AN INTEGRATED APPROACH

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AN INTEGRATEDAPPROACH
Improving the Regulatory Climate in BC Making a
Difference
May 1, 2007
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Agenda
LDB Overview Reg. Reform Approach Reg. Reform
Results Lessons Learned
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Liquor in British Columbia
Two Branches - Liquor Distribution
Branch - Liquor Control and Licensing Branch
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Business of the LDB

• 3500 FULL AND PART-TIME EMPLOYEES
• 200 BC LIQUOR STORES
• TWO DISTRIBUTION CENTRES VANCOUVER AND
  KAMLOOPS
• HEAD OFFICE IN VANCOUVER

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Liquor Outlets
2007 2006 LDB STORES 201 208 LICENSEE
RETAIL STORES 631 592 RURAL AGENCY
STORES 230 230 ON-SITE WINERY
STORES 154 135 INDEPENDENT WINE
STORES 12 12 OFF-SITE INDUSTRY
STORES 29 27 DUTY FREE STORES 11
11 TOTAL 1,268 1,215
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Provincial Operating Results

2007(000s) 2006(000s)
SALES 2,434,445 2,249,527 OPERATING
EXPENSES 256,302 10.5 242,428 10.8 NET
INCOME 840,286 34.5 800,471 35.6
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Provincial Operating Results
CATEGORY SALES
SALES SALES (000S) CHANGE
(000 Litres) CHANGE SPIRITS 656,904 8.3 24,39
7 4.4 WINE 616,990 12.6 48,217 7.6 PACKAGED
BEER 922,263 6.4 233,328 3.9 DRAFT
BEER 124,332 2.3 45,896 (0.5) CIDERS/COOLERS
102,724 8.3 21,190 7.5 OTHER
11,232 (4.3) 194 (3.5)
TOTAL 2,434,445 8.2 373,222 4.0
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Product Trends
SPIRITS - VODKA - AMERICAN WHISKEY - TEQUILA L
IQUEURS
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Product Trends
WINE - BRITISH COLUMBIA (VQA) - AUSTRALIA -
ARGENTINA - UNITED STATES - SPAIN - NEW
ZEALAND
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Product Trends
REFRESHMENT - CIDER BEER - COTTAGE PACKAGED
AND DRAFT - IMPORT PACKAGED AND DRAFT
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The Four Pillars Framework
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Key Strategic Issues
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Key Strategic Issues
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Regulatory Reform Approach
2001-2004 Project Management 2004-2008 Business
Integration
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Project Management
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Change Management

• Risk Management
• risk identification
• risk assessment
• mitigation elimination

• Communication Strategy
• internal
• external

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Communications

• Internal
• employee newsletters, Intranet
• team coaching, e-mails, meetings
• executive, mid-managers meetings
• External
• industry newsletters
• industry meetings, stakeholder consultation
• LDB annual report, Regulatory Reform reports

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2001-2004 Targets
Government New Era commitment reduce Red Tape
by 33 by June 2004 LDB target reduce
requirements by 50 by July 2003 by another 4
by June 2004
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2001-2004 Objective
Increase opportunities for private sector to
improve competitiveness and efficiency focus on
suppliers, agents, warehousers, vendors, private
retailers and retail customers How simplify and
reduce requirements in legislation, policies and
procedures
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Guidelines

• Why do we need the requirement?
• What public interest does it address?
• Public safety
• Revenue collection
• Is it necessary for government to be
• involved, or are there other ways of
• achieving the public interest goal?

