NB Liquor implements new policies for craft beer producers

NB Liquor is bringing in a range of new policies regulating the province's craft beer industry and one brewery is arguing the changes are too restrictive and are going to hurt businesses financially.

Among the changes, which started on April 1,isa new tiered cost system that increases the amount a brewery pays the corporationbased on how much beer or ciderit produces.

The changes also increase the amount paid to NB Liquor for each keg soldor packaged by small scale producers, from 73 cents per litreto $1.05 perlitreof beer and $1.60 perlitrefor cider.

That cost increasedto $1.75 per litrefor the larger craft beer producers and $2.10 for cider producers.

Thesmallest brewers, making less than49,900 litres of product don't pay perlitrefor sales.

NBLiquoris eliminating the requirement for a brewer to open their retail outletfor a minimum number of hours per day.

It is also allowingbrewers to sell other beers made in New Brunswick from their own stores, in addition to their own product.

Craft brewers react

"There is some good here," said StephenDixon, the presidentof the New BrunswickCraftAlcohol Producers Association.

"But most of it is not."

Dixon, who is also the founder of Grimross Brewing, saidNew Brunswick brewers must pay themarkup prices perlitreon top ofregularbusinesstaxes and HST.

He saidthe tiered system, increasing the amount a brewer pays according to production or as the brewer becomesmore successful, is unfair.

"There is no other industry in New Brunswick that has a penalty for growth, and that's what this is in my mindapenalty," said Dixon.

"There can be reasonable fees for services, I don't have a problem with that, but this is way out of whack and way out of proportion."

Dixon saidthe costs paid to NB Liquor are too steep.

"NBLiquordoesn't see the beer," said Dixon.

"They don't make it. They don't package it. They don't handle it. They don't transport it. They don't have anything to do with the sales process. They do nothing except for the end of the month wegivethem a chequefor the amount oflitreswe've sold, times the markup. That's not what a markup is that's a tax."

Changes benefit brewers

NBLiquorsaidthe policy contains cost increases and decreases that balance out.

"The changes we've made are revenue neutral compared to thisyear'srevenue,"saidGary Von Richter,director of customer serviceat NB Liquor.

"Yes,there are increases in the keg rate, but there are corresponding decreases in the packing rate. Sooverallit's revenue neutral."

Von Richter said that the growth of theindustry in theprovinceis atestamentto how well the Crowncorporationissupportingcraft beers and ciders.

"There are 23 brewers out there producing right now," said Von Richter.

"And seven more coming, with25 more expressinginterest. That says success to me."

Mark Barbour, spokesperson for NB Liquor, said the small brewers arecharged 50per centless than mainstream domestic breweries.

"So the industry is being cared for by us at ANBL and the government as well in terms of helping this industry continue toflourishand go forward because we charge them less for the markup in order for them to be in New Brunswick," he said.

New brewers cautious

Jake Saunders, a founder ofTrailway Brewing,is in the middle of building his new brewing facility in Fredericton. He saidpotential cost increases can give those considering brewing pause.

"You're going to be a little bit cautious," said Saunders.

"And a little bit nervous about some of these changes that are getting made."

The changes also increasethe total amount of stores a brewer can operate, to a maximum of four if the brewer sellsbetween1,000,000and 2,499,900 litresof beer a year.

Grimross'sDixon said the restrictions on new stores is a roadblock for small businesses.

"If I'm successful, I should be able to open as many stores as I want, and hire as many people as I want to work," said Dixon.

"But they are a monopoly and even though our sales are sosmallin comparison, theydon't want us doing that."