Liquor And Related Business Matters

February 12, 2015   |   by Dennis Coates QC

The combined effects of the competition from the chain restaurants catering to casual fine dining, the new drinking criteria and the economy have severally affected the pub industry both operationally and in terms of operating profitability and resale value.

One of the solutions to consider may be to reduce the size of the LP area and substitute an FP area to cater to family units or those wanting a quieter atmosphere. The rules are quite simple to achieving this. Access to the restaurant area cannot be via the pub. Neither can restaurant patrons be required to enter the pub area in order to access the washrooms. Pub patrons, on the other hand, may go through the restaurant both to enter or to reach the washrooms. You should program the till, which can be common to both areas, so that the food and alcohol products for each area can be identified. You can run with a common liquor inventory and service bar. The separation between the two is a discretionary matter which may be a wall or a 42 inch separation or less depending on the configuration of the space. This FP/LP combination may in some markets allow you to maintain volume. The FP area, if 50 seats or more, can contain a restaurant lounge where food consumption is not compulsory. This FP lounge is best suited to the seats along the service bar to a maximum of 20% of the main restaurant capacity.

The provision of a rides home for patrons in pub-owned transportation should be carefully implemented only after confirming insurance issues on the vehicle. Similarly- the use of on site breathalyzers should be carefully implemented as there are some problems surrounding the use of breathalyzers generally.

The LCLB continues with an active enforcement program primarily focused on underage patrons, over service of patrons, and overcrowding, although the latter is not of the same concern or frequency in this economy. LRS operators need to be particularly vigilant about minors through utilizing tools such as the ABLE ‘two pieces of ID’ buttons for staff and devices on the tills for screening drivers licenses. The only defense a licensee has is due diligence and an establishment’s policies in due diligence should be reviewed regularly to ensure they are being utilized and implemented. The most common include regular staff meetings, written acknowledgement of the existence of the operational policies by all employees, and written training material for all employees. Relying on the serving it right material for over service is not, in my opinion, sufficient. Keeping incident logs on a daily basis is also a must.

Minor Relocations
Do not assume that if you want to move your LRS a small distance such as 100 feet that it will not be a problem. The recent increase of the separation of LRSs from .5 km to 1 km has introduced some issues with these minor relocations. The LCLB will not endorse these moves unless there is a real loss of interest in property. There are a couple of cases, ie judicial reviews, winding toward the courts where moves from the back to the front of a hotel property, or the move further away from the nearest LRS to a larger location, or even in instances where the LRS within the prohibited zone has provided consent. Even if you own both locations your consent will not necessarily compel the LCLB to endorse such a minor move.

Selling to Caterers
There have been several instances where LRS operators have been prosecuted for selling to caterers. The rule that LRSs cannot sell to licensees prevails. Caterers often take out Special Occasion Licenses and product purchased under those SOLs must be procured from the LDB. The wish is that the LCLB will allow sales to SOLs in the future, which would allow some LRSs to participate in these catering opportunities.

You may have noticed that the ads for outlets such as the ‘Everything Wines’ stores offer online sales opportunities and delivery within BC. Most LRSs do not take advantage of this delivery and ordering option but it is a growing market.

Trade Practice
The anticipated revision to the relationships between manufacturers and licensees may open up opportunities for selling advertising with LRSs, which currently is prohibited. Apparently, the discussion paper on this topic will be issued by the LCLB in early spring.

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