Quotulatiousness

February 6, 2013

Municipality really eager to get their parking revenues

Filed under: Bureaucracy, Law, Middle East — Tags: , — Nicholas @ 10:18

A woman in Tel Aviv was lucky to be able to get security camera footage to prove her innocence here:

The Tel Aviv Municipality found itself in hot water on Tuesday, after a Facebook post by a woman whose car was towed after city workers painted a handicapped space around the vehicle went viral, becoming a mini-scandal and garnering coverage across Israeli media outlets.

Security camera footage from a store above the parking spot on Yehuda Halevi Street shows the car parked at a legal blue parking spot, before city workers arrive and paint a handicapped spot around the car, which is towed shortly thereafter.

The video was obtained by the owner of the car, Hila Ben-Baruch, from the surveillance camera of the store above the parking spot.

I once saw something similar happen in real time: in the mid-1970’s, I was waiting for a Mississauga Transit bus when a work crew from the city came along. The crew started putting up “No Parking” signs along the road, and a Peel Regional Police officer came along a few minutes later to write parking tickets for all the cars which were now illegally parked. The bus I was waiting for was on something like a 45 minute schedule, so this all took place within that stretch of time.

Why does every infrastructure project cost more?

Filed under: Bureaucracy, Government, USA — Tags: , , , , — Nicholas @ 00:01

In his nominally NFL-related column, Gregg Easterbrook usually manages to insert interesting topics that are not in the least related to football:

Where Is the Bridge to Nowhere When You Really Need It? Another reason unprecedented increase in the national debt is not resulting in newly built infrastructure to help the economy grow is that government projects keep taking longer and costing more. Two years ago on Reuters, your columnist opined, “A combination of top-heavy bureaucracy, union rules, cost-plus profits and graft have made recent federally funded construction projects insanely expensive and slow. When the funding comes from borrowing by Washington, then businesses, unions and local petty officials have a self-interest in running up the cost while dragging their feet.”

That column ended by noting the slow pace and cost overruns in plans to replace the Tappan Zee Bridge on the Hudson River north of New York City.

Now two years have passed, and guess what’s happened to the Tappan Zee Bridge replacement project? It’s no closer to beginning. New York Magazine reports that $88 million has been spent just to study a bridge replacement — not for architecture drawings, just study. The original Tappan Zee Bridge, completed in 1955, cost $675 million in today’s dollars and required three years to complete. New York State officials are saying the replacement will cost at least $3 billion and take five years to build. New York Magazine warns the price is lowballing for an expected cost much higher.

New York is demanding that the federal government fund most of the new bridge. Borrowed funny-money would be used; contractors and unions would have every incentive to drag their feet, running up the bill, while corrupt politicians would want the project to last as long as possible, so there was more funny-money to steal.

Meanwhile the existing Tappan Zee Bridge continues to crumble and nothing’s being done. At the current snail’s pace, a new bridge is many years away. What if the existing bridge collapses? Politicians will claim they were never warned, just as they claimed they were never warned before storm surge from Hurricane Sandy smashed up lower Manhattan, Long Island and Hoboken, N.J. Running up the national debt is bad enough; not building what the country needs is even worse. But politicians observe that behaving recklessly, then blaming others, is what advances their careers. Barack Obama acted recklessly with the nation’s finances, and was re-elected. Chris Christie did nothing to prepare New Jersey’s low-lying city from storm surge, then blamed others, and made the cover of Time magazine. Where is the political leader who will place acting responsibly ahead of self-promotion?

February 3, 2013

Bureaucracy and the would-be small business owner

Filed under: Bureaucracy, Business, Cancon, USA — Tags: , — Nicholas @ 11:40

It took me less than a day to start my own business — and it was all done online. We have it good: Canada is at the top of the league table for ease of starting a new business. Americans don’t have it as easy as we do:

Last week, having read my own writing about how it’s cheaper to buy a house than rent one in most markets, I decided to take my own advice. My wife and I bought a new place, and instead of selling our old condo, we’re going to rent it out. And thus I became a small-business man.

Or, rather, I’m becoming one. Entrepreneurship — even on the smallest and most banal scale — turns out to be a time-consuming pain in the you-know-what. My personal inconveniences aren’t a big deal, but in the aggregate, the difficulty of launching a business is a problem and it may be a more important one as time goes on.

