BCLDB to Force “Wholesale” Customers to use BCLDB Credit Card for all Purchases

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The BCLDB sent out a bulletin on February 16, 2011 to all so-called wholesale customers, that is, all customers who buy from the BCLDB (liquor stores, restaurants, etc.) to announce that they may soon be required to use a BCLDB credit card to make all their purchases. This forced mode of payment restricts the business choices of all companies that buy from the BCLDB and it eliminates all purchaser’s ability to use their own credit cards with their own bonus plans (such as airmiles).

The BCLDB announced that it is looking to partner with a single financial institution to implement this new credit card. Why is this happening? My guess is because the BCLDB did not hit its revenue target last year and so it is looking for ways to make a quick buck. Partnering with a single financial institution is sure to include a deal that this institution pay a significant amount of money to BCLDB for the privilege of carrying hundreds of millions of dollars of private company debt.

In my opinion, this is another example of a flat out abuse of power by the BCLDB and it infringes on businesses rights. The BCLDB is losing revenue because their stores and service are inferior compared to their private counterparts. Rather than realize that the private sector is doing a better job and seeking to help them succeed (and thus pay more taxes), the BCLDB is implementing another inane policy that only impacts their myopic short term goals.

The real problem here is that this sort of insanity will likely not end with this policy. As the BCLDB continues to lose revenues to private stores that are more efficient, offer better selection and better service they will continue to implement these sort of underhanded and anti-competitive tactics to prop up their lagging revenue.

Is it not time to get rid of this “bully in the playground” – the BCLDB? I say yes.

Comments

  1. Martin Williams
    February 16, 2011

    That is NOT cool!

  2. Leo Hsiao
    February 16, 2011

    I wonder how they’re gonna show it on their financials.. maybe like this:

    Revenue from ripping off the little guys – 10 mil

    Well I doubt that the banks would be paying the LDB an incentive because there’s not much money to be made from loan interests. Good business owners would not use high interest rate credit cards to finance their day-to-day operations.

    The money is probably in the payment processing fees, which is typically at 2~3% of the payment.. that’s why the banks can offer 1% cashback on credit card purchases. Though with BCLDB’s size, their fees are probably lower than 2% to begin with. By going with a single financial institution, they can negotiate a lower rate and save themselves millions.

    They probably don’t see this as unethical either.. they’d probably just think that credit cards are credit cards.

  3. Shea
    February 16, 2011

    Thanks Leo, though I am not sure all the agents are necessarily efficient with their debts, so there may be some form of incentive there. Thanks for the info.

  4. Rod Phillips
    February 17, 2011

    What makes this whole situation sadder is that the guy in charge of the ministry, Rich Coleman, who formerly was of the opinion that BC Liquor Store should be eliminated is now singing their praises. The evidence shows that he is completely out of touch with the reality of the issues at the BCLDB and that his only reason for wanting this file is to insure significant campaign donations from his friends at the Association of Canadian Distillers (Diageo, Corby, Bacardi), Canadian Brewers Association (Molson/Labatts)and the BC Wine Institute (Vincor, Peller Estate, Mission Hill).
    This is just another in a long line of of transgressions enacted by the LDB with the rubber stamp of a lame duck minister. The only solution is a completely level playing field where the LDB is simply one retailer of many and the distribution side is one distributor of many.

  5. Barb
    February 17, 2011

    Just wondering, do you have a copy of the Bulletin. Just checked the LDB’s Wholesale website and they have nothing posted. Would like to read it if avalble.

  6. Shea
    February 17, 2011

    I have a copy in PDF only. If you email me I will send it to you

  7. peter rueschmann
    February 20, 2011

    it is about time something gets done to get rid of the liquor board,our system is totally anti-democratic.its a police state we are living in.to many beaurocrates overpaid and under worked,it is amazing people in b.c. have put up with this for so long.
    regards peter

  8. Shea
    February 21, 2011

    I don’t think I’d go so far as to use those rhetorical terms, but reform is certainly a necessity.

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