Saskatchewan's provincial auditor says the province needs to increase oversight of craft alcohol producers.
Auditor Tara Clemett released the first part of her 2022 annual report on Tuesday. One of the areas her office reviewed was the Saskatchewan Liquor and Gaming Authority's processes to regulate the production and sale of locally manufactured craft alcohol.
Sales of craft alcohol have nearly doubled from 2017-18 to 2020-21, the report found. As of November, 64 craft alcohol producers had permits in Saskatchewan.
Clemett found quality assurance to be lacking. SLGA requires producers' certificates of analysis or lab test reports displaying product safety every two years. The audit found that 43 of 83 product lines needed updated certificates.
It found producers had missed deadlines and the SLGA did not follow up. The audit found some certificates were nine months past the required deadline.
"Effective regulation of craft alcohol production reduces the risk of the public consuming unsafe alcohol or alcohol inconsistent with labelling," Clemett said.
The report also found that the SLGA did not "use a risk-based approach" to inspections of producers and "high-risk manufacturing areas."
According to the audit, there are 64 permitted producers, but the SLGA did 10 inspections and 24 pre-permit inspections and had not inspected one producer in the past three years.
"Receiving regular lab test reports and regularly inspecting high-risk areas specific to craft alcohol helps protect the public," Clemett said.
Renewal of permits
The audit said permit renewal is also an issue.
"Producer permits expire after three years; four craft alcohol producers operated without a valid permit during our audit period," the report said.
While there were no product recalls during the audit period, Clemett said it's important to have inspections on a regular basis.
"Without the information, how do you know if there may be issues?" her report said.
It is the regulator's responsibility to request the certificates if they don't receive them, she added.
In an email to CBC, the Saskatchewan Liquor and Gaming Authority said it accepts the auditor's assessment and are committed to addressing the recommendations.
The auditor also recommended the authority assess "the reasonability of production and sales information" of producers.
The report said those figures drive the production levy the SLGA charges and could lead to underreporting of sales.
Production levies collected by the authority increased from $360,000 in 2016-17 to $2 million in 2020-21, according to the report.
"As a growing industry, it's important for producers to comply with policies and submit accurate reports," Clemett said.
Government needs balanced approach: NDP
The growth of the craft beer industry in Saskatchewan is a positive story, said Opposition NDP MLA Aleana Young.
However, it's important that government authorities do their job on regulation, in order for consumers to feel confident about supporting local businesses, the MLA for Regina University added.
"I am perhaps too well known for my enthusiastic support of some of our wonderful craft brewers in the province," she said.
"I think what we see is a burgeoning and dynamic industry and with that comes added oversight…. But it's also important for this government to take a do-no-harm approach."
Craft producers recognize challenges
Mark Heise, the president of Rebellion Brewing in Regina, said the sector has grown so quickly it's not necessarily a surprise to hear the liquor authority is having trouble keeping up.
"Government doesn't always keep pace with industry. So I think that's more than a valid comment that the auditor had to make," Heise told Garth Materie on CBC's Afternoon Edition.
Heise said he hopes the craft beer industry continues to thrive, doubling its market share in the next five years — and tripling it in 10. He said other craft producers have always worked closely with the province on regulations and will continue to do so.
"Clearly the SLGA … has not been able to keep up with their inspections and all that sort of stuff," said Heise.
"It doesn't mean they're bad, that people are just lazy. They're short staffed. They maybe don't have the right skill sets needed to properly regulate manufacturing of alcohol," he said.
"So there's definitely room for improvement."