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More Guidelines

• Outcome or results-based ? prescriptive
• or process rules
• Transparency, consultation with affected
• parties
• Cost-benefit analysis alternatives,
• compliance burden
• Competitive analysis BC economic
• competitiveness, productivity, effect on
• small business

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More Guidelines

• Harmonization with other jurisdictions, no
• duplication or overlap, national standards
• Timely response, easy to administer
• Plain language, easy to understand
• Sunset clause update or eliminate rules
• Remove a requirement for every new one
• created

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And More

• Information technology to streamline,
• consolidate
• Alternative forms of regulation, including
• self-regulation
• Regulation not used to defend market
• position
• Enforcement risk management,
• accountable, directed to major problems

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2001-2004 Results
Baseline count 5022 As of June 5, 2004 2333
Change -53.54 Bronze Award 3rd greatest
reduction
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2001-2004 Highlights

• Supply Chain
• Agents and Suppliers
• Manufacturers, Producers
• Retail
• Private Retail Outlets
• Licensee Retail Stores
• Rural Agency Stores

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Supply Chain

• Liquor Appeal Board eliminated
• Flexible pricing (to the penny)
• New Excise warehouses
• Reduced manufacturers reporting
• Harmonized discounts

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Promotions Program

• Focused on government stores
• Eliminated LDB conducted Taste
• Streamlined procedures
• Single indemnity agreement for all
• promotional activities
• Greater flexibility in type and size of
• promotional material
• Use of LCLB, federal govt requirements

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Private Retail Outlets

• Operators choice
• Coordinated rules for private retail
• Home delivery allowed
• Eliminated requirements for insurance
• Minimized rules re cash registers
• Simplified product ordering and return
• Reporting streamlined or eliminated

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Licensee Retail Stores

• Liquor Control Licensing licenses
• Allowed spirits, on-packs
• Increased discount rate
• Harmonized empty container requirements - BC
  Recycling regulation

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Rural Agency Stores

• More opportunities for small businesses
• Broader eligibility criteria
• Authorization by General Manager, no expiry
• Relaxed rules hours of operation, store
• improvements, sources/assortment of product
• Elimination of minimum order requirements
• Elimination of closure Xmas Day, Good
• Friday, Easter Sunday

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Integration into Business
the baton is now in your hands!
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2004-2008 Target

• Target no net increase improved quality
• Complete review and update
• Liquor Distribution Act 71 requirements
• Liquor Product listing, purchasing, distribution,
  wholesale, pricing 1003
• Private Retail Stores 976
• Document/publish LDB policies procedures

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Roles

• Executive accountable for results
• Mid-managers responsible for identifying
  
  
  reform opportunities, achieving
  results
• Coordinator
• communication and reports
• coordinate plans and follow-up
• ensure LDB sets/meets objectives/targets

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2004 2008 Results to Date
As of March 31, 2007 baseline 2333
183 eliminated 25 added 6.8
reduction
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Supply Chain

• New category registered product
• Marketing plan requirement eliminated
• Web application
• 24/7 access and status
• Approval time improved
• Reduced data entry and errors
• No minimum 0.10 price change
• Consistent payment terms
• Recycling fee incorporated into price

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Private Retail Outlets

• Wholesale to Private Businesses
• Direct Delivery Service
• Licensee Retail Stores
• Removed Requirements re Empty Containers
• Eliminated Sales Shortage Report and Discount
  Refund on Shortages
• Increased Purchase Discount
• No LDB Authorization needed for LRSs

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BC Wineries

• Off-site store appointments
• Less restrictions on stores
• Allowed sales to Duty Free
• Reduced reporting requirements

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Other Retail Changes

• Gift cards introduced
• In-store refund amount increased
• Rural Agency Store discount refund eliminated

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Citizen-centered Reform

• LDB Authorization for LRSs eliminated
• Impl. March 13, 2007 (-81 requirements)
• New licenses streamlined by up to 2 weeks
• 1-week reduction for ownership/name changes
  and relocations
• Wholesale Order Management
• Target implementation November 2007

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Lessons Learned

• Change is not easy allow time
• Identify and grow champions
• Executive support is crucial
• Set clear targets and objectives
• Structure team, processes for meeting them
• Visibility is important

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Lessons Learned

• Communicate, communicate, communicate
• Consensus is not always possible
• Some businesses like prescriptive rules
• Look long term, persist
• Easy wins first, take it in manageable bites
• Celebrate success

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Contact
Diane Fontaine Manager Information Programs BC
Liquor Distribution Branch 604-252-3011 Diane.font
aine_at_bcliquorstores.com www.bcliquorstores.com