4. NS Craft Brewers buy brand new 341ml bottles for Oland’s (a subsidiary of AnheuserBuschInBev, a behemoth beverage company headquartered in Belgium and Brazil) every week so that Oland’s doesn’t have to replace their broken bottles. That’s right. We buy them bottles! $500,000 worth per year! In NS, the craft beer industry does not have access to the recycled pool of reusable bottles. NS Resource and Recovery send ALL of the 341ml beer bottles they collect and sort to you guessed it Oland’s. Oland’s pays them a tidy sum of $0.04 per bottle under this nifty system. When NS Craft Brewers need bottles, they pay $0.31 per bottle to buy them new, and get to use them precisely once before they are recycled and bought back by Oland’s at a huge discount. What’s more, NS Craft Beer larger format bottles (such as 500ml and 650ml bombers) aren’t considered reusable by NS Resource Recovery, so they are crushed and often buried in landfill after a single use. Despite years of negotiation with Beer Canada in earnest, this system has not changed. Come on NS Government, help us negotiate back our fair portion of the recycled bottle pool from Resource Recovery. Stop crushing expensive glass and let us reuse it! 5. Last year, NS Craft Brewers self-distributed (i.e. sold beer directly to clients, not through the NSLC) enough beer in this province that it contributed $950,000 in tax revenue to the provincial coffers. (We pay $0.50 per litre to the NSLC on beer we distribute ourselves. Yup, you read that right.) NS Wine makers contributed $150,000 under the same self-distributed remit requirement. The NSLC returns $50k of this remit back to each of the Craft Brewers’ Association of NS and the Winemakers Association of NS to help with funding development in each industry. This seems disproportionate - we create more than 6 times the tax revenue on self-distributed product for the same amount of funding help! What’s more, the NS Wine industry received $3.5 million in the last provincial budget to help fund a PR Campaign. The NS Craft Brewers were given $0.00 in the same budget. Why are you unfairly helping one industry more than another? 6. The NSLC’s remit rate paid by NS Wineries and NS Craft distillers is 5% of wholesale price, while NS Craft Brewers pay $0.50 per litre. This means NS Craft Brewers are currently paying approximately 100% more production related taxes than NS Wine and Craft Distillers. Why the difference? The Craft Brewers’ Association of NS held government’s hand for 2 years, negotiating a reduction in good faith, paying independent consultants to demonstrate that a reduction to the remit NS Craft Brewers pay would positively impact the growth of the industry, while causing only a minimal short term reduction to treasury revenue ($400k over 18 months)! Immediately prior to the last provincial budget, NS Craft Brewers even felt we received assurances that this inequality in remit rates was going to be corrected. We were shocked when it was completely left out of said budget. Why does it take government so long to give us what it has already given other similar industries? I can only think that the lobby against us getting a reduction (which can only logically come from large international beer companies) is so intense, that government has succumbed to its pressure. That would seem to indicate a preference to help large multinational beverage companies over the companies the provincial government has vowed to support right here in Nova Scotia. 7. Whether or not the NSLC was ever correctly and legally nominated by the Government of Nova Scotia as the entity empowered to collect beer tax revenue (our remits) on brewery distributed beer in NS is now being legally challenged by one NS Craft Brewery (Unfiltered Brewing). The merits of the Unfiltered law suit await further progress in the Supreme Court of Nova Scotia, but the fact that the case exists, and has been permitted to go forward by the Attorney General, suggests that very foundation on which remit- tances are structured and paid in NS on craft beer we distribute ourselves are tenuous at best. 8. The fact that the NSLC is currently both the principal NS beer retailer AND the NS Craft Beer regulator puts them often in a position of conflict of interest. For many of us, the NSLC stores are our biggest customer, yet they also have the power to make policy that directly impacts our businesses. This unnecessarily complicates our relationships with the NSLC. The government says they want to transition the regulation of NS Craft Beer to the ministry of Alcohol, Gaming, Firearms and Tobacco, but has taken two years to think about it and do nothing. Hurry up, would you! 9. My next beef further shows NSLC’s complete lack of commitment to fairness and consistency in the NS craft beer industry. In Nova Scotia, there exist private wine, spirit and beer stores (PWSS). For years, NS Craft Beer Companies have been directly supplying PWSS with beer at wholesale prices, so the PWSS could then sell it on to consumers at a profit (but never at a lower price than the NSLC sells it at their stores). It turns out no clear written policy regarding the payment by breweries of the $0.50 per litre remit exists on beer sold to PWSS. (Full disclosure: Big Spruce does not sell beer to the PWSS or the NSLC.) As a result of NSLC’s lack of policy, NS Craft Breweries that were started before about 2008 have never paid the $0.50 per litre remit on beer they sold to the PWSS. This nonpayment totals hundreds of thousands of dollars of savings for some of these breweries. By contrast, for breweries started after about 2008, the NSLC insisted on payment of the $0.50 per litre remit on this beer (despite still NOT insisting older craft breweries start paying it). This obviously resulted in various NS Craft Breweries having an unfair pricing advantage over others.
The NSLC has realized the error. As brewers we’ve spoken to them about it, and yet they have done nothing to formally correct the
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SPOTLIGHT ON BUSINESS MAGAZINE • AUGUST 2017
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