strategy. Read all about it here, from Business in Vancouver.


Rich Coleman Agenda

#LiquorLeaks examines the issue of influence

The picture became clearer July 12 when the NDP released the results of its Freedom of Information request for records about the privatization of the Liquor Distribution Branch's warehousing and distribution. We now have even more proof -- since my exclusive May 8 story in Business in Vancouver -- that all roads lead to Exel. A summary is in this July 12 BIV story.


There was a pivotal meeting on Aug. 25, 2011 between Exel vice-president and lobbyists Mark Jiles and Rob Madore with then-liquor minister Shirley Bond and Roger Bissoondatt, the chief financial officer of the LDB and the acting-general manager, since Jay Chambers left July 4. 


This pursuit, however, dates back to 2005 when John Les was the liquor minister. 

We now have proof that Exel was trying to influence the writing of the RFP. It is contained in a Sept. 24, 2010 letter from Lyons to Rich Coleman. 

Exel encourages the Government following a proper, timely, and effective procurement process that meets the business needs and objectives of the Government, industry, and consumers. We suggest the criteria for selection emphasize: 

> Actual experience operating alcohol beverage warehousing and distribution networks for entire provinces across an extended period 

> The long-term stability of the company, the financial capability to take on a project' of this size, and the ability to scale its operations as needed> A record of achieving excellent results in unionized environments and in particular a relationship with the BCGEU ' 

> Ability to demonstrate long-term successful operations of a similar size, scope, and complexity as the LOB warehousing and distribution operations 

> A record of successful start-ups including the availability of resources locally, nationally, and internationally to support the implementation 

> A commitment to and record of reducing green house gas emissions and waste 

> IT Infrastructure, systems redundancy and' data management capability including experience Integrating IT systems to government ERP systems and other third party applications 

> Proven record of successfully securing and controlling beverage alcohol products for provincial governments 

> Engineering and design capability 

> Availability to provide services beyond warehousing, and, distribution such as forecasting and demand planning, global freight services, real estate development

Did the attempt to influence Coleman, with whom Exel claimed a close relationship, carry over into the April 30, 2012-published  Distribution of Liquor Project Negotiated Request for Proposals? Compare the above with this excerpt from page 44: 

7.2.1 In Scope Evaluation Criteria 
1. (a) Proponent Capability and Capacity
a) Proponent Profile (Lead and subcontractors if any)
b) Demonstrated experience in large scale warehousing and wholesale distribution of retail products and controlled substances such as the beverage alcohol business
c) Demonstrated experience with transition planning and transitioning services of similar size and magnitude to the In Scope requirements

1. Demonstrated experience in inventory, demand and delivery management on a scale similar to the requirements described in the NRFP

1. (b) Proponent Corporate and Financial Capacity

1. Corporate and financial capacity

I exclusively obtained the "Project Last Spike" Exel internal memo, which was authored by Lyons from Oct. 6, 2009. Here is a key section which must now be viewed through the lens of the documents published July 12 by the NDP. Exel, it seemed, wanted to influence the writing of the RFP. But it also hoped to do a private-public partnership with government to avoid an RFP process altogether.

Options to Overcome BarriersThere are three options to overcome the opposition of private bonded warehouses.  

Convince the government to award the contract to Exel without an RFP. 
This avoids the risk of losing an RFP. It may also enable the government to realize savings more quickly as time is not lost in the RFP process. It will require a high degree of industry support. Vocal complaints from unions or industry participants could generate public scrutiny and force the process to RFP. This option may require the purchase of ContainerWorld to be successful.

 Win a competitive bid process. 

This option does not require the purchase of ContainerWorld, and follows standard government procedures. It does carry the risk the Exel might not win the bid. This risk can be mitigated if Exel can influence the writing of the RFP. Exel would push to include criteria such as previous industry experience, appropriate resources, and a solution incorporating the BCGEU. A likely response from the private bonded warehouses may try and limit the scope of the RFP to not include their activities. Failing this, the private bonded warehouses will use their influence to have the RFP written in their favour. 

