New Brunswick gets a D on liquor policy report card

New Brunswick Liquor needs to raise the bar when it comes to its "outdated' liquor policies, says a national food industry group.

The latest report card from Restaurants Canada says a lack of action is the main reason the Crown corporation's mark dropped from C- in 2015 to D this year.

The association, which represents restaurants, bars, caterers and others, said New Brunswick has made plenty of promises but done little follow-through.

Regulations that require the industry to pay retail prices for alcohol are outdated and should be changed. 

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Although Restaurants Canada applauded the company for its service to regular retail customers, the group said NB Liquor doesn't do the same for bulk buyers and hasn't moved much on the licensee side, compared with other provinces.

Luc Erjavec, vice-president of Restaurants Canada in the Atlantic region, said a major concern is the Liquor Control Act hasn't been updated to reflect modern business practices. 

"New Brunswick is lagging many jurisdictions in terms of adapting to the marketplace and recognizing the value of the industry and what we can do in terms of economic activity and serving our customers," said Erjavec. 

Wholesale pricing an issue

Erjavec said the policy should include the addition of wholesale pricing, so there is a price difference for businesses that  "may buy hundreds of thousands of dollars in alcohol a year" and a regular customer who buys a bottle for a household.

Bars and restaurants pay the same amount for a bottle of wine or a case of beer as ordinary customers.

"We're a wholesale purchaser but not treated as such, " he said. "If we had wholesale pricing it would allow us to put a more competitively priced product on the table."

In NB Liquor's 2016-2017 annual report, overall sales were at $415.1 million. The corporation's stores sold the most alcohol at $274 million, and agency stores were in second place at $92 million.

Licensees such as bars and restaurants accounted for $44 million, and grocery stores just over $ 3 million.

"We've seen sales pretty steady over decades," Erjavec said. "But we've seen licensees share of the market decrease …a major driver is price."

Mark Barbour, spokesperson for NB Liquor, said the corporation is not going to negotiate with the restaurant association in the news media but it is in constant conversation with the Atlantic Canadian chapter of Restaurants Canada about wholesale pricing. 

"Discussions have taken place on this topic and it's our hope that we can continue to move forward, but it was never promised to them that it would be a guarantee." 

Barbour said the corporation has to look at the issue and analyze if from a business perspective. 

Greg Belyea, owner of the Barrel's Head Gastropub and Wine Bar in Quispamsis, said he's been asking for changes to wholesale pricing for the past 12 years but his appeals have fallen on deaf ears.

The industry has been looking for fair treatment when it comes to volume pricing so it would be able to better cope with fluctuating food costs.

NB Liquor, however, is more competitor than partner, Belyea said.

"When we buy 1,000 litres of propane a week we don't pay the same as you when you fill your barbecue tank. That is something we are able to negotiate with various suppliers based on consumption," he said. 

'It would appear to me that their focus is on outdated policies for pricing as opposed to market competitiveness.'-John Slipp

"We get the exact same price for 200,000 worth of beverage alcohol as you would if you walked in and bought a six-pack a year."

Doug Williams, owner of King Street Ale House in Fredericton, said alcohol shouldn't be ordered through NB Liquor in the first place and its pricing is "completely out of whack with reality." 

"The constant club they have of, 'Oh, if we eliminate NB Liquor, we have to eliminate medicare — it's not correct," he said, 

Williams said the pot industry, which the New Brunswick government will be involved with, won't be any better.

"It's going to cost more, it's going to be worse quality and when you want to buy it, the store is closed," he said. "That is the model."

Restaurants Canada's also noted that all products, including craft beer, must be purchased through the liquor corporation, "but the ever-changing supply and listings of craft beer is proving to be a major challenge for the corporation to manage."

Focused on the 'outdated'

As a result, the Restaurants Canada report urged the province to allow licensees to order directly from the brewer.

John Slipp, whose shop is in the Atlantic Travel Centre agrees there needs to be an overview policies and pricing strategies to be more competitive. 

For years, Slipp has been trying to get craft beer in his store, and recently tried to pick up a craft distiller out of northern New Brunswick. NB Liquor said no.

"It would appear to me that their focus is on outdated policies for pricing as opposed to market competitiveness." 

Higher mark next door

Meanwhile, the Restaurants Canada report raised a glass to  Nova Scotia, which jumped from a C + to a B-.

The report said Nova Scotia is one of the few provinces to provide licensees a wholesale discount: 10 per cent on wine and spirits.

"Licensees also have access to a limited number of private stores, offering great variety, price and service," read the report.