Finance
November 26, 2018

Provincial Government Announces Changes to Support a Modern Alcoholic Beverage Industry in Newfoundland and Labrador

The Honourable Tom Osborne, Minister of Finance and President of Treasury Board and Minister Responsible for the Newfoundland and Labrador Liquor Corporation (NLC), today announced several changes to regulations that will support the province’s fast-growing craft beverage industry and promote growth.

The Provincial Government is increasing the discounts to the remissions craft beverage facilities pay on beer, spirits, cider and non-grape wine produced in Newfoundland and Labrador. The remission discounts will be higher again when producers sell their products on site at their facilities, including restaurants and tasting rooms attached to their facilities.

Under these changes, remission discounts will be as high as 40 per cent for product sold at retail stores and through the NLC, and as high as 50 per cent for product sold at craft producer-owned facilities. Existing wineries which currently enjoy a 95 per cent discount will maintain this discount. The full list of rates is included in the backgrounder below. These changes will help support an industry with significant growth potential and will encourage new entrants.

Other changes include:

  • Permitting “do-it-yourself” beer brewing and winemaking businesses to operate in Newfoundland and Labrador. These businesses are common in other provinces, and will be subject to the same NLC oversight as other establishments that sell alcohol.
  • Removing the $50 application fee for all-ages events where a liquor licence is requested. Such permits are common for birthday and anniversary celebrations, but are not required for weddings, where alcohol sales are already permitted through regulations.

The Provincial Government has committed to continued work with craft beverage producers on an industry-wide review to continue growth in the sector.

These initiatives will help local businesses in the province, many of which are in rural areas, grow and create employment. The changes deliver on commitments in The Way Forward to strengthen the province’s economic foundation. The Way Forward outlines all actions the Provincial Government is taking to achieve a strong, diversified province with a high standard of living, and can be viewed at thewayforward.gov.nl.ca.

Quotes
“The Provincial Government is committed to modernizing regulations to keep pace with a modern and expanding industry. The craft beverage industry in Newfoundland and Labrador in particular is set to grow significantly in the coming years, and we have heard from many entrepreneurs who want to introduce new ways of selling alcohol safely and responsibly in our province. The Provincial Government is committed to supporting local businesses as they work to grow and diversify the alcoholic beverage industry while competing on a national and international stage.”
Honourable Tom Osborne
Minister Responsible for the Newfoundland and Labrador Liquor Corporation
Minister of Finance and President of Treasury Board

“NLC is pleased to work with government and our industry partners to create opportunities for craft producers to be successful in our Province. These collaborative efforts are creating economic benefits and enhancing customer choices and experiences. Today’s announcement clearly demonstrates a willingness by all stakeholders to enhance the development of the local beverage alcohol industry.”
Sharon Sparkes
Interim President and CEO, Newfoundland and Labrador Liquor Corporation

“This is a positive step in the right direction for the craft brewing industry in Newfoundland and Labrador. In addition to these changes, the Provincial Government has committed to working with us on a full industry review and economic impact study for fall 2019. This is definitely what we need to help our industry grow and we look forward to working with them in the future.”
Justin Fong
Chair, Newfoundland & Labrador Craft Brewers Association
Director, Marketing and Sales, Quidi Vidi Brewing Co.

“I would like to thank the Provincial Government for recognizing the emerging contribution of the craft brewing industry in Newfoundland and Labrador. This reduction in commission rates is a critical and important first step, and we look forward to working together further on a comprehensive review of the craft brewing industry in the near future.”
Craig Flynn
Co-owner, Yellow Belly Brewery

“As a result of the new incentives announced by Minister Osborne and the Provincial Government, the Newfoundland Distillery Company is pleased to announce that we will now be investing in new stills and equipment so that we can continue to grow and expand in the province and export to the rest of Canada and internationally.”
Peter Wilkins
Co-Founder, Newfoundland Distillery Company

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Media contacts
Marc Budgell
Finance
709-729-2477, 689-0430
marcbudgell@gov.nl.ca

Darrell Smith
Newfoundland and Labrador Liquor Corporation
709-724-1165, 691-4478
Darrell.smith@nlliquor.com

Justin Fong
Newfoundland & Labrador Craft Brewers Association
709-749-6694
justin@quidividibrewery.ca

Craig Flynn
Yellow Belly Brewery
709-689-3735

Peter Wilkins
The Newfoundland Distillery
709-683-8472

BACKGROUNDER

Preferential Mark-Up Changes for Craft Beverage Producers

The following changes apply to sale of product at licensed retail stores in the province:

Type of business

Current discount for retail store sales

New discount

Craft breweries

33.3% discount on first 1 million litres produced

40% discount up to 1 million litres.

 

15 % discount on next 500 thousand litres produced

33.3% discount for production between 1 million and 1.25 million litres

15% discount on production between 1.25 million and 1.5 million litres.

10 cents per litre discount on all kegs of beer up to the 1.5 million litre discount cut-off.

50% discount on beer distributed from craft brewers directly to retail outlets, up to 100,000 litres.

Cottage wineries

33.3% discount on all production of non-grape wines

40% discount on all production of non-grape wines.

Distilleries

33% discount for up to 25,000 litres of spirits produced

40% on distilled production up to 40,000 litres.

33.3% for production between ,40,000 and 70,000 litres

15% for production between 70,000 and 100,000 litres.

Cideries

33.3% discount on all production of cider

40% discount on production up to 10,000 litres.

33.3% for production between 10,000 and 20,000 litres.

15% for production between 20,000 and 25,000 litres.

The following changes apply to sale of product at a craft beverage producer’s facility:

Type of business

Current discount for sale at production facility

New discount

Craft breweries

33.3% discount on first 1 million litres produced

50% up to 250,000 litres.

Cottage wineries

95% discount on all non-grape products

50% discount on all non-grape products at new wineries.

95% discount will remain for all existing wineries.

Distilleries

33% discount for up to 25,000 litres of spirits produced

50% on production up to 100,000 litres.

Cideries

33.3% discount on all production of cider

50% on production up to 25,000 litres.

2018 11 26                              11:25 a.m.