North

Bar owner sees steep jump in prices after N.W.T. gov't changes liquor distribution

The Northwest Territories government believes a recent change in liquor distribution could translate into savings on the retail level, despite one bar owner seeing an 18.3 per-cent jump in prices of domestic beer after making his first purchase under the new model.

Territorial gov’t cancels contract with liquor warehouse; moves distribution through liquor store

The price of alcohol products in the N.W.T. is regulated by the liquor commission, which is an agency of the territorial government. (CBC)

The Northwest Territories government believes a recent change in liquor distribution could translate into savings on the retail level, despite one bar owner seeing a drastic jump in the price of domestic beer after making his first purchase under the new model.

The government's liquor warehouse in Yellowknife closed on April 1, moving distribution to the city's liquor store.

"Certainly I'm going to have to raise prices," said Bob Stewart, owner of the Kilt & Castle Pub in Yellowknife. He showed CBC invoices from March and April that reflected an 18.3-per-cent jump in domestic beer.

"I'm not willing to personally absorb the whole thing," he said.

Stewart also raised concerns about how the city's uptown liquor store — where business owners pick up their orders — is not set up to manage bulk purchases.

He said his order wasn't ready when he came to pick it up, and then getting it out the door was tricky.

"They can't fit a pallet in the back door so they can't bring a forklift to your vehicle," he said. "You have to load up your vehicle by hand by walking in through a door. Walking out to your car, case by case."

Bob Stewart, the owner of the Kilt & Castle Pub in Yellowknife, says he expects he'll need to raise domestic beer prices. (Chantal Dubuc/CBC)

Stewart said the government never reached out to him to gauge his opinion before making the change, and if it had, he would have told them the Uptown Liquor Store does not have the capacity to manage wholesale orders.

According to Sandy Kalgutkar, deputy secretary to the Financial Management Board, the warehouse dates back to before Yellowknife was connected to the south by the Deh Cho Bridge — the government needed to stock up on liquor during freeze-up and break-up of the Mackenzie River.

Now with the bridge in place and a stable supply primarily from one warehouse in Alberta, there is less of a need for this amount of stockpiling.

As for prices, Kalgutkar said they were set to rise this year anyway, because the federal excise tax and freight costs are going up.

Moving distribution to the liquor store helps mitigate some of that jump, he said, as it saves the taxpayer $300,000.

"We're going to try to pass on as much [of that savings] as we can," said Kalgutkar.

"Licensees we anticipate will not see a difference in their prices and the consumers … would be more likely to see a minor drop in prices."

The city's two liquor stores are owned by Ed Eggenberger, who has a contract to sell liquor owned by the Northwest Territories government. Eggenberger receives a commission on his sales.

Kalgutkar wasn't able to say exactly what that commission is.

The wholesale and retail price of liquor and beer in the territory are regulated by the N.W.T. Liquor Commission, which is an agency of the government.

Written by Randi Beers, based on reporting by Richard Gleeson

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