NB Liquor considers greater private sector role
Report raises possibility of more agency stores and outlets near border communities
NB Liquor is stopping short of calling for the Crown corporation to be privatized in a report for the provincial government. The report outlines ways to boost revenue.
Daniel Allain, the president and chief executive officer of NB Liquor, released the strategic review on Wednesday. It contained two broad recommendations.
While the proposed reforms are intended to give the private sector a larger role in the liquor industry, the report did not call for a total privatization.
"In short, it is not our focus or our intent to privatize NB Liquor at this time," Allain said in statement.
"However, more private-sector involvement in the asset is required. To make NB Liquor the most efficient and profitable asset in the province, we have to change the way we do business. A transition to a more entrepreneurial form of governance is necessary and will benefit NB Liquor’s valuation for future opportunities."
The two broad recommendations are calling for NB Liquor to examine its existing operations as well as exploring opportunities with third-party groups, such as strategic alliances with other regional liquor boards.
The report is intended as advice for the provincial cabinet. Finance Minister Blaine Higgs, who is responsible for the Crown corporation, has committed to responding to the recommendations.
The provincial budget is expected to be released on March 27.
NB Liquor, similar to all provincial departments and Crown corporations, has been asked to cut its expenses and boost its revenues. The provincial government is trying to reduce its $471-million deficit.
NB Liquor employs 456 full-time workers and 241 casual employees. The corporation generates $160 million in profits.
Adding border stores
Among the recommendations, NB Liquor is proposing the idea of setting up liquidation stores, similar to its outlet store in Salisbury, in communities near the United States and Quebec borders.
The corporation said the only risks could be objections from neighbouring provinces and the potential for "cannibalization" of revenue from other agency or corporate stores.
NB Liquor is also looking at more niche or specialty stores, such as private wine and beer stores.
As well, the corporation is considering changing the rules around agency stores. Agency stores are designed to improve access to NB Liquor products in "remote communities" that cannot support full corporate stores.
There is an exclusion zone that prohibits two agency stores from being within 15 kilometres of each other. The report says that zone should be reduced to five or 10 kilometres.
The report said the idea could boost revenue from agency stores. But, the move could also spark a backlash among existing agency stores.
The strategic review is also raising the possibility of seasonal NB Liquor agency stores. The special stores would be in communities that experience high traffic patterns in tourist seasons.
"Establish a seasonal agency store programme in areas within the province that may not warrant the establishment of a year-round agency operation but where ANBL may benefit from a seasonal operation. Possible locations might be in close proximity to seasonal tourist operations," the report said.