[. . .]

The striking thing about all this isn’t so much that it was annoying — which it was — but that it had basically nothing to do with what the main purpose of landlord regulation should be — making sure I’m not luring tenants into some kind of unsafe situation. The part where the unit gets inspected to see if it’s up to code is a separate step. I was instructed to await a scheduling call that ought to take place sometime in the next 10 business days.

Not that I expect your pity. I don’t even pity myself. Going through the process, I mostly felt lucky to be a fluent-English-speaking college graduate with a flexible work schedule. But the presence of a stray pamphlet offering translation into Spanish, Chinese, or Amharic seemed like it would be only marginally useful to an immigrant entrepreneur. A person who needs to be at her day job from 9 to 5 would have a huge problem even getting to these offices while they’re open.

The bureaucratic hassles of entrepreneurship turn out to vary pretty substantially from place to place. The World Bank has a fairly crude measure of how easy it is to start a business in different countries and ranks the United States 13th. North of the border in Canada (ranked third), there’s typically just one “procedure” — a paperwork filing, basically — needed to launch a business. In America, it takes more like six.

January 30, 2013

There’s a big, unstated reason for illegal immigration in the United States

Filed under: Bureaucracy, Government, Law, USA — Tags: , — Nicholas @ 10:07

The illegal immigration problem won’t improve until the American government addresses the difficulties of legal immigration:

Reason, October 2008 - What Part of Legal Immigration Don't You Understand?!?!?

Reason, October 2008 – What Part of Legal Immigration Don’t You Understand?!?!?

Click the image to see the larger version.

QotD: Confirmation-Bias Theatre Of The Absurd

Filed under: Bureaucracy, Cancon, Media, Quotations — Tags: , , — Nicholas @ 00:01

Unlike Andrew Coyne and Pierre Karl Péladeau, I am no expert on CRTC television policy. I couldn’t tell you the difference between a “must-carry” Class A license, a Class B carry-at-will, and a class X concealed-carry. But I do know a little about what makes for good journalism. And on that basis, I’d hate to see Sun News get taken off the air for want of revenue.

Sun’s enemies accuse the network’s hosts of being a bunch of haters. And it’s hard to deny the charge. Among the people they hate: Occupy protesters, fake hunger strikers and sanctimonious left-wing activists.

And Omar Khadr. Wow, do they hate Omar Khadr.

We know this because Sun News TV segments tend to go light on actual news, and heavy on middle-aged white guys shouting about people they don’t like. Sometimes, they sit around their Toronto studio interviewing each other. It’s a sort of performance art that might well be dubbed — by the surprisingly large number of left-wing Toronto hipsters who watch the channel ironically — as Confirmation-Bias Theatre Of The Absurd.

Jonathan Kay, “David Suzuki is poster boy for why Canada needs Sun’s brand of journalism”, National Post, 2013-01-29

January 29, 2013

NYC’s petty bureaucrats and the evolution of modern jazz

Filed under: Bureaucracy, Law, Media — Tags: , , , , , , — Nicholas @ 11:09

From the latest issue of Reason, Chris Kjorness outlines some of the pitfalls New York City thoughtfully put in the way of some of the greatest performers of Jazz:

For more than two decades musicians, comedians, and anyone else employed by a Gotham nightclub would be fingerprinted, photographed, and interviewed by police in exchange for a license to work. The card had to be renewed every two years, and it could be revoked at the whim of the police. The story of the cabaret card illustrates how small men with a little bit of power can inhibit creative expression, stifle artistic growth, and humiliate individual citizens, all in the name of the “public good.”

The cabaret card had its origins in the roaring ’20s. Prohibition made outlaws out of ordinary Americans, and the allure of booze, jazz, and debauchery brought the upper and lower classes together in clandestine after-hours spots. It was the height of the Harlem Renaissance, and white New Yorkers frequently made the trip uptown, looking for adventure and an escape from the tight moral constraints of downtown society.

[. . .]

More than just a barrier to work, the cabaret card for beboppers was an impediment to self-expression and artistic fulfillment. While originating in nightclubs, bebop represented something much more than bar music. The color line had not been broken in American symphony orchestras, so for a young black musician at a prestigious music conservatory — Miles Davis at Julliard, for example — sharing a cramped stage in a 52nd Street nightclub with someone like Charlie Parker was the highest realization of artistic ambition. But before he could do so, a musician would have to be judged not just by lauded masters and discerning aficionados but by the police.

