Craft beer makers worried as NB Liquor plans to drop domestic prices

NB Liquor's plans to permanently drop beer prices for several of its domestic 24-packs has few worried about border-hopping and many worried about the future of craft brewing.

Kevin Lacey of the Canadian Taxpayers Federation said "it's about time" the prices dropped, but wishes it was extended to other selections.

"NewBrunswickershave been paying too much for beer for too long and this is a welcome change," Lacey said.

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"But it shouldn't only be on 24-packs. It should be across all the types of beer that are in the store."

The prices of Alpine, Budweiser, Bud Light, Coors Light, Molson Canadian, Moose Light and Sleeman Clear will decrease to $35.99from $43as of June 26.

This break is welcome, it is good for all taxpayers, but it should be good for all producers as well.- Kevin Lacey, Canadian Taxpayers Federation

Mark Barbour, spokesman for NB Liquor (ANBL)said in a statement that New Brunswickers have been asking for relevant pricing in the beer category.

"Lessons learned from last year's promotions reveal that this pack size and price point is one which our shoppers will see value in buying," Barbour wrote.

"ANBL was able to budget for this new offer and invest $7 million to make this new beer pricing beer part of a sustainable plan."

Beer wars

New Brunswickers making beer runs to Quebec became a heated issue last year after a provincial court judge acquitted a Tracadie man on charges of bringing 14 cases of beer and three bottles of liquor back from Quebec.

Many have raised the same question about competitive beer prices causing riffs between New Brunswick and neighbouring provinces this time around.

The Nova Scotia Liquor Corporation (NSLC)lists its respective 24-packs at $43.98, while Prince Edward Island's go for $47.60. Quebec leads the price game, making consumers pay no more than $30 for a flat of beer.

NSLC would not comment on NB Liquor's price drops. However, senior manager of communications Jennifer Gray said border-hopping for cheap liquor "is real and it happens, regardless of beer promotion."

Lacey said Nova Scotian beer drinkers who live close to the border will be on a fast track to places like Sackville for cheap beer. However, he doesn't think this is a huge problem.

"We know that New Brunswickers have been paying too much because when you compare to the price in the U.S. and Quebec, these prices are still too high," he said.

Last summer's promotion proved this to be true. Brenda Selig crossed over from Amherst to cash in.

"Nothing's cheap in life. We saw it on the news and it was like, 'Wow, we're going to Sackville tomorrow.' So we're here in Sackville," she told CBC last July.

Lacey said having that kind of competitive beer market between provinces is good fortaxpayers and good for consumers.

"What itdoes is the competitive nature drives down prices which makes it good for everyone," he said.

The PEI Liquor Control Commission (PEILCC) "is aware of" NB Liquor's planned price drop,spokesperson Jamie MacLeod said in an email.

"The PEILCC continues to work with its suppliers to offer products with relevant pricing that addresses our full mandate, MacLeodsaid.

"The PEILCC can advise that it will again as in past be offering specials that in some cases will be even better than last year depending upon the supplier."

Craft brewers worried

New Brunswick's $7-million price reduction is not being cost shared with local craft brewers, Barbour said.

He later added an analysis of last summer's sales showed the value of offering 24-packs at $35.99 "will leave the consumer with more disposable income, therefore allowing them to do an additional purchase of craft beer."

Much likeMoosehead Brewerieslast summer, micro beer makersmay be hesitantto co-operate in the sales as they can't afford it. However,Stephen Dixon, president of the New Brunswick Craft Alcohol Producers Association, said he didn't even find out about the strategy until he "read it in the paper."

Lacey said ANBL should not be in the business of picking and choosing one distributor over another.

"This break is welcome, it is good for all taxpayers, but it should be good for all producers as well," Lacey said.

Dixon, who also owns Grimross Brewing Company,said he would like to see NB Liquor think more than they already are about craft beer when building strategies to grow the business.

He said while he understands ANBL is making a business decision, he fears the permanent price drop will have a detrimental effect on his industry.

"Logically, I would suggest that it makes sense that if a person is on the fence between a locally-produced craft beer and a macro beer, and they're trying to make up their mind and the macro is now discounted by $10, then it's going to have some [negative] impact on us."