Don't stand so close to me
By Peter Mitham

Four walls are better than three in the mind of the Alberta Liquor Store Association, which backs a recent decision by the province to uphold the separation of liquor stores from larger stores under the same ownership.

A consultation by the Alberta Gaming and Liquor Commission last fall concluded that there would be no disadvantage to allowing businesses occupying more than 10,000 square feet to operate an adjacent liquor store with no separation between the two stores. Regulations upheld in February require a separate building envelope and physical separation, but the details have been a matter of debate.

To date, retailers have set up separate premises with four walls, but large operators such as Costco and grocers wonder why it couldn’t just be three walls so long as the liquor business occupied its own premises with its own entrance, loading area and staff (as required by the regulations).

Lynn Hutchings-Mah, spokesperson for the Alberta Gaming and Liquor Commission said the province has no intention of allowing liquor sales in grocery stores. Rather, the consultation addressed concerns with the long-standing prohibition on common walls.

“We’ve had people say, this just doesn’t make sense, and we’ve also had some companies comply with this regulation by leaving a token space,” Hutchings-Mah said. “In some communities that’s led to a concern about trash build-up, fire safety and in some communities they’ve insisted that rather than seeing the couple-inch gap that [retailers] put up a false front over it so they look like one building.”

Allen Langdon, vice-president, Western Region with the Canadian Council of Grocery Distributors, said his members operate approximately 90 liquor stores in Alberta, about 5% of the provincial total. His association participated in the consultation because members don’t see why they can’t set up a liquor store next to themselves when another operator could. “That’s obviously unfair and it provides a significant advantage to the non-grocery operator,” he said.

“It’s more of an issue of evening the playing field rather than any advantage that we would gain. We think that if this goes through, all it’s going to do is eliminate an unnecessary regulatory requirement that creates barriers to competition and provides no added value or convenience to Alberta consumers.”

Moreover, Langdon points out that the regulations are unclear as to what constitutes separation. A separate building envelope is one thing, but there’s no definition of what distance satisfies the terms of physical separation. “How far away do you have to be?” he asks. “What they wanted is separation of product. So from my perspective, if you have a common wall, the supposed objectives you want as part of that regulation are being met.” The development of private liquor retailing in Alberta since 1993 should also allay concerns, Langdon says. “We just want the same treatment that everyone else has.”

Allison Byrne, chair of the Alberta Liquor Store Association, says the change would have tipped the field in favour of large operators in rural areas. Allowing common walls would mean a large operator in a rural area could simply throw up three walls to establish a separate retail space for liquor, she says. The building systems would be the same, reducing infrastructure and operating costs for large operators and potentially allowing the demising of a part of their premises for liquor sales (Hutchings-Mah said that’s neither in the letter nor the spirit of the regulation).

“A large corporation that already has a building wouldn’t have to invest as much money,” Byrne notes. “They’re saying we can put wording into the regulations to ensure there are no carve outs … we haven’t seen any wording, we haven’t seen any proposed wording.”

Byrne said rural operators are most at risk if the change goes ahead in the future, because there’s more room for expansion in areas outside Edmonton and Calgary where municipal regulations govern the concentration of liquor stores.