Martyn Brown: The curious timing of the whisky raid on Fets & friends

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      By now you have probably read or seen the reports on the B.C. Liquor Control and Licensing Branch’s raid, which targeted Vancouver's Fets Whisky Kitchen, Victoria’s Union Club and Little Jumbo Restaurant and Bar, and the Grand Hotel in Nanaimo.

      So have lots of other Scotch aficionados around the world.

      “Whisky seized in ‘prohibition-style’ raids”, the headline proclaimed in ScotchWhiskey.com magazine. The news has travelled fast beyond British Columbia’s suddenly dispirited shores.

      " 'Prohibition-style' raids on B.C. whisky joints mean double trouble for single malts," the CBC news echoed: “Eliot Ness was nowhere to be seen and Tommy guns weren't flashed, but government agents nonetheless on Thursday raided multiple B.C. bars for their booze.”

      Who says B.C. is boring?

      But really, this latest shit show is a tempest in a teapot that says more about what governments have done wrong than about the rather minor trangressions of the businesses whose patrons are mostly being hurt by B.C.’s archaic wholesale liquor distribution system.

      Some 242 bottles of specialty single-cask whisky from the Scotch Malt Whisky Society collection was labelled, sealed, and seized from Fets alone, as I understand it.

      In all, about $100,000 of the same SMWS elixir was confiscated from the four establishments that are all partner bars of that society. They got “clubbed”, but good.

      The establishments targeted in the reported “sting” were apparently selling contraband booze that had been ostensibly obtained from two private liquor stores in Vancouver and Victoria, instead of from the Liquor Distribution Branch, as required by law.

      The government-run liquor stores don’t carry and sell those specialty products to bars and restaurants; yet the LDB does make them available for purchase by private liquor stores.

      For eons, no doubt, “outlaw” bars and restaurants have likely been resolving that bureaucratic anomaly by buying liquor products they can’t get from the LDB instead from the private liquor stores that it also supplies.

      They then sell those products in full view, we are told, without hiding what is on their shelves from liquour inspectors, who in turn, do their rounds without consequence.

      One would think that the most reasonable course of action in countering any such technically unlawful retail liquor sales is to first speak with the offending proprietors and tell them in no uncertain terms that it’s not on.

      Apparently, that wasn’t what happened in last Friday’s raids.

      Why only that one type of Scotch and those four establishments were targeted is anyone’s guess, if indeed other types and brands of liquor that are also not sold to them by the LDB are also sold there or in other licensed enterprises of a similar nature.

      The liquor enforcement folks say that they “cannot comment on compliance measures taken against establishments".

      Whatever. The whole thing feels like something out of Boardwalk Empire, where bad behaviours are openly tolerated until they aren’t.

      Like that show, it raises as many questions about the role of governments and politicians as about the agents of unlawful activities that are the subjects of their erratic attention and policing.

      In B.C., media reports suggest that the practice of illicitly selling such “legally unsellable” products in liquor joints and eateries has been widespread, broadly recognized, openly practised, and quietly tolerated by liquor inspectors for many years.

      Far as we know, the taxpayers haven’t taken it on the chin by those who have flagrantly flaunted the rules they have sworn to abide by as licensed liquor vendors.

      The multiple applicable taxes on those products procured from private liquor stores and resold by bars and restaurants are presumably still being fully collected and paid to government.

      Although as Global reported some time ago, government revenues from liquor policy infractions dropped by some 67 percent as a more lenient approach to enforcement by liquor inspectors had been condoned by the former government.

      Then opposition critic David Eby slagged the lax enforcement at the time, which the branch, under his jurisdiction as attorney general, now seems intent on rectifying.

      In this case, the industry says that taxes aren’t the problem. They are ostensibly being paid as required by the private liquor stores that lawfully obtain those products, by the establishments that have broken the rules and that still charge and remit those taxes, and by the consumers who ultimately buy and drink those spirits and/or other alcoholic beverages.

      This shows the lengths some folks will go to, it seems, to offer consumers wanted choices that our government refuses to oblige. Bureaucracy, thy name is booze.

