A provincial government announcement meant to help craft breweries during these tough economic times is being met with trepidation.
Breweries around the province were hoping for a little more give when it comes to the Newfoundland and Labrador’s commission and subsequent fees.
“We do not expect to see much of an affect,” said Christopher Johnson, who co-owns Rough Waters Brewing Company in Deer Lake with Jennifer O’Keefe, of the provisions included in the announcement. “We’d hoped to see a more impactful change as the commission is one of our biggest expenses.”
In the announcement, the province agreed to increase in product commission discounts for craft breweries, wineries, distilleries and cideries producing 1,000 hectolitres or less to 55 per cent for non-Newfoundland and Labrador Liquor Commission-distributed products.
That is up five per cent from the 50 per cent discount approved in November 2018.
In Newfoundland and Labrador, that means the NLC charges $1.27 per litre of beer under the previous 50 per cent discount The Canadian average is $.35 a litre.
“That isn’t much when it comes down to it,” said Tim Vatcher, who is a partner and manager of Split Rock Brewing Company in Twillingate. “One thing we’re hammering is that Newfoundland pays between 600 and 800 per cent more taxes than the rest of the Maritimes when it comes to commission.”
There were things included that may able to help breweries a little until the economy recovers.
That includes the NLC agreeing to waive its $500 liqour licensing fees for 2020-2021 and the temporary waiving of warehouse fees.
The waiving of warehouse fees would allow breweries to ship their product to a single location in St. John’s and the NLC would then distribute it to its corporate stores across the province.
“That would help us get our canned product out quicker and across the whole province,” said Vatcher. “We could just drop it off to their warehouse and they would distribute it for you instead of us having to make trips, one into St. Johns, one to the west coast or wherever.
“We would drop all the beer off to them and they would distribute as they see fit which would save us time and money in that aspect.”
The provisions from the government as they pertain to craft breweries around the province also included the opening of Rock Sprits, the NLC’s manufacturing facility, to local breweries to help with canning product, as well as giving breweries the option of home delivery.
“We are looking forward to using this as another avenue to help sell our product,” said Johson. “We are located in a rural area of Newfoundland and Labrador. Home delivery can be very helpful to those living in more urban centers across the province.
“While we hope to be able to provide this to our customers we do not expect it will dramatically increase our profits during this time.”
Its been the goal of the Newfoundland and Labrador Craft Brewers Association to work with the provincial government to bring regulations around the industry in line with the rest of the country.
The feeling is that by not lowering the commission more it is a missed opportunity.
“This is a time where people’s health and safety is the No. 1 concern, so we appreciate that work is being done to support small businesses in the province. However, it does not feel like much of anything was accomplished,” said Johnson. “During this pandemic, we have not been able to avail of any federal programs to help our business weather the storm. A commission rate in line with the rest of Canada would have been the first opportunity for our business to receive help during this pandemic.
“We want to have a chance to grow our business, increase community building and provide meaningful employment to the people in our area.”
Nicholas Mercer is a Local Journalism Initiative reporter covering Central Newfoundland for Saltwire Network.
