Changes to Discount Rates for Craft Breweries Announced
Siobhan Coady, Deputy Premier and Minister of Finance, and Bruce Keating, President and CEO of the Newfoundland and Labrador Liquor Corporation, provided details on the increased discounts on the commission craft brewers pay the NLC.
These changes were approved by the NLC Board of Directors and announced as part of Budget 2020. They were made in response to feedback from craft brewers and will save the industry more than $1 million annually.
Another change includes the removal of any distinction between the product sold on-premise at a brewery or in NLC Liquor Stores, NLC Liquor Express locations or convenience stores. This change ensures that brewers receive the same revenue for products they sell, regardless of location.
The new discounts on the mark-up rates for different sales volumes include:
0-100,000 litres: 95 per cent discount;
100,001-250,000 litres: 75 per cent discount;
250,001-500,000 litres: 55 per cent discount;
500,001-1,000,000 litres: 50 per cent discount;
1,000,001-1,500,000 litres: 40 per cent discount;
1,500,001-1,700,500 litres: 33.3 per cent discount; and
1,700,501-2,000,000 litres: 15 per cent discount.
There are currently 19 craft breweries in the Newfoundland and Labrador, of which only four produced over 100,000 litres in the fiscal year 2020. This change represents a significant commission discount for the industry.