Stocking the bar
A behind-the-scenes glimpse of Alberta's liquor distribution hub
Saturday, Feb 22, 2014 06:00 am
Privatization at the store level
What he likes about privatization is the ability to dictate what he sells at his store.
Throughout the week, he spends his mornings taste testing and discussing a selection of wines with a representative from a new distillery. If he likes the product, he will order it to sell at his store.
“I like the idea of having a rep coming into the store and letting me personally try the product,” he said. “Because I am the one who will end up selling it in the long run and I need to know the product.”
Peters won’t comment whether having one main supplier for liquor in the province is ideal or not. But he acknowledges that there are problems that come with a free market.
Before privatization, stores had a limited selection and they all sold the same product at the same cost, he said. Now they can choose from a much wider selection, but also struggle with the growing price competition from chain-run liquor stores, he said.
Store operators also have to be careful about filling up on stock before holidays, such as Christmas. Otherwise, stock quickly runs out and sometimes companies don’t deliver to the warehouse until well into March.
“We’re fortunate because we have a lot of storage space but we plan ahead. I start buying in October for Christmas,” he said. “But a lot of the stores are not able to do that. They don’t have the bankroll or the space.”
The high-pitched honking of vehicle horns is all you hear when you first walk into the warehouse. It’s a wild cacophony of toot-toots as employees race around on electric pallet movers, making their presence known with a double honk each time they’re about to zip around the next corner.
This is the Alberta Gaming and Liquor Commission’s distribution centre, at 50 Corriveau Ave. in St. Albert. At 430,000 square feet, it’s the largest warehouse in Alberta – home to more than 3.8 million cases of liquor. It’s where the operators of liquor stores and restaurants go shopping (figuratively speaking).
It’s a busy place, handling all the liquor, wine and foreign beer sold in the province. That won’t last. Changes are in the works that will forever alter the routine here, changes that promise to improve the flow of wine and spirits throughout the province.
Racks of riches
The government-run commission has overseen the distribution of spirits from the local warehouse since the privatization of liquor retailing in 1993. The commission establishes the policies, organizes payments, and authorizes the operations of Connect Logistics Inc., a private company contracted to manage the movement of liquor in and out of the building.
The product arrives at the warehouse by truck from more than 400 companies across the globe and domestically. From Baileys to port wine – the warehouse has more than 19,500 different products available. Only domestic beer escapes its hold, as it’s sold and shipped directly by Canadian suppliers.
While the commission manages the sales and distribution, the suppliers determine the inventory levels, said Alain Maisonneuve, commission vice president of liquor services. Suppliers register their products with the commission, which then adds taxes and shipping costs for the retailer.
“Once it’s approved, we electronically transmit the information to Connect Logistics so they know the product is available to be registered,” Maisonneuve said.
In the highest part of the building, the industrial storage racks soar to a breathtaking height of eight stories. This is where most of the product is stored, on more than 200,000 pallets. The shelves are like a hall-of-mirrors illusion: a seemingly endless line of liquor bottles.
Computerized cranes move up and down the seven aisles, plucking pallets of wine and liquor from the shelves and lowering them to the bottom. An automated computer system tells the employees via headset what liquor to pick up.
Orders are processed within 48 hours, mostly electronically, from calculating how many cases fit on a pallet, to determining how to stack them properly and letting retailers know if a product they ordered is out of stock. The automated system even perfectly wraps each pallet before a worker places it on a truck with a forklift.
In the back of the hall stands a large cooler, now in the process of being expanded from 4,000 square feet to 17,000. It will soon allow for the storage of more unpasteurized products.
“That’s an important new thing because the beer industry in Alberta, there are a lot of new craft beers. There’s a lot of unpasteurized beers,” Maisonneuve said. “And brewers from inside of Alberta as well as outside of Alberta are using this warehouse.”
What if it breaks?
Hiding at the end of each rack is a mop and broom, in case something breaks. Policy dictates that damaged bottles are to be thrown out, not delivered. Still, not every drop of liquor makes it to the retailer.
In the back corner of Campbell Liquor Store in St. Albert, store manager Chris Peters shows off a collection of bottles and boxes containing liquor that he can’t sell.
“Some of the product gets sent to us broken, sometimes the bottles are missing out of cases,” he said. “We just got a two-four of beer that had two empty beer bottles with the caps on them.”
In the case of returns, domestic beer can be returned to Canadian companies, he said. With all other products, Peters has to wait for a visit from the distributor so he can get a refund. He can’t get a refund from Connect.
New warehouse in the works
The commission now operates three other warehouses in the Edmonton region, because the main warehouse isn’t large enough to store all the product it handles. In the long run, it plans to bring all of its product under one roof, which will change operations at the St. Albert warehouse.
A location for the new warehouse has not yet been announced, but a news release issued last fall said the centre will be built in 2014. Maisonneuve said the commission is looking for a location close to St. Albert.
The new building will serve as the province’s main supplier for spirits, wine and imported beer, and eliminate the need to lease extra storage space. With more than 550,000 square feet of storage area, it will also merge all storage and shipping functions, ensuring a faster and more cost-efficient supply system, Maisonneuve said.
The extra facilities being leased will likely close while the St. Albert warehouse will be re-engineered to support the new facility.
In the future, it will house slower-selling, specialty liquors, said Maisonneuve.
“When we build a new facility, the new facility will be the fast moving one and this will be a storage area,” he said.