Competing with NLC-owned Rock Spirits is unfair, says Pasadena craft brewer

·3 min read
Jim Macdonald, co-owner of Western Newfoundland Brewing Co. in Pasadena, says it's unfair for N.L. businesses to have to compete against the provincial liquor corporation. (Colleen Connors/CBC - image credit)
Jim Macdonald, co-owner of Western Newfoundland Brewing Co. in Pasadena, says it's unfair for N.L. businesses to have to compete against the provincial liquor corporation. (Colleen Connors/CBC - image credit)

A craft brewer on Newfoundland's west coast says he's at a disadvantage because the provincially owned liquor commission favours its own canned products.

Jim MacDonald, owner of Western Newfoundland Brewing Co., said it's time for the provincial government to reconsider how Rock Spirits — a distiller wholly owned by the Newfoundland and Labrador Liquor Commission — is affecting local businesses like his own.

"They generally stick local producers all in a corner together, basically as one company, while they push their own products to the forefront," MacDonald said, pointing to the NLC's promotion of Rock Spirits products like Newfoundland Screech and Old Sam.

MacDonald said competition has become more intense in recent years, after the NLC purchased canning equipment to make "ready-to-drink" products, or RTDs. While the liquor commission said the cannery would be available for craft brewers to use, many rural brewers felt it didn't make sense to ship beer to St. John's in a tanker truck, so they did not avail of the service.

Instead, the canning equipment has been used by the producers of Lambs to make Lamb's Sociable Spiced Rum Punch, and also by Rock Spirits to produce four canned beverages, including Screech Punch.

MacDonald said those NLC-owned products are directly competing with local brewers — for both sales and shelf space.

Eddy Kennedy/CBC
Eddy Kennedy/CBC

NLC president Bruce Keating said he appreciates MacDonald's concerns, but he doesn't see it that way.

"Rock Spirits has been a part of the NLC and what we do as organization going back 65 years," he said. "What we're doing in the RTD category is not having any material impact on the success or otherwise of Mr. MacDonald's products."

The NLC has seen an explosion in demand for canned products, led by a wave of interest in beverages like coolers, seltzers and craft beer, said Keating. There are about 250 products in the ready-to-drink category, he said, and Rock Spirits produces only four of them.

But MacDonald said Rock Spirits is able to produce, store and market those products at a scale and price that other brewers just can't match. A six-pack of Screech Punch, for example, is on sale for $18.77. Similar products, even from large producers like White Claw or Mike's Hard, are selling for over $20 per six-pack.

"They're able to produce them very cheaply," MacDonald said. "Because they're able to purchase all their stock in large quantities, everything is just cheaper for Rock Spirits to produce. Not to mention they're owned by the government. They can float themselves as they please."

Cecil Haire/CBC
Cecil Haire/CBC

It's exceptionally rare for a government to own a distillery, but Keating said Rock Spirits has been hugely beneficial to the province. More than 80 per cent of its products are exported and sold in 32 countries around the world. All of their canned products, however, are sold locally. A scan of the NLC's website shows there are thousands of them available, and they're in every single liquor store around the province.

While MacDonald said the NLC "prioritizes its own products" when it comes to shelf space, Keating said volume has a lot to do with how products are promoted and placed within stores. He said the craft industry has shown tremendous growth in recent years but most brewers are still making relatively small amounts.

"Because of production volumes, it does create challenges at time in terms of our ability to get product and really provide that product to our customers on a consistent and a reliable basis," he said.

Keating did acknowledge craft beers could be better placed within many stores, and discussion are underway about "revamping" the refrigerated sections to give more prominence to craft beers.

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