The cost of doing business is still much higher for drinking places on the Rock compared to the rest of the country
ST JOHN’S – Sept. 10, 2019 – For the third time since 2015, Restaurants Canada has taken stock of liquor policies impacting foodservice and hospitality businesses from coast to coast in its biennial Raise the Bar report.
Once again, Newfoundland and Labrador has received a D-minus for failing to improve conditions for bars and restaurants. The report outlines the reasons for this grade and provides a path forward for the province to improve its standing.
“Licensed establishments across Newfoundland and Labrador have been experiencing painfully slow sales growth in recent years,” said Luc Erjavec, Restaurants Canada Vice President, Atlantic Canada. “While this has mainly been due to a weak provincial economy, unfriendly liquor policies make operational realities even harder in times like these.”
Full 2019 Raise the Bar report card rankings:
|B-||Prince Edward Island|
|D-||Newfoundland & Labrador|
A hint of progress
Newfoundland Labrador Liquor Corporation (NLC) deserves credit for continuing to consult with the Licensee Working Group that was formed in response to the first report card from Restaurants Canada.
The working group meets quarterly to identify issues and come up with solutions, and also circulates a newsletter to keep licensees informed of any developments that might impact their operations.
Acting on one of the working group’s recommendations, NLC recently reduced the deposit amount that licensees must pay when ordering non-stocked liquor products. Now only 50 per cent of the cost is required up front, instead of 100 per cent. This has provided welcome relief for businesses that previously struggled with the loss of cash flow, over a significant amount of time, that was necessary for special liquor orders.
Thanks to the working group, licensees have also been able to benefit from improvements in product selection and experiences with liquor law enforcement.
But a lack of political will has unfortunately held the province back from taking steps to resolve more significant issues repeatedly raised by bar and restaurant operators.
Compared to two years ago, licensed foodservice operators in Newfoundland and Labrador say liquor policies are:
How can Newfoundland and Labrador raise the bar for licensed establishments?
Make wholesale pricing available to all liquor licensees, for all types of beverage alcohol products. Bar and restaurant operators on the Rock can’t get a volume discount on beverage alcohol of any type. Meanwhile, their counterparts in Nova Scotia and on Prince Edward Island have access to wholesale liquor pricing.
Undertake a comprehensive re-write of liquor legislation to cut red tape and reflect changing market conditions. It’s time to update rules that are out of step with modern business practices.
Reduce liquor licensing costs for establishments with higher sales volumes. Bar and restaurant operators in Newfoundland and Labrador are required to pay higher costs for a liquor licence if they sell more beverage alcohol, discouraging small businesses from growing their operations.
Allow all liquor licensees to sell alcohol for off-site consumption. Why should restaurateurs who are trained and trusted to serve alcoholic beverages within their establishments be restricted from selling those same products to their customers to enjoy off-site?
Introduce a liquor server wage. A wage differential for tipped workers allows restaurateurs to allocate more towards higher wages for non-gratuity earning kitchen staff, who are typically harder to attract and retain.
Reduce excessive markups on beverage alcohol products. The amount of tax collected on liquor in Canada is among the highest in the world. Across the country, a cocktail of federal and provincial taxes and fees currently make up: Nearly 50 per cent of the cost of beer; between 65 and 70 per cent of the final price of wine; and up to 80 per cent of the cost of spirits.
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About Raise the Bar
Raise the Bar is a report produced every two years by Restaurants Canada evaluating the impact of liquor policies on bars and restaurants across the country.
Provincial policies evaluated for the 2019 Raise the Bar report were reviewed within the following four major categories and, after analysis and weighting, each province was given an overall letter grade:
- Pricing and Selection
- Licensing and Regulation
- Customer Sales
- Political/Regulatory Activity
All survey results featured in the 2019 Raise the Bar report were compiled from more than 700 responses to an online questionnaire that was emailed to foodservice operators across Canada between June 12 and Aug. 26, 2019.
About Restaurants Canada
Restaurants Canada is a national, not-for-profit association advancing the potential of Canada’s diverse and dynamic foodservice industry through member programs, research, advocacy, resources and events. Canada’s foodservice sector is an $89 billion industry that directly employs 1.2 million workers, is Canada’s number one source of first jobs and serves 22 million customers across the country every day.