Cops distrusted beboppers for three main reasons: The new breed of jazzmen were anti-establishment, they were confrontational in matters of race, and they had a fondness for heroin. The police had an unlikely ally in their crusade against the upstarts: older establishment jazz musicians who had their own reasons to dislike the beboppers.

In a 1951 Ebony article, Cab Calloway, a king of the 1930s jazz world, decried the widespread drug use in the current jazz scene. Though Calloway didn’t single anyone out by name, the magazine illustrated his essay with photos of bebop musicians, and the publication coincided with an upswing in police enforcement. One musician snared in this crackdown was Charlie Parker.

Next year’s calendars will be for the year “2013+1” to avoid paying the IOC a licensing fee

Filed under: Bureaucracy, Law, Media, Sports — Tags: , , — Nicholas @ 00:01

Just when you think the depths of idiocy have been fully plumbed, there’s the International Olympic Committee to prove you wrong:

Via the IPKat we learn that the IOC has already locked down next year in preparation for the Winter Olympics. No, seriously. A trademark on the number “2014,” which non-coincidentally happens to be a (lesser) Olympic year, has been granted by the UK’s Intellectual Property Office.

    The IPKat’s attention has been drawn to Community Trade Mark E3307444. The mark in question consists of the number “2014”, which no-one would ever imagine to be the appellation by which next year might just be known. Applied for in 2003 and registered in 2005, this mark is owned by none other than the Comité International Olympique of Château de Vidy, Lausanne.

So, with the kind of efficiency you only find in the most brutal of trademark bullies, the IOC has trademarked a number many people were planning to use starting next January, nine years in advance. And the IOC isn’t leaving anything to chance. It has staked a claim on all 45 of the possible registration classes, including (but good god, certainly not limited to) chemicals, pharmaceuticals, metals/alloys, machines, tools, scientific equipment, surgical instruments, lighting, heating, vehicles, firearms, musical instruments, furniture, ropes, tarps, string, textiles, toys, coffee, fresh fruits and vegetables, beer, other alcoholic beverages, tobacco, insurance, conferences and seminars, design and development of computer programs, restaurant services, asbestos and security.

Anything and everything possibly covered by a registered trademark has been nailed down by the Committee, making it very possible that anyone using the number “2014” in the year 2014 might find themselves dealing with the IOC’s trademark cops.

January 28, 2013

Let’s get real reform at the CRTC: eliminate “mandatory carriage” altogether

Filed under: Bureaucracy, Business, Cancon, Media — Tags: , , , — Nicholas @ 08:49

In the Toronto Star, Michael Geist calls for the CRTC to stop the “mandatory carriage” provision that forces cable providers to carry certain channels on their “basic” packages:

Canadians frustrated with ever-increasing cable and satellite bills received bad news last week with the announcement that the Canadian Radio-television and Telecommunications Commission will consider whether to require cable and satellite companies to include nearly two-dozen niche channels as part of their basic service packages. If approved, the new broadcast distribution rules would significantly increase monthly cable bills with consumers forced to pay for channels they may not want.

Two issues sit at the heart of the broadcast distribution rules. First, whether the CRTC should grant any broadcaster mandatory distribution across all cable and satellite providers such that all subscribers are required to pay for them as part of their basic packages. Second, in the absence of mandatory distribution, whether broadcast distributors should be required to at least offer the services so that consumers have the option of subscribing.

[. . .]

While the financial benefits for broadcasters are enormous, the policy represents a near-complete elimination of consumer choice for the channels at issue. Rather than convincing millions of Canadian consumers that their services are worth buying, the broadcasters need only convince a handful of CRTC commissioners that their service meets criteria such as making “an exceptional contribution to Canadian expression.” That is supposedly a high bar, yet it is surely far easier than convincing millions of people to pay for your service each month.

Last year, CRTC chair Jean Pierre Blais emphasized that the Commission’s top priority was to “put Canadians at the centre of their communications system.” The mandatory distribution rules do the opposite. Rather than focusing on consumer interests and choice, the rules place broadcasters at the centre of the communications system by offering up the prospect of millions in revenue without regard for what consumers actually want.