Purchase ContainerWorld. 
It is by far the largest of the approximately 7 private bonded warehouses. Once ContainerWorld is onside the opposition of the remaining private bonded warehouses would be much less. 
This would enhance the odds that the government does not go to tender or Exel wins a tender. Dennis Christmas (sic) the principal owner of ContainerWorld is a key player in the current BC industry. Treating him fairly and getting him onside will assist bringing the BC government and the industry along. An added benefit of this approach is that ContainerWorld has a brand new 495,000 sq. ft. site that is expandable to 600,000 sq ft. This should meet the needs of this initiative, though Exel requires further analysis to confirm this site is sufficient. Dennis Christmas could be retained as a consultant and public relations specialist. The downside to this option is sharing the economic benefits with ContainerWorld. Though it may be possible to amortize the purchase price across a number of years and build the cost in to the operating model. Another consideration is the complex internal approvals required to purchase ContainerWorld. Further details on this option include:
ContainerWorld's revenues are estimated at $40M. Exel estimates that $20M is
generated from freight forwarding activity, and $20M from distribution activities for BC Wineries and BC Small Brewers. A high level estimated purchase price ContainerWorld's business is $24M assuming a 7.5% margin and paying eight times earnings. This is a dimensional number which needs to be confirmed but supports the premise that an acquisition approach is overall economically viable.
0 The union representing ContainerWorld's employees is the Teamsters. Exel will •be represented by the BCGEU. Upon purchasing ContainerWorld, and consolidating operations the BCGEU would take over the Teamsters members.
This is not a certainy, but the BCGEU membership is almost two times the size of the Teamsters membership, and the BCGEU collective agreement is more lucrative.
0 Deutsche Post DHL holds a 100% stake in Giorgio Gori. Giorgio Gori does not have an ownership stake in ContainerWorld, but has a long standing relationship where it is understood that at some point they would purchase ContainerWorld. Exel could use this avenue to negotiate a reasonable deal with Dennis Christmas.

#LiquorLeaks presents NDP's Exel FOI documents

NDP liquor critic Shane Simpson dropped a bombshell July 12 at a Vancouver news conference where the results of a Freedom of Information request by the NDP Caucus were revealed. The 38 pages show the depth and breadth of Exel Logistics' lobbying to privatize the B.C. Liquor Distribution Branch. 

The company, which hired BC Liberal-connected lobbyists Mark Jiles and Patrick Kinsella, was not seeking to compete in a tendering process. It wanted to cut a direct, private/public partnership deal. That was part of the strategy mentioned in the "Project Last Spike" Exel internal memo of Oct. 6, 2009. Plan B was to go through a bid process, but Exel contemplated using its relationship with liquor minister Rich Coleman to influence the writing of the request for proposals. It's plan C was to strike an alliance with or take-over Richmond's ContainerWorld, which has a business relationship with Giorgio Gori, an Exel sister company.

Much more to come. Remember, #LiquorLeaks is the #hashtag, this is the story that started it all, in the May 8 edition of Business in Vancouver and here are the new documents below.

LDB Privatization FOI-NDP

#LiquorLeaks reveals another LDB privatization foe

Is it beyond the tipping point yet? 

I'm referring to the controversy over the B.C. Liberals' rush to privatize the Liquor Distribution Branch's warehousing and distribution -- without a business plan or cost-benefit analysis (I've tried hard to get one, but it either doesn't exist or is a #hiddenplan) and without any formal industry consultation. 

Prominent B.C. Liberals have a too-close-for-comfort connection with the leading bidder, Exel Logistics. Exel is the subsidiary of German giant Deutsche Post DHL and owns the private Alberta monopoly Connect Logistics. Exel has used the services of B.C. Liberal lobbyists Mark Jiles and Patrick Kinsella for seven years, since John Les was the liquor minister. In Exel's own words, in an Oct. 6, 2009 internal "Project Last Spike" memo, the company contemplated using its relationship with liquor minister Rich Coleman to influence the writing of the request for proposals.

Now the Campaign for Real Ale of British Columbia, part of an international network of beer aficionados, has joined the chorus of those seeking to postpone or cancel the privatization. On July 11, CAMRA sent the following letter to Coleman, finance minister Kevin Falcon, citizens' services minister Margaret MacDiarmid, fairness monitor George Macauley and Roger Bissoondatt, the acting general manager and chief financial officer of LDB. 

From: CAMRA President <pres@camravancouver.ca> Date: Wed, Jul 11, 2012 at 5:38 PM  Subject: Campaign for Real Ale of British Columbia position LDB Distribution Warehouse Privatization
To: rich.coleman.mla@leg.bc.caCc: <Shane.Simpson.MLA@leg.bc.ca>, kevin.falcon.mla@leg.bc.ca, margaret.macdiarmid.mla@leg.bc.ca, Roger.Bissoondatt@bcldb.com, office@macauley.ca, <Karen.Ayers@gov.bc.ca> 

Dear Mr Coleman   

I am writing you this letter on behalf of the Campaign for Real Ale of British Columbia (CAMRA BC), a craft beer consumer advocacy group who represent more than 1000 individual and 100 corporate members here in British Columbia and of which I am the Vancouver Branch President and member of the BC Executive.  

