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British Columbia Wine Store Auction for Grocers Wraps Up

February 2017
 
by Peter Mitham
 
 

Vancouver, B.C.—British Columbia auctioned off an additional six licenses for wine stores in December, but it could be months before the results are known.

“At this point, the results are being audited for fairness,” a spokesperson with the B.C. Ministry of Small Business and Red Tape Reduction, which oversees the B.C. Liquor Distribution Branch and the province’s state-run liquor distribution and sales regime, told Wines & Vines.

BC Auction, the government-owned vendor of surplus government assets, sold the licenses on six dates between Dec. 6 and Dec. 21. Auction terms required that bidders submit a deposit of $25,000 and place minimum bids of $125,000 for each license (all amounts are in Canadian dollars). Participation was limited to grocery retailers with stores no less than 10,000 square feet.

Ministry staff declined to identify the successful bidders, while the third-party audit is ongoing. On completion of the audit, approved purchasers will be able to make a formal application to license their premises to sell wine.

An initial round of auctions that concluded May 5, 2016, saw Loblaw Companies Ltd. of Brampton, Ontario, acquire six licenses for $6.9 million. It took the province six months to officially announce the results, though details were circulating among industry insiders well before then.

However, ministry staff said these auction results will “hopefully” be announced sooner than in the previous case, noting that the audit should proceed faster the second time around.

Bert Hick, principal of the liquor license consultancy Rising Tide Consultants Ltd. in Vancouver, said his sources indicate that final bids were again in the million-dollar range, but hard data has been tough to get. Loblaw is tipped among the successful auction participants, as is another major supermarket operator.

Successful license applicants from the latest round will join Overwaitea Food Group and Loblaw, which have been selling wine through the previous acquisition of licenses.

“If you connect all the dots, in my view, you could have two, maybe three major grocery groups that have exclusive control of wine on grocery store shelves in British Columbia,” he said.
 

 
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