      It is a too sobering reminder of the inanity of B.C.’s antiquated liquor policies and its inconsistent enforcement practices.

      In a speech last month, Attorney General David Eby emphasized that the NDP government is placing a premium on enforcing laws and regulations.

      Raids hurt B.C.'s image

      It might take more than a “wee dram” to numb the disdain and disgust of all those Scotch lovers attending the four-day Victoria Whisky Festival who are watching the sorry spectacle unfold.

      That wildly popular tourism event (January 18 to 21) began the day before the raids were conducted.

      The timing of the raid couldn’t have been better for maximizing international attention, which ironically, has probably provided invaluable free advertising to the Scotch Malt Whisky Society, as it has also hurt British Columbia’s global reputation on any number of levels.

      The good folks @SMWSCanada had to cancel their classes and remove their brand from the consumer tasting event.

      It’s a disappointment to many, no doubt, and not exactly the kind of attention that anyone might have wanted in showcasing B.C.’s rising interest and economic output in spirit production, sales, and whisky tourism.

      Even more criminal, in my view, is what might happen to all of that premium single malt that was removed from the four offending establishments.

      Under the enforcement process authorized by the Liquor Control and Licensing Act, any liquor seized can either be “immediately destroyed or kept in storage for 30 days”.

      I shudder to think it is all either gone or going down the drain. Say it ain’t so, Joe.

      It could probably be auctioned at a premium as a cherished keepsake by many a Scotch drinker. I, for one, might just buy one of those bottles as a testament to the folly of faulty government “consultation”.

      If nothing else, it begs the question: why was this issue not addressed as part of the last much-ballyhooed liquor policy review that former attorney general and minster of justice Suzanne Anton presided over, led by her parliamentary secretary, John Yap?

      Yes, that would be the one and same John Yap who was obliged to resign from his former post as B.C.’s multiculturalism minister over the “quick wins” scandal that was also again in the news this past week.

      Strange. The problem highlighted by last Friday’s liquor raid wasn’t even mentioned in Yap’s 2013 report, or in its 73 recommendations, 66 of which the B.C. Liberals bragged were implemented.

      Yet that omission is now surely front and centre in the NDP’s current liquor review. Which makes the timing of the raid even more curious.

      It is in an interesting coincidence, I’m sure, that this crackdown has occurred only days after Attorney General Eby launched his own scathing indictment of the inept gaming policy enforcement and money laundering problems that transpired under the former government’s watch.

      No doubt, the last thing the general manager or others in the Liquor Control and Licensing Branch want to do is to leave the branch vulnerable to being accused of falling short in its enforcement responsibilities.

      True as that always has been, it is even more the case today, I dare say, given the premium that Eby has placed on the importance of proper policing and rigorous law enforcement.

      The unspoken message to all such independent government oversight and enforcement bodies is to get tough, get serious, and get cracking at enforcing the letter and spirit of every law and half-baked regulation, no matter how arcane or even nuts it might be.

      I also couldn’t help but notice another coincidence.

      On January 23, only four days after those liquor raids were conducted, Fets Whisky Kitchen is holding a Whisky Dinner to take place on that evening. It has been selling tickets to that event at $115 a plate—a bargain, by the sounds of it.

      Whether that event is still on or not, I’m not sure. Presumably so.

      Regardless, it promised to feature the Scotch Malt Whisky Society's “top UK ambassador, John McCheyne”, and six “stunning dishes” to be paired with the Society’s fine and relatively rare whiskies.

      Even without its confiscated SMWS contraband, Fets still has lots of premium single malt to fit the bill, with “over 1,300 bottles on the shelves”—or maybe only 1,000 or so presently.

      B.C. Liberal leadership candidates may find themselves discussing liquor regulations at an upcoming debate in Vancouver.
      B.C. Liberals

      B.C. Liberal debate and cannabis regulation on horizon

      But that’s not all.

      While that soiree unfolds, the B.C. Liberal leadership debate will also be underway elsewhere in Vancouver.