Since the announcement of the BC Liberal Government’s plan to sell off the Liquor Distribution Branch’s warehouses and with them the province’s warehouse distribution system, many groups have come out against the plan, including the opposition NDP Party, Alliance of Beverage Licensees of BC, the BC Government Employee’s Union and the Craft Brewer’s Guild of BC.   

There have been complaints of the complete absence of consultation with BC’s liquor industry or the general public, and the lack of guarantees that this privatization plan will not negatively impact the alcohol industry and alcohol consumers of this province.   

It is now our turn, the craft beer consumers of BC, to voice our dissent due in large part to  the lack of information as to how this privatization will affect the craft beer industry and craft beer consumers and because the current government cannot guarantee 100 percent that this privatization deal, when completed and implemented, will not have a negative impact on the craft beer consumers of BC.   

No business case has been presented. A clear cost-effect analysis should be completed and presented to both the liquor industry and general public in order to clarify exactly how privatization will affect liquor prices before this process goes any further.   

No study has been done and no guarantees have been made as to whether privatization will affect access to BC-brewed beers from local, craft breweries.  

At the moment, the Provincial Government has a mandate to make these beers accessible, but will this continue after privatization?   

In short, CAMRA BC cannot currently support this privatization plan and will continue to voice dissent until the following steps are taken:

1. Conduct a study to provide objective data showing how this move will impact the craft beer consumers of BC  

1. Make public a business case and/or cost-effect analysis

1. Have a full and meaningful consultation with both the private and public sectors of the province in regards to the planned sale and privatization of the Liquor Distribution Branch's warehouses and warehouse distribution system  

If, after those steps have been taken and it is shown that this privatization plan will not negatively impact the craft beer consumers of BC, CAMRA BC will be willing to support this move publicly on behalf of our membership. Thank you for your time. 

--Paddy Treavor  

President CAMRA BC
Vancouver Branch

"Stee-rike" 1 at Liquor Distribution Branch

The British Columbia Government and Service Employees' Union is rightfully on the warpath during its 70th anniversary year.

After six months of negotiations with the B.C. government, the gloves are coming off and it could be a long, hot summer. The BCGEU wants a 3.5% increase for its 29,000 members across government for the first year of a new contract and a cost of living increase in the second. The government has offered only 3.5% over two years and Finance minister Kevin Falcon has drawn a line in the sand.

"The world economy is actually getting worse, it's not getting better," Falcon told CKNW on June 29. "I think the unionized workers really need to understand that our offer will come off the table, and I'd sure like to see them return to the table before that offer's removed for good. It is not going to get any better."

The first salvo fired by the BCGEU is to strike at three important Liquor Distribution Branch locations. The Vancouver headquarters, which includes offices, the main warehouse and the flagship store, will be behind pickets from 11:30 p.m. July 2 to 11:30 p.m. July 3. Similar strikes are scheduled for July 3 at the LDB's Kamloops warehouse (5:30 p.m. to 10:30 p.m.) and Victoria wholesale customer centre (6 a.m. to 5 p.m.). The disruptions are bound to cause a hiccup in the supply chain and the government will feel a pinch. But it will not be anything like the 1970s and 1980s when a summertime strike at government liquor stores in B.C. created chaos.

This is an intriguing strategic move. LDB is one of the province's biggest, most profitable retailers and the 3,500 BCGEU members who work in it are important collectors of provincial tax revenue. During the 2010-2011 fiscal year, LDB delivered an $890.4 million profit to government on $2.82 billion gross sales.

The government is amid a controversial program to privatize LDB's warehousing and distribution -- without a business plan and without formal industry consultation but with evidence that such a move is being done primarily to benefit BC Liberal party insiders. Evidence is contained in Exel Logistics' "Project Last Spike" internal memo from Oct. 6, 2009 that even suggests the BCGEU was an ally in its privatization push. UPDATE JULY 3: Exel and ContainerWorld are among the six companies that submitted bids by the June 29 deadline. The others were Hillebrand Westlink, Kuehne + Nagel, Metro Supply Chain Group and Schenker of Canada. A shortlist of as many as three companies is expected by July 20. On April 30, liquor minister Rich Coleman said the shortlist could be as small as one company. Companies related to Exel, Schenker and K+N were found to be involved in a price-fixing conspiracy and disciplined by the European Commission. Additionally, Exel has an intriguing connection with ContainerWorld, the biggest existing liquor warehouse in B.C.