There are few, if any, broadcasters that can be considered so essential as to merit mandatory distribution. Niche cultural broadcasters have a myriad of distribution possibilities and should be forced to compete like any other content creator or distributor. In fact, even broadcasters that position themselves as “public services” can often be replicated by Internet-based alternatives.

I always find it interesting how cable providers usually manage to group their offerings so that you can’t get the group of channels you actually want in the same package. I doubt that this would change even if the regulator allowed the change from “must carry” to “must offer”, however: there’s too much potential profit to the cable companies in crafty packaging strategies. You’ll almost certainly not see the opportunity to pay for just the individual channels you want, as that would be too consumer friendly (and, we’re assured by cable company reps, would kill off lots of niche channels because they wouldn’t get enough subscribers).

Of course, if a TV channel can’t attract enough subscribers, that’s usually a pretty strong economic signal that they shouldn’t be broadcasting anyway.

January 24, 2013

The LCBO’s tentative, faltering steps to allowing wider sales of wine

Filed under: Bureaucracy, Cancon, Wine — Tags: , , , , , — Nicholas @ 09:39

In the latest Ontario Wine Review, Michael Pinkus pours scorn on the LCBO’s latest attempt to fend off an actual competitive market:

The LCBO is about money and profits — and about control. I know I will have people freaking out at me for saying this but I want you to ask yourself “why?” Why would the LCBO suddenly decide that grocery stores are the place to put locations? Doesn’t sound all that smart to me — and not what we asked for. We asked for the right to pick up booze and bread in the same place — the government has said fine but you’ll still have to visit two cashiers and wait in line. Heck, I could have gone across to the mall parking lot to the LCBO location, got a bigger selection than in that tiny kiosk they’ll most likely rent and I still would have had to stand in line at a different cashier — where’s the convenience?

Plus we already have Wine Rack and Wine Shoppe locations in grocery stores … and therein lies the rub (as Shakespeare would say). The LCBO already knows those stores are profitable, the “pilot project” is done, there’s no study needed, Vincor and Peller have already done the research (and if you don’t think the LCBO has had a look at those numbers you’ve got another surprise coming) — this is just another way for the LCBO to compete with those two companies — and by extension, the wineries of Ontario. [Ed. Note: just in case you don’t know Peller and Vincor hold the majority of private liquor store licenses in the province — something they acquired before 1988 when free trade came in].

“… and will also create new VQA boutiques for Ontario wines inside five of its own stores.” A novel idea? I don’t think so. They have one in St. Catharines already (of all places), and what do you want to bet the LCBO will place these new “boutiques” where they are most needed like Niagara, Prince Edward County and Windsor where wineries already exist — no better way to compete with your competition than on their own turf.

January 20, 2013

Pennsylvania quashes latest terror threat

Filed under: Bureaucracy, Education, Liberty, USA — Tags: , , , — Nicholas @ 11:59

This story is not taken from the pages of The Onion:

The incident occurred Jan. 10 while the girl was waiting in line for a school bus, said Robin Ficker, the Maryland lawyer retained by the girl’s family. He would not identify the girl or her parents, but gave this version of events:

Talking with a friend, the girl said something to the effect “I’m going to shoot you and I will shoot myself” in reference to the device that shoots out bubbles. The girl did not have the bubble gun with her and has never shot a real gun in her life, Ficker said.

Elementary school officials learned of the conversation and questioned the girls the next day, Fickler said. He said the girl did not have a parent present during the 30 minutes of questioning.

The result, he said, was that the student was labeled a “terrorist threat” and suspended for 10 days, Ficker said. The school also required her to be evaluated by a psychologist, Ficker said.

This designated terrorist is five.

H/T to Dan Mitchell for the link.

We also need to protect our kids from being exposed to bureaucrats who are jaw-droppingly stupid.

Actually, WordPress is telling me that “droppingly” isn’t a word. So maybe instead we should take Instapundit’s advice and reward these idiot officials with some tar and feathers.

And I hope the tattle-tale punk from the bus stop who ratted out the little girls is condemned to some sort of grade-school purgatory featuring never-ending wedgies.

On a more serious note, I hope the parents sue the you-know-what out of the school.

