Recently, Jeremy White of Cape Breton-based Big Spruce Brewing published an open letter airing his beefs with the Nova Scotia Liquor Corporation. In the letter, White cites ten very specific complaints regarding how the current bureaucracy is handling the growing craft beer industry, ranging from limiting the size of their glassware to the use of unconstitutional mark-ups (or what most people would refer to as taxes).
To hear the other side of the story, we contacted NSLC representative Denise Corra, who was happy to address White’s complaints, with the exception of those issues related to the ongoing lawsuit with Unfiltered Brewing, another Nova Scotia craft brewery, who are arguing that very issue of the linguistic hairsplitting between a mark-up and a tax, and whether the crown corporation has the right to collect either.
Corra responds to White’s first issue – that serving sample sizes, the only size allowed to be served in taprooms across Nova Scotia, are limited to 4 oz.. Corra explains that the restriction of serving sizes under the Hospitality Room License is a matter of public safety, or as the NSLC would put it: “They’re designed to allow ‘try-to-buy’ product sampling while remaining consistent with the principles of responsible enjoyment.“
White says this regulation forces Big Spruce to do four times as many dishes as necessary, albeit very tiny ones. Selling full pints requires craft brewers to also carry a license from Nova Scotia’s Alcohol, Gaming, Fuel and Tobacco Division, at an additional total cost of $872.15 for the application fee and mandatory three-year license. It’s not a massive fee, and Corra says many micro-breweries hold both licenses. White says the deterrent for him is that it would also bar minors from entering the establishment, including his children.
White took special issue with Moosehead Brewery’s Dartmouth retail location, which is able to sell beer without a full brewery on premises. White says this requirement is unfair and stifles craft brewers. It was a deal that was brokered between the provinces of New Brunswick and Nova Scotia when Moosehead had an underperforming brewery in Halifax, and Labatt was in a similar situation in Saint John. Each province was looking to maintain a strong presence of a single major brewer within the region, the one snag being that at the time it was required to maintain a brewery within a province to also maintain an outlet store there. The current situation is the agreement they arrived at, though Corra cites current NSLC Regulations as it being allowed under provision of “a minimum annual sales volume of one million equivalent twelve pack cases within the Province of Nova Scotia.”
Another issue raised in the letter was the lack of a Nova Scotia Craft Beer section within NSLC retail stores. That is something Corra says they’re working on.
“With eleven NS craft breweries listed at the NSLC where there were only three just two years ago, and with another five breweries expected in the next six months, we need to make sure we have an appropriate allocation of space for all of these great new products. It’s something Big Spruce will be able to see for itself when we begin to welcome Big Spruce varieties in our stores next spring.”
Beer bottles are proving to be another battleground for small breweries. According to White, Oland Brewery buys up most of the recycled bottle pool while craft brewers are forced to buy brand new bottles, to the tune of $500,000 a year. Corra says this one isn’t on them, citing Resource Recovery as the governing body for reusable bottles.
The hot ticket item of the whole thing, is that bone of contention in the current lawsuit with Unfiltered Brewing: NSLC’s Retail Sales Mark-Up Allocation (RSMA). The mark-up amounts to $0.50 per litre on craft beer sold directly by the brewers. To this Corra can’t offer comment, other than to note that the tax applies to both craft and commercial beer. Nova Scotia Brewers are trying to get that down to 5% of wholesale. Meanwhile in New Brunswick craft brewers are paying $1.05 a liter, and large scale brewers $1.75.
Jennifer Gray, of NSLC, admits that there have been growing pains, but it’s a work in progress. “We continue to be committed to doing all we can to help local industry be successful. It’s a challenge to keep pace with the growth this sector is enjoying and it’s going to take some time for the policy & regulation to keep pace. We are confident we’ll get there – it will just take some time.”
Brewers are expecting to sit down with the Nova Scotia Liquor Corporation to discuss those policies and regulations on November 22nd.