Skip to main content

BC Liquor Store located on Commercial Drive in Vancouver, B.C., on Thursday, Nov. 28, 2013. British Columbia’s Liquor Distribution Branch has been overpaying commissions to commercial wineries for years, with the value of the overpayments in the seven-figure range.Rafal Gerszak/The Globe and Mail

British Columbia's Liquor Distribution Branch has been overpaying commissions to commercial wineries for years, with the value of the overpayments in the seven-figure range.

The B.C. government has been overhauling the province's liquor laws for more than a year and has faced a barrage of criticism from wineries, craft brewers and restaurateurs.

The overpaying of commissions was discovered in March. A briefing note prepared for Justice Minister Suzanne Anton – who had been the minister responsible for the liquor file until she was replaced in July – says the overpayments were due to a "system error."

"The LDB has been overpaying commissions to commercial wineries for their sales to wholesale customers. … The LDB was paying a 7 per cent commission on the retail price instead of the discounted price," says the note, which was prepared in April and released Thursday by the opposition New Democratic Party.

The note says the branch has been overpaying "over the years" and the total value is in the seven-figure range, though it does not provide specifics.

Thursday, during Question Period, the NDP pressed Coralee Oakes, the Minister Responsible for the Liquor Distribution Branch, for further details.

"If this government makes a mistake and overpays someone on income assistance, they're quick to claw that back. … But when this government makes a mistake and overpays commissions on commercial wineries, this government and this minister do nothing and they won't even share with taxpayers how much that mistake costs," MLA Carole James said.

She went on to ask Ms. Oakes how much the error had cost and what the government planned to do about it.

Ms. Oakes, in response, said, "We have a plan." She then repeated an earlier point about consultation with businesses and the public.

"We are clearly working closely with our small and medium-sized businesses to ensure that they are successful. We are in transition.

"We are working through opportunities to ensure that consumers in British Columbia have the choice that they have clearly asked for," she said.

The minister later told reporters she was confident the problem had been resolved and it would have made little sense to try to recoup the money – though she did not disclose the value of the overpayments.

"When it was reviewed by legal counsel, it was identified that it was in the public's best interest, if you were looking at the legal fees, that the cost of the error – and it was an error on our part – that it would cost more to go through legal challenges," she said.

The minister said she has requested a technical briefing on the matter.

The briefing note says the commission exists because the commercial winery is selling on behalf of the Liquor Distribution Branch and incurs the cost of delivering product. The branch pays the winery a percentage of the branch's revenue to recognize that cost.

The note says that once the error was discovered some wineries suggested the wholesale commission rate should be increased, to ensure the same amount of money was being paid out.

An e-mail to the branch by Josie Tyabji of Constellation Brands Inc. was appended to the briefing note. Officials with Mission Hill Winery and Andrew Peller Ltd. were copied on the e-mail, in which Ms. Tyabji requested the wholesale commission rate be increased from 7 per cent to 8.2 per cent.

The branch rejected that request.

Ms. Tyabji could not be reached for an interview.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe