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Changes to Benefit Craft Brewing Industry

Government is changing the markup that is applied to direct sales of craft beer to help the Nova Scotia craft brewing sector continue to grow and thrive.

The Retail Sales Markup Allocation charged to craft brewers will change from $0.50 per litre on craft beer to five per cent of wholesale costs of sales made on their premises, consistent with other craft and farm sectors of the beverage alcohol industry.

This will ensure that craft brewers are treated the same as their counterparts in the farm wine and craft distillery sectors as it relates to on-premise sales.

“Craft brewers are playing an increasingly significant role in the economy and tourism in communities across the province,” said Premier Stephen McNeil. “We’re pleased to see the success of these entrepreneurs and look forward to this measure helping the sector keep growing.”

The Nova Scotia Liquor Corporation (NSLC) is responsible for setting the retail price of liquor products sold in Nova Scotia. At NSLC outlets, the difference between the retail price and amount paid to producers for their product represents markup revenue for the NSLC.

At craft breweries, distilleries and local wineries, the business owner retains the markup, but is charged the Retail Sales Markup Allocation. The NSLC uses the Retail Sales Markup Allocation as a tool to monitor the volume of locally produced beverage alcohol, while the revenue it generates is used to support public programs.

The Retail Sales Markup Allocation for craft brewers had been set close to 10 years ago, when there were only a handful of craft brewers in Nova Scotia.

“This change will have a positive impact in every region of the province,” said Emily Tipton, president of the Craft Brewers Association of Nova Scotia. “With more craft breweries per capita than any other province in Canada, and 12 per cent of Nova Scotia’s tourists visiting a craft brewery this year, this announcement will help craft breweries grow and make more world-class beer.”

It is expected that the change to the Retail Sales Markup Allocation will reduce the amount craft brewers pay by about $800,000 per year. In the current fiscal year, the sector will pay close to $1.2 million.

The change for craft brewers will take effect April 1, 2017.

Government will continue to work with the craft beer sector and other partners in the beverage alcohol industry to enhance beverage alcohol policy in the future.

Source: Release

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