Local bars escape after provincial booze blitz
Heavy-handed tactics questioned in quest for illegal alcohol
By Andy Stonehouse
It's been a week since the provincial attorney general's office made bold announcements about the apparent explosion in illegal alcohol across B.C., with some 8,000 cans and bottles of bogus booze taken in raids in the fall and spring of 1997 and 1998.
According to the AG's office, the province-wide crackdown was aimed at protecting the rights of consumers and protecting them from potential health risks.
Many people now concede that the issue seems to be more about the province protecting its lucrative alcohol-driven tax base, as more restaurants and bars are taking the cheap route and buying less expensive grey market alcohol from Alberta or the United States.
Now even customs and excise officials are suggesting the province may have to adopt its own B.C.-specific labelling to prove that provincial liquor taxes have been paid. They also say the new get-tough campaign will continue, with random checks a possibility in the future.
Between September 1997 and March 1998, a province-wide crackdown was carried out with 120 bars and restaurants across B.C. facing spot inspections. Liquor inspectors, backed up by members of the RCMP's customs and excise branch, Revenue Canada customs officers and local police, went after establishments considered to be a high risk for dealing in illegal alcohol.
Those risk factors apparently include facilities which offer cheap drink nights, are located close to the U.S. or Alberta border, or where official liquor purchases seemed low in relation to their seating capacity.
In total, 8,000 bottles and cans of illegal alcohol were seized from 73 facilities, although only eight liquor licences were suspended. The eight establishments that face suspensions are all located in the Lower Mainland or on Vancouver Island.
Fifteen establishments in Whistler were inspected, but the liquor licensing branch has refused to provide names or details of any offences until the full investigation is complete.
According to sources within the local hospitality industry, the problems discovered by inspectors were minor, such as a business owner transferring liquor from one of his operations to another he owned, rather than going through the process of repackaging it and sending it back to the liquor distribution branch.
Ben Horne, owner of the Shoestring Lodge, Boot Pub and Gaitors Restaurant, said he was a little surprised when liquor inspectors burst through his doors in November, startling his evening customers.
"They were pretty heavy-handed about it," Horne said. "I think it could have been done in a less disruptive manner. They came in at a peak time, about 7:30 p.m. and disrupted our patrons."
Horne said inspectors demanded to see receipts proving that all of the bottled alcohol behind the bar had been purchased through the B.C. liquor branch. He said the whole campaign seems to be about protecting the province's liquor taxes.
"Given the fact that the government controls the distribution of alcohol, I'm not at all surprised to see that law enforced. They're protecting their own interests. I think it's purely paranoia on the part of the government machine."
Sgt. Bill Hiney, a member of the Vancouver RCMP's customs and excise branch, said the new crackdown stems from legislative amendments passed last August which allow the province to conduct raids to determine the origins of alcohol sold at licensees. Hiney said he participated in the local raids and expects to return again in the future.
"People say this is a victimless crime, but we're seeing licensees with ties to the criminal element, especially if they're supporting an organization that's supplying it," Hiney said.
"I'm sure a lot of them started off as entrepreneurs, getting involved in smuggling by running cube vans in from Alberta, but now they're into other areas of smuggling. There's a great amount of taxes that go down the drain — now we're into the millions of dollars."
Hiney said that a majority of the liquor seized throughout B.C. was legitimately packaged but there was no way of determining where it had been manufactured. Some was likely Canadian liquor, destined for the states but intercepted and smuggled back to Canada, while other liquor came from duty-free supplies packaged for overseas markets but diverted back to B.C.
A small portion of the liquor seized may also have been made at u-brew operations, especially home-manufactured wine, and then resold to the public.
"We also saw may businesses who chose not to use their liquor licenses and were buying alcohol over the counter at the liquor store, giving them the option to pocket the taxes. It's easy to make $200 in profits off a single bottle that way."
Hiney said his department has made a recommendation to the B.C. government that alcohol sold in B.C. be clearly marked as such to help prevent future tax evasion. There was no word on what such additional labelling would cost.