NB Liquor (ANBL) is under the microscope in the latest report released by the provincial auditor general.
Paul Martin highlighted concerns about the corporation’s role in developing the province’s liquor industry.
Speaking Thursday before a legislative committee, Martin said he found engagement with the province’s more than 100 local producers is not a regular occurrence.
“We found that though ANBL did inform local producers of decisions and changes that affected the industry, ANBL failed to effectively engage with them prior to implementing these changes,” said Martin.
Martin went on to say that NB Liquor did not adopt solutions to issues raised by local producers, despite admitting that policies and programs are developed in ways that are “disconnected” from the people most affected by them.
The auditor general’s latest report also found issues with the pricing process used by NB Liquor.
It said the corporation’s current pricing model could hinder profits, and favours some suppliers over others.
Martin found that NB Liquor typically relied on producers to set retail prices, creating risk of lower profits.
His report also noted that the corporation had at least four special agreements with local producers, resulting in lower markups being applied to those products.
“Even though these decisions would have reduced ANBL’s profit, it did not measure the financial impact in three of the four cases. In the fourth case, the arrangement resulted in ANBL paying more than double the original cost,” said Martin.
In addition to reduced profit, Martin said the special arrangements created inequity among producers and decreased the level of transparency, which contradicts direction given to ANBL in its 2020-21 mandate letter from the province.
Martin also noted a lack of records to support several key financial decisions made by the Crown corporation, including undertaking a two per cent reduction in mark-up for domestic brewers in 2020-21, and the impact of its Everyday Value Beer promotion created to reduce cross-border sales.
The lack of records is part of what his report described as widespread issues relating to documentation and data retention.
Martin made 19 recommendations focused on improving communication and engagement efforts with local producers, increasing transparency and accountability, and ensuring recordkeeping and historical data can be retrieved.
ANBL agreed overall with the recommendations, he said, but said it would not undertake a comprehensive retail price comparison across all product categories.
“This is unfortunate as the comprehensive review of retail pricing would enhance accuracy, consistency and transparency in the pricing process,” said Martin.
Martin said his office also did not get a clear answer from ANBL on when improvements would be made to retaining historical information.
You can view the full report by clicking here.