January 18, 2013

Camouflage patterns and the patterns of inter-service rivalry

Filed under: Bureaucracy, Military, USA — Tags: , , , , , — Nicholas @ 00:01

In The Atlantic, D.B. Grady reminds us that some patterns are more deeply dyed than others:

Military combat uniforms have two purposes: to camouflage soldiers, and to hold together in rugged conditions. It stands to reason that there’s only one “best” pattern, and one best stitching and manufacture. It should follow that when such a uniform is developed, the entire military should transition to it.

MARPAT woodland patternIn 2002, the Marine Corps adopted a digital camouflage pattern called MARPAT. Rigorous field-testing proved that it was more effective than the splotched woodland pattern in use at the time, and the Combat Utility Uniform (of which it was a part) was a striking change for such a conservative institution.

UCP patternNot to be outdone, the Army drew up digital plans of its own, and in 2005 issued a redesigned combat uniform in a “universal camouflage pattern” (UCP). Three years after the Marines made the change, four years after the invasion of Afghanistan, and two years after the invasion of Iraq, you might think the Army would have been loaded with data on how best to camouflage soldiers in known combat zones. You would be wrong.

In fact, not only did the Army dismiss the requirements of the operating environments, but it also literally chose the poorest performing pattern of its field tests. The “universal” in UCP refers to jungle, desert, and urban environments. In designing a uniform for wear in every environment, it designed a uniform that was effective in none.

[. . .]

Such dysfunction is not unique to the Army. MARPAT was a success not only in function, but also in adding distinction to the Marines wearing it. Naturally the Air Force wanted in on that action, and set about to make its own mark on the camouflage world. It’s first choice? A Vietnam-era blue tiger-stripe pattern. (You know, to blend in with the trees on Pandora.)

After an outcry in the ranks, the leadership settled on a color scheme slightly more subdued. The new uniform did, however, have the benefit of being “winter weight” only, which was just perfect for service in Iraq.

January 16, 2013

When Kafka met Sandy

Filed under: Bureaucracy, Government, USA — Tags: , , , , , — Nicholas @ 09:53

In the Wall Street Journal, Roger Kimball talks about the experience of trying to put your life back together after a major storm damages your home:

Like many people whose houses were badly damaged by Hurricane Sandy, my family and I have been living in a rented house since the storm. Unlike some whose houses were totalled, we could have repaired things and been home toasting our tootsies by our own fireplace by now. What happened?

Two things: zoning (as in “Twilight Zone”) and FEMA.

Our first exposure to the town zoning authorities came a couple of weeks after Sandy. We’d met with insurance adjusters, contractors and “remediation experts.” We’d had about a foot of Long Island Sound sloshing around the ground floor of our house in Connecticut, and everyone had the same advice: Rip up the floors and subfloors, and tear out anything — wiring, plumbing, insulation, drywall, kitchen cabinets, bookcases — touched by salt water. All of it had to go, and pronto, too, lest mold set in.

Yet it wasn’t until the workmen we hired had ripped apart most of the first floor that the phrase “building permit” first wafted past us. Turns out we needed one. “What, to repair our own house we need a building permit?”

Of course.

Before you could get a building permit, however, you had to be approved by the Zoning Authority. And Zoning — citing FEMA regulations — would force you to bring the house “up to code,” which in many cases meant elevating the house by several feet. Now, elevating your house is very expensive and time consuming — not because of the actual raising, which takes just a day or two, but because of the required permits.

Kafka would have liked the zoning folks. There also is a limit on how high in the sky your house can be. That calculation seems to be a state secret, but it can easily happen that raising your house violates the height requirement. Which means that you can’t raise the house that you must raise if you want to repair it. Got that?

“A paradox, a paradox, a most ingenious paradox. Ha, ha, ha, ha, ha, ha, ha, ha, this paradox.”

H/T to Monty for the link. Monty also has this meditation on bureaucracy:

This is where Leviathan does the most damage, I think. Tyranny is always a danger in centralized governments, but a greater danger is the proliferation and growth of bureaucracies. The rules become ever more Byzantine, ever more contradictory, ever more pointless, and ever more expensive (both to implement and comply with). The bureaucracies themselves achieve a life outside the body politic: they persist, age after age, irrespective of their political origin. Their sole imperative (regardless of their ostensible purpose) is to perpetuate themselves. They are an amoeba, growing to engulf everything they touch — not because they are evil, necessarily, but simply because it’s in their nature to do so. They cannot help themselves. Bureaucracies — lethargic, slow, risk-averse, rules-bound, pedantic, expensive, often causing more harm than good — are perhaps the very worst creation of human society.

