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NLC working through fallout of AG report

Auditor general Julia Mullaley. TELEGRAM FILE PHOTO
Auditor general Julia Mullaley. TELEGRAM FILE PHOTO

ST. JOHN'S, N.L. —

David Maher

The Telegram

The Newfoundland and Labrador Liquor Corp. (NLC) says it’s already working to address issues raised in a scathing auditor general’s report released this week.

On Thursday, auditor general Julia Mullaley released an audit of the NLC, with regard to the Bordeaux Futures program headed by former CEO Steve Winter.

The report found “possible nepotism” after it found Winter had purchased $4.5 million in fine wines from Bordeaux from his son Greg Winter’s company, Dialog Wine. Such companies purchase wines from vineyards and propose sales to suppliers. The total purchases in the program from 2010 to 2019 was $15.6 million in fine wine.

Winter has denied any wrongdoing in the matter. He is currently suing the provincial government for wrongful dismissal.

The NLC was initially expected to hold a news conference, but decided against it given the ongoing legal matters related to Winter’s departure from the Crown corporation.

Among the issues unveiled by the report were out-of-province sales of wines in the program.

“A particular NLC branch manager knowingly continued to sell and ship, or arrange the shipping of, specialty wines at discount prices and/or with price overrides, directly to end customers in other provinces without going through the respective liquor authority of those provinces,” reads the report.

As a result, the auditor general’s office informed the Royal Newfoundland Constabulary of the matter, which is being reviewed, and the branch manager was subsequently fired.

“On the issue of improper cross-provincial sales, we have put in place a new reporting mechanism that will flag unusual purchases, as well as additional controls to prevent such actions in the future. The NLC will work with its board of directors and the provincial government on whether any further mitigating factors are required,” reads the statement.

“We are committed to responsible stewardship of public funds, as well as fulfilling the NLC’s mission of generating revenue for government through responsible beverage alcohol and cannabis sales, which will be reinvested for the benefit of the people of Newfoundland and Labrador.”

Finance Minister Tom Osborne told reporters on Thursday that he asked the Department of Justice for its opinion on any legal exposure for the province and NLC in relation to the inter-provincial sale of wines.

Aged like fine wine

It’s not the first time the auditor general has found misuse of alcohol as a cause for concern.

While the circumstances are not the same, in 2007 then-auditor general John Noseworthy found seven board members and executive members of the NLC were given gifts of liquor and alcohol worth $11,500 – including eight $160 bottles of Dom Perignon champagne. During the investigation, Noseworthy was told the liquor was for tasting purposes.

"Given that a lot of the premium brands outlined above are already stocked by the corporation, there is no requirement that they be taste-tested," Noseworthy stated in the 2007 report.

"We were informed that board members are not directly involved in the identification of products to be listed by the corporation. It is most likely, therefore, that the products were provided directly to the board members."

david.maher@thetelegram.com

@DavidMaherNL

With files from Barb Sweet

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