FREDERICTON – NB Liquor’s decision to sell its own brands of beer is evoking some of the same potential effects as a 12-pack of suds: confusion, anger, embarrassment, and a lack of information about exactly what happened. Details are still spotty, but the Crown corporation says it is on the verge of introducing two of its very own “value” brands to its agency and corporate stores for the bargain price of $18.67 per pack of 12 cans. NB Liquor spokeswoman Nora Lacey said it has contracted a New Brunswick brewer to produce beer under the Crown corporation’s own brand in a bid to curb cross-border shopping and stimulate slumping beer sales by moving into a lucrative, yet unexploited market for value-priced beer. Bound by confidentiality agreements, Moosehead Breweries doesn’t make its brewing contracts public, but the province’s other brewers, Molson, Moncton’s Pump House, and Fredericton’s Picaroons have confirmed they do not have the contract. Pump House CEO Shaun Fraser is upset his brewery wasn’t offered the opportunity to bid on the project. He said the opportunity could have catapulted the Moncton success story to the next level of Canadian brewers. “I can’t really use the words I want to use, but I think it’s pretty underhanded,” said an obviously irritated Fraser of the fact that NB Liquor did not issue a request for proposals before selecting a winning brewer. Picaroons owner Sean Dunbar is outright embarrassed by the Crown corporation’s incursion into the brewing industry, and says he thinks the venture will be awkwardly remembered once it undoubtedly fails. “This will certainly get made fun of right away, and if the NB Liquor name is associated with it, that doesn’t do anything for their reputation,” says Dunbar. “When it goes away, people will make fun of it for years.” Dunbar said NB Liquor seems to be confused about its own mandate. “When it’s convenient, they want to be seen as private, and they don’t have to follow the rules of public corporations,” said Dunbar. “On the other hand, their public persona allows them to be a monopoly.” Lacey said the Liquor Control act does not require an official tendering process, but she said Moosehead, Molson, Labatt, and Sleeman’s were asked to suggest proposals that would help increase lagging beer sales in the province. “It wasn’t an official tender process because it’s a resale product,” said Lacey. Brewers can currently sell their beer for $18.67 per 12-pack, but they must pay NB Liquor for the right to do so, and they can only sell at that price for a limited time. The new brands will cost $18.67 — the lowest legal price based on the province’s social reference price — all year long. “The intent here is to provide New Brunswickers with a high-quality, low-cost beverage. They won’t need to wait for a special,” said Lacey. “With the current economic situation, everybody is feeling the pinch.” Fraser said Pump House, which is in the process of setting up a canning unit to bolster an operation that employs more than 50 people, could have easily done the job for NB Liquor. He said Moosehead is simply receiving a kickback from the politically run Crown corporation. He said what makes the situation worse is that Pump House asked for the right to produce its own bargain beer last year, but was refused. “I don’t like that they have decided to do their own pricing and haven’t informed us and allowed us to do it,” said Fraser, who learned of the new beer brands through members of the media. “How do they pick a brewery in New Brunswick and spread the employment around without including us? That business for us would grow us to become a strong, strong brewery.” Charles Cirtwill of the Atlantic Institute for Market Studies said NB Liquor’s latest move is another sign it should be privatized. “It makes absolutely no sense to be in the direct business of making beer and/or buying it from somebody else,” said Cirtwill. “At the very least, they shouldn’t be directly competing with small breweries operating in New Brunswick.” Cirtwill said it’s already difficult for microbreweries to compete, and he noted the battles that have been waged between Molson and Moosehead for government subsidies. Now those same breweries are paying provincial taxes to a government that’s competing with them, he said. “They’re paying their competitors to undercut them.” Dunbar, whose Fredericton brewery has attracted a loyal following, said cutting prices is not the only way NB Liquor can boost beer sales. “Start doing things better and not cheaper, improve the beer selection in New Brunswick,” said Dunbar. “Look at yourself, instead of other people, is what we small guys try to do.” Moosehead Breweries spokesman Joel Levesque said NB Liquor’s new brands will be good for beer lovers and the beer industry. “New Brunswick doesn’t have a value segment right now, so anything that focuses attention on beer in general will be good for everyone in the industry,” he said. Levesque said Moosehead can’t speculate on what brewing contracts it is currently producing. Ferg Devins of Molson Breweries isn’t convinced that the new brands will have a significant impact on cross-border shopping, but he said it will be good for consumers regardless. “It may bring new competitive activity to the market place and competition is always good for the consumer.” Marco Morin of the NB Liquor agency store at the Mich Meat Market in Clare, located seven minutes from the Quebec border in northwestern New Brunswick, said he doubts the new brands of beer will curb cross-border shopping. “People who want to buy a Budweiser or a Bud Light will still go to Quebec,” said Morin. “It is not seven minutes that will stop someone from drinking the beer they like.”