The 9 iron-clad rules of business

Filed under: Bureaucracy, Business — Tags: , — Nicholas @ 00:01

Rosabeth Moss Kanter has the nine rules many businesses follow:

  1. Be suspicious of any new idea from below — because it’s new, and because it’s from below. After all, if the idea were any good, we at the top would have thought of it already.
  2. Invoke history. If a new idea comes up for discussion, find a precedent in a an earlier idea that didn’t work, remind everyone of that bad past experience. Those who have been around a long time know that we tried it before, so it won’t work this time either.
  3. Keep people really busy. If people seem to have free time, load them with more work.
  4. In the name of excellence, encourage cut-throat competition. Get groups to critique and challenge each other’s proposals, preferably in public forums, and then declare winters and losers.
  5. Stress predictability above all. Count everything that can be counted, and do it as often as possible. Sweep any surplus into master accounts, and eliminate any slack. Favor exact plans and guarantees of success. Don’t credit people with exceeding their targets because that would just undermine planning. Insist that all procedures be followed.
  6. Confine discussion of strategies and plans to a small circle of trusted advisors. Then announce big decisions in full-blown form. This ensures that no one will start anything new because they never know what new orders will be coming down from the top.
  7. Act as though punishing failure motivates success. Practice public humiliation, making object lessons out of those who fail to meet expectations. Everyone will know that risk-taking is bad.
  8. Blame problems on the incompetent people below — their weak skills and poor work ethic. Complain frequently about the low quality of the talent pool today. If that doesn’t undermine self-confidence, it will undermine faith in anyone else’s ideas.
  9. Above all, never forget that we got to the top because we already know everything there is to know about this business.

Yep, several of the companies I’ve worked for followed most or all of these rules … to suppress creativity and innovation. Worked a treat, too.

January 11, 2013

Public choice theory is neither Left nor Right

Filed under: Bureaucracy, Economics, Government — Tags: , , , , — Nicholas @ 00:01

In his obituary for the late James Buchanan, Radley Balko debunks the meme that public choice theory — of which Buchanan was one of the founding fathers — is by nature anti-left:

The discrepancy struck me at the time, and has stuck with me ever since. Buchanan’s work is often seen on the right as a critique of the left’s faith in public service. He showed that like everyone else, public servants tend to serve their own interests, not necessarily the interests of the greater public good. When a new federal agency is created to address some social ill, for example, there’s a strong incentive for the employees of that agency to never completely solve the problem they’ve been hired to solve. To do so would mean there would no longer be a need for their agency. It would mean layoffs, smaller budgets, even elimination entirely. In fact, there’s a strong incentive to exaggerate the problem, if not even exacerbate it. The agency itself is never going to get blamed for the problem. So exaggerating it helps the agency argue for more staff and a larger budget. (Thus, Milton Friedman’s axiom, “Nothing is so permanent as a temporary government program.”)

It doesn’t even need to be a deliberate thing. When your livelihood, your self-worth, and your career depend on things looking a certain way, there’s always going to be a strong incentive for you to see them that way.

Conservatives have always bought into public choice theory when it comes to paper-pushing bureaucrats. But when it come to law enforcement, they often have the same sort of blind faith in the good intentions and public-mindedness of public servants that the left has for, say, EPA bureaucrats. But public choice problems are as prevalent in law enforcement as they are in any other field of government work. And you could make a strong argument that it’s more important that we recognize and compensate for the incentive problems among cops and prosecutors because the consequences of bad decisions can be quite a bit more dire.

If we reward prosecutors who rack up convictions with reelection, higher office, and high-paying jobs at white-shoe law firms, and at the same time provide no real sanction or punishment when they break the rules in pursuit of those convictions, we shouldn’t be surprised if we start to see a significant number of wrongful convictions. If we reward cops who rack up impressive raw arrest numbers with promotions and pay raises, and at the same time don’t punish or sanction cops who violate the civil and constitutional rights of the people who live in the communities they serve, we shouldn’t be surprised if we start to see a significant number of cops more interested in detaining and arresting people than in protecting the rights of the citizens they encounter on their patrols. We can certainly hope that a sense of civic virtue and veneration for justice will override those misplace incentives, but it would be foolish — and has been foolish — for us to rely on that. Incentives do matter.

