Brewery denied direct sales
NWT Brewing owner says surcharges tied to mandated distribution by liquor commission make his beer unaffordable
Jessica Davey-Quantick
Northern News Services
Friday, August 25, 2017
SOMBA K'E/YELLOWKNIFE
Fletcher Stevens is frustrated his kegs are sealed with red tape.
Fletcher Stevens, co-owner of NWT Brewing Company and the Woodyard Brewhouse & Eatery, is frustrated the NWT Liquor Licensing Board won't give permission for Yellowknife businesses like hotels and restaurants to purchase NWT beer directly from his business. - Jessica Davey-Quantick/NNSL photo |
The NWT Liquor Licensing Board recently denied the Explorer Hotel's request to purchase beer directly from his brewery, NWT Brewing Company. Instead, businesses must purchase it through the liquor commission's warehouse.
"We're trying to find ways to streamline things and yet we're held back by what we can actually sell," said Stevens, who said he's been approached by local hotels, fishing lodges and Boston Pizza, all interested in stocking his product.
The problem is, he says, when he sells his product through the liquor commission, the commission puts a markup on the product to cover warehouse costs and administrative fees – all while the territory already has the highest beer manufacturing tax in the country.
"Basically it just drives up the cost per litre so our selling price is close to $100 more than a keg of a Molson's or Labatt's product," he said, which he says means many local businesses wouldn't be able to afford to carry his product and still make a profit.
For micro-breweries making up to 1,500 hectolitres of beer like the NWT Brewing Company does, an additional $1.11 is tacked on for every litre sold. That tax went down to 67 cents on Aug. 3, but the rate is still one of the highest in Canada. According to a 2015 legislative assembly briefing note on beer taxation across the country, it ranges from 20 cents per litre to 98 cents per litre.
The NWT liquor regulations state with the board's permission, NWT Brewing can circumvent the liquor commission's warehouse and administrative fees by distributing its own beer, but the board isn't granting that permission.
Stevens said even a letter from Peter Maher, director of liquor operations, couldn't get the taps flowing.
"They're the ones who run it," said Stevens. "The people who are enforcing (the rules) are saying no to the people who are making them – it just doesn't make sense."
The NWT Liquor Commission is administered through the Department of Finance. Yellowknifer contacted the department for comment, but was advised this issue isn't under the purview of the commission.
"The NWT Liquor Licensing Board is responsible for regulating liquor licensing matters such as this (not the Liquor Commission)," stated Todd Sasaki, communications officer with the finance department. "They are a regulatory tribunal that operates at 'arm's length' from the GNWT."
The NWT Liquor Licensing Board, management at the Explorer Hotel and Maher did not return requests for comment by press time.
Stevens said right now, he is consulting with a lawyer to see if he "actually has a leg to stand on."
"I just don't understand what's gone wrong with this liquor board," he said. "Right now, there's no rationale for their decisions that they're making. They're getting used to being able to say no and getting away with it, and no one's able to make them accountable for it. Now, I'm going to hold them accountable."