BCGEU is now publicly opposing the privatization, after signing a March 21 memorandum of agreement for post-privatization job protection and early retirements. The June 29 news release announcing the three strikes said another reason to picket the LDB work sites is "to back our proposal for Sunday liquor store openings province-wide to generate more than $100 million in annual revenue."

That's odd. BCGEU president Darryl Walker (right) told me in a May 3 interview that the proposal was dead. Killed, in fact, by the government in negotiations leading to the March 21 agreement. The Sunday openings proposal was considered a deal breaker by the government, Walker said. Below is an excerpt from my interview with Walker.

Mackin: If BCGEU is opposed to the privatization of this asset, then why would it have made the deal, made the memorandum of agreement to get the job protection for the workers, for the members? Wouldn't it be better if the BCGEU went out on principle and said 'no, we're not going to agree to this, we're going to, on principle, oppose this entirely' and rip up the MOA? 

Walker: "Part of the reason that we sat down with the government and put the MOA together is to protect our members, and that is our primary responsibility as you probably know under our certificates with the Labour Relations Board. We're held highly accountable for the rights of our members and when you see an opportunity to protect the members, the first piece is to get that done. That's why we sat down and worked with the government.  

"You might also know that of course we had a proposal on the table to open stores on Sundays, thereby increasing revenues by, well, as much as $120 million to $140 million to $150 million annually. We were told by the employer that if we didn't take that off the table we would be unable to provide or get the protection in the MOA for our members. So we were in a position first off to protect our members and that's what we knew we needed to do.  

"Once that was done and we had those in place we then understood we were able to do the second piece, which is to oppose this on principle. Principle is one thing, quite frankly British Columbia needs revenues now and we need to be able to say to B.C. that we can show the government methods of providing and enhancing those revenues. We needed to be able to do that but we needed to be able to protect our members first. That was our primary responsibility. We saw it as a bit of a two-step, and we realized that one had to go first if we were to protect our members."

There may be reasons to limit Sunday openings. Chief medical officer Dr. Perry Kendall reported in 2008 that a government monopoly on the retail of alcohol and restrictions on hours and days of sale are among the 10 "best practices policies for managing the health and social harms of alcohol." Kendall told me the government did not consult him on the potential health or social implications of the privatization of LDB warehousing and distribution.

There are also 1,400 liquor retail outlets in B.C., of which only 197 are government-owned. The majority are licensee retail stores (672) and rural agency stores (221) owned and operated privately by companies that were granted Sunday opening privileges by the Liquor Control and Licensing Branch and their host municipalities. The licensee retail stores would obviously not be amused if they had to suddenly compete with the government for customers. (They are represented by the Alliance of Beverage Licensees of B.C., which opposes the privatization.)

There is no evidence, however, that government has recently studied any of the commercial or health implications of anything to do with the wildly lucrative and socially risky business of booze. If it has any, the government doesn't want to share any business plans or cost-benefit analyses with you or me.

I have made numerous requests to interview Coleman. He has not sat down for an interview with me.

#LiquorLeaks reveals LDB wingding for Jay-C

Could there be whisky?
Mighty they have gin?
Could there be three or four six-packs?
I don't know...
Will there be a party?

With apologies to the Irish Rovers, there's a staff-only get-together at the Liquor Distribution Branch's Vancouver headquarters on June 27 in honour of departing general manager Jay Chambers. (Coffee and cake are advertised, but, ahem, the LDB has more than a few wobbly pops and bottles of hooch in storage.)

Remember him? Ten days before the resignation became public on June 14, Chambers sent staff this memo that implied he would be around for months to guide the taxpayer-owned company through the privatization. But he's driving away July 6 for a new job as president of the Motor Vehicle Sales Authority of B.C., and he still hasn't responded to my numerous interview requests. 


Here's the invitation for the June 27 event:

Jay Chambers is leaving the Liquor Distribution Branch (LDB) after more than 18 years. Jay has been the General Manager of the LDB since January 1997. He joined the LDB in January 1994 as the Director of Store Operations, and in March 1994 he became the Executive Director of Retail Services.  He will be missed!  

Come celebrate Jay’s many dedicated years of service at the LDB!! Wednesday, June 27, 2012 Coffee and cake will be served at 2:00 p.m. in the Atrium at 2625 Rupert 

To sign the card & donate towards a departure gift for Jay please come by the Communications area (on Peter Martin’s desk).

Almost a month earlier, on May 30, it was Chambers treating staff for lunch. He dropped $443.93 at Joey Burnaby for eight workers. For the record, no alcoholic beverages appear on the bill, which was obtained via Freedom of Information.

Jay Chambers and the Joey Lunch