Any time I link to an article, it’s assumed that I suggest you read the whole thing. In this case, it’s a very strong recommendation that you read the whole thing.

January 10, 2013

Recapping the awful legal conditions for Ontario wineries

Filed under: Bureaucracy, Business, Cancon, Law, Wine — Tags: , , — Nicholas @ 09:44

In the latest issue of Ontario Wine Review, Michael Pinkus explains why the outcome of the last provincial election dashed a lot of hopes in the Ontario wine industry:

Give an Ontario winery the chance to vent its spleen, especially about the recent provincial election and the future of the wine industry in the province, and you can sit back, pour a glass and listen to what has been described as “years of frustration”. Ontario remains one of the most backward places to make and sell wine and the rules and regulations are just so 1920s (the decade our monopoly was formed). One of the most telling problems about our system is how many winery principals are afraid to go on the record with their comments. “I will ask to remain anonymous as quite frankly I am afraid of LCBO backlash. We are spending more and more time getting to know the LCBO system [as one of the only ways to grow our business] … and I am sure with one phone call the buyers will drop us … without the LCBO we are screwed.” Now, you would think we were discussing selling forbidden information in communist Russia or talking against the state in Stasi-controlled Cold War Germany, instead of discussing election results in a “free” country like Canada. [. . .]

“We are definitely one of the worst regulated wine industries in the world. No other jurisdiction has supply-managed grapes and government-owned monopoly distribution (a system designed to fast-track imported wine into Ontario). In fact, I am hard pressed to think of any other industry in Canada that has this type of anachronistic regulatory burden. Off the top of my mind, a list of products more dangerous than 100% grown Ontario wine that are less regulated: hunting rifles, cigarettes, pseudoephedrine, ATVs, fast food, pointy sticks, etc.” (AWP)

So what can you as a consumer do about this situation? First of all, you can of course become more informed, look into why you can’t order wines from other provinces, question, and why you can’t buy local wines at wine shows or farmers’ markets. Find out why wineries are limited to where they can sell their wines and why only a handful of wineries are making money hand-over-fist because of the ability to blend foreign wine with domestic wine (yet over 98% of wineries cannot use that practice) and why those same wineries can sell wine in off-site stores, while smaller un-grandfathered post-1993 wineries struggle to sell wines in one of three places: their cellar door, restaurants and the restrictive LCBO. Many wineries won’t go on the record against the biggest wine buyer in Ontario (so much for free speech).

[. . .]

Problem One are direct sales to restaurants and other licensee holders (banquet halls, etc). One AWP says OMAFRA (Ontario Ministry of Agriculture, Food and Rural Affairs) puts ridiculous regulations in place. “If I sell a bottle of wine at the winery for $10.00 (including all taxes etc), I get to keep $7.55 of that. If I deliver that wine to a restaurant, I get to keep $4.03, rather than $7.55. Although LCBO has not touched that bottle, I have to pay the equivalent of LCBO warehousing charges. This overhead is not warranted as cost recovery by LCBO, as its only responsibility is the audit of winery reports.”

Remember the LCBO had nothing to do with the sale, yet it makes money on it.

Problem Two is that market share is actually declining. According to numbers obtained by the Winery and Grower Alliance of Ontario (WGAO), Ontario’s market share of wine, in its own market place, is actually declining — although an agreement made years ago stated that the LCBO would work towards a 50% target for Ontario market share compared with imported wine. The numbers show a different story. In 2010/2011, imports had 61% of the market, while Ontario had only 39%, of which 29% were International-Canadian blends (the old Cellared in Canada) … leaving Ontario VQA wine (100% Ontario product) with a measly 10% (WGAO newsletter — August 2011) … Ontario is losing ground in its own market — and that’s not because of low quality wines, that’s because access to market is curbed. Says one winery principal on the subject: “The present situation is choking the wine industry in Ontario” while another says, “it is very apparent that the LCBO is unable or not interested in growing the VQA wine industry.”

« Newer Posts — Older Posts »

Powered by WordPress