Big markup on Nova Scotia mead for New Brunswick Renaissance fair highlights trade barriers

Big markup on N.S. mead for N.B. Renaissance fair highlights trade barriers

An $11K order ballooned to $25K under N.B. liquor fees, forcing a Renaissance fair to slash its order

A week before Nova Scotians Connor and Maria Jeffreys were set to deliver nearly 600 bottles of mead to a New Brunswick Renaissance fair, the owners of Fireside Meadery hit a regulatory wall that threatened the deal.

While the Musquodoboit Harbour entrepreneurs knew New Brunswick’s Crown-run liquor retailer (ANBL) had to act as the middleman, they were stunned to discover ANBL planned to mark up their product by more than 100 per cent — pushing an $11,300 order to roughly $25,000.

To make the math work, the Shediac Renaissance Faire was forced to trim its purchase to just 240 smaller (375 ml) bottles, reducing the deal to roughly a third of its original value.

"It was really disappointing to have that happen because they got less product [and] they had to pay more for it," Connor said. "And then we had a smaller order in the end. And you know, we're a growing business and that money would have made a huge impact on our ability to expand and produce more."

Mead is considered the world's oldest alcoholic beverage and is made using water, honey and yeast, although fruit additions and spices can also be used.

Fireside Meadery sells out of every batch it crafts and is largely self-funding an expansion into a bigger facility, making every lost sale hurt that much more.

Maria said that while ANBL staff were polite and professional, receiving the official markup quote felt like a gut punch.

"It's almost like you feel your heart kind of drop in your stomach," she said.

For Sébastien Després, the executive producer of the Shediac Renaissance Faire, using Atlantic Canadian products is a priority, so he was "astounded" by the markup.

"It feels counterproductive," he said. "If we are to survive trade wars, if we're to survive 50 per cent tariffs on our goods, our provinces need to learn to work together, especially Maritime provinces."

Després said he plans to bring back Fireside's mead next year, but hopes barriers like this get removed.

"I think this is part of a bigger issue where we expect free trade with our American neighbours and we don't even have free trade between the Maritime provinces," he said.

In a statement, ANBL said that under New Brunswick's Liquor Control Act, fairs, festivals and other events must purchase alcohol through the Crown corporation.

The regulator added that recent interprovincial direct-to-consumer agreements do not apply here because the transaction isn't a direct sale from a producer to an individual consumer.

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ANBL applied standard wine markups, saying fees would have been lower had the festival chosen a New Brunswick maker — citing its mandate to support in-province producers.

The Jeffreys's plight attracted the attention of Nova Scotia Premier Tim Houston, who spoke about the matter unprompted during an interview with CBC News after the breakdown of the trade deal with the United States.

"This shouldn't be happening ... that's on the premiers when they hear about this foolishness that happens in the bureaucracy below us to have the courage to stamp it out," he said.

"And that's certainly what I want to do and will do in Nova Scotia. But we need that across the board because we just can't have those types of things happening within our country when we're dealing with everything else in the world we're dealing with."

Connor said they had contacted members of the PC Party in Nova Scotia, hoping there was some sort of workaround to the issue. The issue somehow made its way to the premier.

How it would work in Nova Scotia

In a statement, Nova Scotia's Crown-run liquor retailer and regulator, the NSLC, said that if the situation had been reversed, a Nova Scotia festival could purchase the alcohol directly from the New Brunswick producer.

It said the alcohol could be delivered directly to the festival and wouldn't have to be taken to an NSLC location or distribution centre.

The New Brunswick alcohol producer would then have to pay the NSLC what's known as a retail sales markup allocation, which is "calculated at five per cent of deemed producer cost, not the retail cost."

Assuming an $11,300 sale — as was planned between the Jeffreys and Després — the mead producer would have to pay an allocation of around $320.

The Jeffreys said they weren't expecting so much markup from ANBL.

"It definitely doesn't seem reasonable, especially because … we actually had to go up a day in advance to drop it off to the ANBL, so that [the Renaissance fair people] could go and pick it up from the ANBL [in Shediac]," said Connor.

He made the drive with his father-in-law and then returned home that same day. The Jeffreys then drove up to the event on Saturday.

They'd like to see more work done to reduce interprovincial trade barriers.

"With the current state of the world, we really need to unite as Canadians to support, not only the local businesses in our provinces, but also the provinces surrounding us," said Maria.

"We should all be able to rise up together."

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Richard Woodbury is a journalist with CBC Nova Scotia. He can be reached at richard.woodbury@cbc.ca.