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BC liquor distributer hires relocation expert linked to Exel

A Cleveland, Ohio, consultancy connected to a company that wanted to privatize the B.C. Liquor Distribution Branch last year has been hired to help the government find new liquor warehousing headquarters.

Sedlak Management Consultants Inc. was named the successful bidder over 17 other companies, according to a list released Sept. 13 by the branch. The request for proposals said the one-year contract would include LDB options for up to four six-month extensions.

Sedlak's website said it has worked "for many years on several different projects" with Exel, an Ohio-based third-party logistics unit of German giant Deutsche Post DHL. Sedlak's long list of historical clients includes the Alberta Gaming and Liquor Commission, whose liquor distribution and warehousing division is operated by Exel-owned Connect Logistics.

Exel was one of four companies shortlisted to privatize the LDB's warehousing and distribution in July 2012. Tendering was abruptly halted on Sept. 27, 2012, the week before final proposals were due, when the B.C. Government and Services Employees' Union reached a new two-year contract with the government that included a no-privatization clause.

Exel had lobbied behind the scenes for seven years to privatize the LDB system and even employed BC Liberal-connected lobbyists Patrick Kinsella and Mark Jiles to sell its concept. Only after Christy Clark succeeded Gordon Campbell as premier did the government act on Exel's wishes. Instead of making a private/public partnership, the government put the contract to tender.

The NDP attacked the 2012 privatization attempt because the government had no business case and did not consult the public or industry. Additionally, a 2009 Exel internal memo, titled "Project Last Spike," indicated the company was hoping to use its connections to then-liquor minister Rich Coleman to influence the writing of the request for proposals in its favour.

The 17 unsuccessful bidders for the relocation consulting contract included Metro Supply Chain Group, a Toronto company that was shortlisted with Exel last year, Sierra Systems, IBM Canada, Stantec, KPMG, Deloitte and PricewaterhouseCoopers.

LDB published the request for proposals on May 24, 10 days after the BC Liberals won surprise re-election, to find a replacement for its 3150 East Broadway main distribution centre. LDB originally wanted to hire a consultant by July 26, but extended the deadline because it said it received a "larger than expected number of responses" and had expected to conclude the process in mid-to-late August.

The Vancouver Distribution Centre, on land assessed at $29.77 million, also includes the LDB head office, the company's flagship retail outlet, security control centre, data centre, test laboratory, support and training facilities, cafeteria, fitness centre and daycare.

"The right facility in the best available location will allow distribution to make improvements in its business operation," said the RFP. "In order to take full advantage of a new, more appropriate facility for the volume of business flowing through the Distribution Centre, the BCLDB may need to procure new technology solutions for Warehouse Management, Transportation and Logistics and Supply Chain."

Richmond's ContainerWorld is the province's biggest purpose-built liquor warehouse and was also one of the bidders in 2012.

ContainerWorld, which has an exclusive relationship with Italy-based, Deutsche Post DHL-owned liquor distributor Gori, has a pre-distribution contract with LDB. ContainerWorld sister company Commercial Logistics is one of the province's biggest private liquor haulers.

Vancouver journalist Bob Mackin is a frequent contributor to The Tyee.

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