Nova Scotia reduces markup fee on province's craft brewers

Nova Scotia is reducing the markup fee it applies to direct sales of craft beer to make it consistent with farm wineries and craft distilleries.

Change will reduce total amount craft brewers pay by about $800K a year

The charge to craft brewers will change from 50 cents a litre to five per cent of wholesale costs of sales made on their premises. That's expected to reduce the amount craft brewers pay by about $800,000 per year. (Rebecca Pate)

Nova Scotia is reducing the markup fee it applies to direct sales of craft beer to make it consistent with farm wineries and craft distilleries.

The charge to craft brewers will change from 50 cents a litre to five per cent of wholesale costs of sales made on their premises. That's expected to reduce the amount craft brewers pay by about $800,000 per year.

The Nova Scotia Liquor Corporation is responsible for setting the price of liquor sold in the province. At NSLC outlets, the corporation makes the difference between the retail price and amount paid to producers. 

At craft breweries, distilleries and local wineries, the business owner retains the markup, but is charged a retail sales markup allocation.

Craft brewers happy

"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 corporation said in a news release on Tuesday.

A Halifax brewery, Unfiltered Brewing Inc., filed a lawsuit in August in a bid to get the liquor corporation to scrap the fee.

But Premier Stephen McNeil said the change was the recommendation of the craft brewers, who approached the government about a year ago.

"We have seen craft brewers playing an increasingly significant role in the economy across our province from one end to the other," he said.

He said reducing the tax would help the province by boosting economic growth and helping job opportunities for young people.

The president of the Craft Brewers Association of Nova Scotia welcomed the change to the markup, which was last set about a decade ago. 

"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," Emily Tipton said in a statement. 

The change takes effect April 1. 

With files from The Canadian Press