Banning craft beer

My old home province of Manitoba didn't quite make commercial brewing of craft beer illegal. But they might as well have. Bartley Kives delves into the morass of Manitoba liquor regulations. Keep in mind that many of these regulations are the kinds of things that New Zealand's neo-prohibitionists would support. Fortunately, things look set to ease up in Manitoba. A bit.

Here's Kives:

Right now, licence holders are not overly pleased. There are 12 different liquor-licence categories in the province, each with its own set of rules and annoyances.

For example, hotels may obtain a licence to sell alcohol in a "beverage room," but only if they also have a liquor licence for a "dining room," which must remain open when the beverage room is open. As well, hotels can only obtain a beverage-room licence if liquor authorities grant something called a hotel certificate, an official stamp of approval the Manitoba Hotel Association dislikes because it may apply to businesses that actually function as long-term rental-apartment blocks, as opposed to actual hotels where tourists and business travellers stay for a short period of time.

Restaurants, meanwhile, may also obtain a dining-room licence, but must ensure alcohol sales do not exceed 60 per cent of gross revenue. Restaurants may also obtain a "cocktail lounge" licence where customers do not have to purchase food, but the combined restaurant-lounge must still maintain the 40-60 food-to-alcohol ratio.

There's also a cabaret licence, which does not demand any food sales but does require licence holders to exhibit two hours of live entertainment every day. That entertainment must be visible from every room in the venue and must not involve recorded music.

As a result of these regulations, hotels that rent out space to pizza parlours in an effort to fulfil the dining-room requirement of their beverage-room licence have been hit with violations when the sole dining-room employee goes out to deliver a pizza.

Popular restaurants with lounges are forced to turn customers away simply to maintain food-to-alcohol ratios. And cabarets cannot satisfy the live-entertainment provisions of their licences by booking club DJs, many of whom are among the biggest draws in live music today. That's because of a literalistic interpretation of a cabaret-licence provision against recorded music, which was created to protect jobs for musicians in the age of jukeboxes.

It gets worse:

When cabaret owners offer to circulate a guitarist, accordion player or some other wandering minstrel around a level with no live stage, they are told those musicians must be miked up and broadcast, too.

"Even they say it's stupid," Kendrick said.

Hua, meanwhile, was forced to puzzle over which licence would best serve the Rec Room, his new Pembina Highway sports lounge, which will feature foosball, Ping-Pong and arcade games. "There's no licence for an entertainment hall that has Ping-Pong," he lamented.

And once you have a whole industry in place that has fixed investments based on a set of stupid regulations, it's harder to get rid of the regulations:

John Scoles, the proprietor of the Times Change(d) High & Lonesome Club, a Main Street roots-music venue, said he believes small venues will benefit the most from liquor-licensing reform.

"Small venues are the ones that struggle the most to meet licence requirements," said Scoles, who found the right formula for his own small venue in 2004 when he converted it into a private club from a restaurant and lounge.

"It never seemed success in this business was based on entrepreneurial ingenuity. It was based on what parameters you were forced to observe. Nobody could just have a great idea. They had to have a great idea that was shaped by something else."

But Manitoba isn't moving toward a free-for-all. For example, the new liquor-and-lotteries act will still require restaurants to maintain some form of food-to-alcohol sales ratio, Chomiak said.

There's a social benefit to serving meals with booze, he said. And more politically, the province isn't prepared to undermine entrepreneurs who've invested heavily in restaurant-lounge concepts such as Earls, Moxies and the Keg, which have proven extremely successful in recent years.

"We're not going to step all over people who've invested in infrastructure," said Chomiak, referring to independently owned restaurants as well as the chains.

Kives reports that there are zero brew pubs in Manitoba - population about 1.2 million.

Manitoba has a state monopoly on liquor sales: the Manitoba Liquor Control Commission. They keep prices fairly high. The province has a 0.05 drink driving limit.

And yet alcohol is a factor in over 40% of all traffic accident fatalities in Manitoba (2007 figures). In New Zealand, alcohol and drugs are implicated in about 30% of traffic accident fatalities. The total number of deaths will be higher, as we have roughly four times Manitoba's population and our roads are terrifying.

Note that percentages in the table below can add to more than one hundred as accidents can have multiple causes.

Table 26a from the same document shows about a ten percentage point drop in the fraction of accident fatalities involving alcohol from the late 1980s / early 90s to present. 

I hope that the local-level regulatory activity enabled under New Zealand's recent revisions to alcohol regulations do not wind up making parts of New Zealand look like my old home province.