NSLC execs pressed to grow profits in face of aging population
President says beer sales down, but Nova Scotians drinking more wine
Nova Scotia's aging population is forcing liquor executives to come up with new ways to keep profits growing.
The president of the Nova Scotia Liquor Corporation told a legislature committee Wednesday that beer sales, which make up 46 per cent of what stores sell, continue to decline.
Bret Mitchell says that's a trend across North America. He says as people age they tend to move to spirits or wine.
Although hard liquor sales are also down, people are buying more wine. For the year ending March 31, 2014, revenue from wine sales was up 3.7 per cent.
Ciders, particularly local brands, are also selling well.
Overall, profits are up at the liquor corporation, but Mitchell says keeping them up will require lowering costs and getting customers to acquire more expensive tastes.
"We are not forecasting at this point that our revenue is going to decline, but we're going to do everything we can to not only stabilize it but increase it," he told members of the public accounts committee.
Simply increasing prices isn't the answer, according to Mitchell. He calls it "a fool's game."
"You can only increase prices so far before customers just buy less or they move to some alternative," he said. "So we do not rely on pricing very often in terms of our profitability mix."
Instead, Mitchell thinks the key is to convince people to buy more refined products.
"If we can get you to buy a $17 bottle of wine instead of a $15 bottle of wine, we're not getting you to drink more, we're getting you to make us more money."
It's one way the corporation has been able to continue to grow profits, Mitchell told provincial politicians.
"Quite frankly it's been the only way that we've been able to enhance our profitability and our margins going forward."