2021-06-02

Letter from NSLC stirred concern and complaints among craft brewers

Local Journalism Initiative Reporter

When craft beer producers received a letter from the Nova Scotia Liquor Corporation (NSLC) earlier this spring, the move left a bitter taste in the mouths of more than a few.

Many of the beer producers who received the letter perceived that their products were being "de-listed" from NSLC shelves. De-listing is an annual procedure NSLC undertakes, assessing each of the products on its shelves against a formula based on sales, sales history, comparison with other local counterparts, and trends.

Mark Baille, the owner of Liverpool's Hell Bay Brewing Company, was one such producer who was concerned.

"We got the notice, as well as many of the small breweries did, that we were on the bubble to be de-listed," he said.

However, Beverly Ware, a spokeswoman for the NSLC, suggested the issue was more one of confusion.

"The letter was not a notice to de-list their products. This correspondence was designed to let producers know that their products are currently under-performing and may require additional support to raise awareness with our customers," she explained in an email, adding there would be no de-listing until 2022.

The craft brewing industry is carrying more and more weight on NSLC shelves. The Crown corporation retails products from 33 different Nova Scotia craft beer producers, up from 18 just three years ago. There are an estimated 66 craft brewers in the province. According to Brian Titus, president of the Craft Brewers Association of Nova Scotia, craft beer is the only part of beer sales that is growing right now.

NSLC's third-quarter results (September 28 - December 27, 2020) released in February shows that craft beer experienced sales growth of 20.8 per cent to $6 million. In total, NSLC earned $187.8 million in alcohol sales for this third quarter.

For the fiscal year 2019-2020, total sales of all NSLC products amounted to $726 million, up 9.7 per cent from the previous year. Craft beer sales were up 21.5 per cent to $20.1 million. This year's final figures are expected to be released soon.

Hell Bay currently has four products listed with the NSLC. Baille lamented the fact that the larger producers take the bulk of the NSLC's shelf space, leaving limited retail space to the remaining 50 or so smaller breweries, of which Hell Bay is one.

While Baille didn't argue with the notion that the NSLC is run like a business, he maintained that since it's a Crown corporation it's mandated to give all of the producers a fair chance, and it's not doing this. "It's just greed. To give us small breweries a fair shake would not hurt them at all," he said.

Baille complained that the NSLC has a monopoly on beer sales. It makes the rules and regulations for the retailing of alcohol and enforces them. "They can do whatever they want, whenever they want, and we can't do anything about it."

Titus, who is also the founder of Garrison Brewery in Halifax, commented that the controversial letter did not ensure there would be no de-listing this year.

"The unfortunate thing here is that the timing is so bad," said Titus. He pointed out that the pandemic has gone on well over a year, with businesses collectively shut down for almost half of that time.

"You're seeing a lot of producers feeling the pain, and I don't think anyone thought we were going to go into a third lockdown. They have been in a state of uncertainty for months on end, and they get this letter from, essentially, the only game in town."

While Titus conceded that the NSLC has only a certain number of stores and it can allow only a certain amount of shelf space, he noted that the same system existed 24 years ago when he started Garrison Brewing and there were only a few brewers; today there are significantly more.

The PC Party of Nova Scotia issued a news release on May 14 stating that it was standing behind the Nova Scotia Craft Brewers Association in calling for the NSLC to not do any de-listing until at least the end of the year.

"Why the liquor commission would be floating letters and raising concern and anxiety during what's an already highly anxiety-ridden period for the last 14 months, it just seems irresponsible in my mind. Totally insensitive," said Murray Ryan, PC MLA for Northside-Westmount and critic for the NSLC.

According to Ware, the NSLC officials are fully aware of the situation that befalls the producers and they've been engaging with local industry associations and producers to help them find ways to support them through advertising and business consultations.

Andrew Tanner, one of the founders of Saltbox Brewing Co., which is based in Mahone Bay, said overall his company has a good relationship with the NSLC. However, he too pointed to limited shelf space as being a problem.

"I don't think they're moving fast enough to correct that shelf space issue," he said. "Local beer is selling faster than the big brands of the world in the NSLC, so that should give them enough data to find more shelf space for local producers," he said.

According to Titus, there are solutions to be had. He acknowledged that there are small and large producers, but said they shouldn't all be lumped into one basket, and rather should be handled separately.

He also points to the possibility of adopting a similar strategy to that employed in New Brunswick, where there are about the same amount of small breweries and they are allowed to sell each other's products.

"We have a growing wine, cider, spirit and craft beer industry and there is no way that all of these products can funnel through the same pipeline of the NSLC," he said. "This is a great way they can sell each other's goods and they're all promoting local."