In a surprise Friday announcement, the B.C. government put a cork in the controversial move to privatize liquor warehousing and distribution.
Premier Christy Clark announced that the B.C. Government and Service Employees' Union reached a tentative contract that calls for a 4% pay raise through December 2013.
The new deal included an immediate halt to the Distribution of Liquor Project. Six companies responded to the April 30 request for proposals.
ContainerWorld, Exel, Kuehne + Nagel and Metro were shortlisted July 20. A joint LDB/Citizens' Services committee was to recommend a winning bidder for approval by the Treasury Board on or about Oct. 16.
"It really seemed to be something that cropped up at the 11th hour," BCGEU president Darryl Walker told BIV. "Everything was so quiet that it was simply going forward in whatever way they decided, there was nobody talking about it. When we started getting some hints there might be movement there, it surprised us."
Walker argued that the LDB, which recorded a $911.1 million profit on $2.89 billion sales in 2011-2012, was too valuable to let go.
In fall 2003, the BCGEU also successfully prevented the government from selling off the entire LDB retail chain during a previous government privatization push.
NDP liquor critic Maurine Karagianis suspected the BC Liberals used the BCGEU contract as a convenient exit strategy to rescue their falling popularity under Clark.
No business plan was published and neither was the industry consulted about privatization.
"They have heard very clearly that it was a bad deal for British Columbians, a bad deal for industry, a bad deal for consumers and they needed a way to get out of it," Karagianis said.
Exel, a unit of Deutsche Post DHL, hired BC Liberal-connected lobbyists Mark Jiles and Patrick Kinsella in 2005 to seek the job.
In its May 8 edition, BIV revealed contents of an October 6, 2009, internal memo titled Project Last Spike.
In that memo, Exel vice-president Scott Lyons speculated that the company could use its relationship with liquor minister Rich Coleman to influence the writing of the RFP.
Exel's memo also pondered a buyout of the 495,000 square foot ContainerWorld warehouse in Richmond as a contingency plan.
Lyons did not respond to an interview request, but Jiles said via email: "I'm happy the government and the BCGEU were able to sign an agreement. Our goal from the start was always to work with the BCGEU and protect their jobs and this deal does this."
In summer 2011, then-liquor minister Shirley Bond first rejected Lyons' proposal but finally relented and met with him on August 25, 2011, at the premier's Vancouver office on the eve of the defeat of the HST.
Exel was hoping for a 10-year contract and estimated it to be worth more than $55 million a year, according to the internal memo.
Coleman was reappointed liquor minister on February 8, 13 days before the privatization was announced in the budget.
ContainerWorld, the only B.C. company on the short list, already acts as a pre-distribution warehouse for LDB.
The pre-distribution program was to be phased out under a private monopoly.
ContainerWorld president Dennis Chrismas was not available for an interview, but a statement was issued via public relations company Pace Group.
"We believe the evaluation process was certainly thorough and detailed, and was a valuable exercise for us," said the statement.
"The province's decision to remain with the current distribution system has always been one of the options.
"Now that the final decision has been made, ContainerWorld and our 275 employees look forward to continuing to work with the province in the months and years ahead."
The Exel internal memo said Deutsche Post DHL-owned Giorgio Gori had a business relationship with ContainerWorld and an option to buy the company.
Chrismas hired lobbyist Mike Bailey in summer 2011 to initially oppose privatization.
On March 2, Chrismas and Bailey met with Coleman.
The deadline for bids was June 29 prior to 4 p.m. Five of the six companies filed on time.
Kuehne + Nagel's bid was received a minute late, but the company remained eligible because of a loophole in the statement of disclosure that prevented the government from disqualifying bidders that break RFP rules.