      It too is scheduled for January 23, to be broadcast on Global’s BC1 from 7 to 9 p.m., hosted by Keith Baldrey.

      Baldrey might ask the B.C. Liberals’ would-be leaders—including the two who served as attorneys general—why they failed to address this “glitch” that has now suddenly come to light, to say nothing of the Branch’s inconsistent enforcement history.

      No one would love to see those Liberal leadership contenders squirm more than the NDP, ideally, with some help from the likes of outsider Dianne Watts.

      To be clear, I have enormous trust and respect for the outstanding public servants who work in the Liquor Control and Licensing Branch. I am certainly not trying to in any way insinuate that their latest enforcement activities is at all politically motivated.

      I do wonder, however, whether this latest crackdown on allegedly illegally retailed Scotch has anything to do with the upcoming legalized sale of recreational marijuana, however indirectly and tangentially. Probably not, but it does put that issue as well in new focus.

      I have no doubt that the attorney general’s ministry is keen on preventing licensed pot retailers from skirting the rules in ways similar to what has now been exposed in liquor sales.

      It will be rightly intent on preventing licensed retailers from buying and reselling cannabis products from any unauthorized suppliers that the LDB is unable or unwilling to make available to those legal vendors.

      We are told that the wholesale distribution of cannabis will be managed by the Liquor Distribution Branch.

      The retail model for managing pot sales as of next July is still a work in progress. But it would be hypocritical in the extreme if the LDB applied a double enforcement standard to the sale of alcohol or pot products that did not comply with its regulatory monopoly status as B.C.’s only legal wholesale supplier.

      Perhaps the LDB is already looking down the road, to the enforcement challenges relating to any future licensed pot retailer that is accused of selling product not directly obtained from the LDB.

      Say they bought their product directly from a licensed medical grower, or from a home-grown supplier, because it is isn’t available through the LDB distribution system.

      How would that be materially different from allowing bars and restaurants to sell liquor products that the LDB knows full well they offer, and also knows that they could have only procured from private liquor stores or some other source?

      Surely the first step to proper future enforcement of weed sales and supplies is to be consistent in how liquor laws and regulations are enforced in respect of the LDB’s legally mandated role.

      Regardless, the Great Scotch Raid of 2018 has shone a long overdue light on a problem that is largely of the government’s own making. One that should have been tackled years ago.

      Perhaps the first step towards that end would be to extend a time-limited “amnesty” to any restaurant or bar that has procured liquor products for resales that violate current liquor laws and regs.

      Let’s get that information out in the open, where it belongs.

      Let’s find a reasonable way of dealing with what is really a minor public concern and problem, in the larger scheme of things.

      Let’s not unduly penalize small businesses and private clubs that are otherwise great corporate citizens, whose unique whisky establishments and extensive offerings should be a drawing card for tourism and a source of local pride, not the opposite.

      There are not many equivalents of Fets Whisky Kitchen, or the whisky bar in Nanaimo’s Grand Hotel, which like Little Jumbo and Victoria’s Union Club, do much to enhance their communities, our province, and B.C.’s food and beverage industry.

      I say, let’s allow those and other establishments that are likely now worried about what lies in store to instead keep and legally sell their stashes, provided they perhaps pay a penalty that is in proportion to their “crimes”.

      That would avoid costly enforcement and protacted prosecutions. It is what is really in the public interest.

      Let’s fix this overly restrictive liquor wholesale regime for good, in anticipation of the challenges ahead in wholesaling and retailing legalized weed—to get that right by addressing what has been so demonstrably wrong for too long in British Columbia.

      Martyn Brown was former B.C. premier Gordon Campbell’s long-serving chief of staff, the top strategic adviser to three provincial party leaders, and a former deputy minister of tourism, trade, and investment. He also served as the B.C. Liberals' public campaign director in 2001, 2005, and 2009, and in addition to his other extensive campaign experience, he was the principal author of four election platforms. Contact him via email at bcpundit@gmail.com.

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