The NSLC - The Devil we Know

I know I may be confusing sometimes. It may seem as if I think the NSLC should be done away with, and replaced with a simple flat tax on alcohol. But that is not the case. There is an inherent value in the organization, and some unfulfilled opportunity that needs to accrue to the people of Nova Scotia, that, if created or exercised, would make the organization both a greater asset to the Province, and a real tool in economic generation.

So before some people think I'll be out lobbing grenades at the BLIP warehouse, here are some things I understand to be good about the NSLC (the comments options on Blogger are to correct or guide me, so don't be shy) and some things I think we need to do with it.

Reasons why we should keep the NSLC.

1. Buying power. We are not a large place in the world. Having an organization run at a Provincial scale allows some minor leverage in the world. We recently saw how puny we are when the people who make Lagavulin Single Malt Scotch decided to assign our normal allotment to China. We are but a pimple on the dragon's ass.

We already get a great service in how product is shipped from Europe now, with containers being filled with various product headed here. That is a value to people who drink foreign products.

We need to use the single representative position the NSLC gives us to partner up with other Liquor Boards, Private Stores, and large agencies, as often as possible on group orders, shipping containers, or other deals with large suppliers. Some Atlantic Canadian cooperation has occurred in the past (New Zealand wines all came over on a group shipment, I recall) but we could perhaps do more. Quebec and Ontario are less than 24 hours away, after all, and it is not out of the question to try to piggy back on their shipments too. And maybe we already do - if so - good on ya!


2. Ease of Access. Let's face it. Nova Scotians would drink about the same amount of alcohol if we only had one store in the entire Province. Do you think everyone was sober during prohibition? But the problem arises when you consider how most people get to a liquor store. How many kilometers do we want people to have to drive to get home after buying their "Captain and Coke" and Keith's? The NSLC puts stores, many fully stocked with lots of products that don't sell that well, in places no sane private sector retailer would put that size store. This reduces the annual drunk driver distance total enough to make it worthwhile. To go further, the NSLC has started opening "Agency Stores" in small communities, but ones that are a centre of a local economy (like Whycocomagh, Middle Musquodobit, or Iona). These stores don't offer much variety, but they do provide legal means of access to booze for the Keiths and Captain crowds. And they can order in special for you if you live there. This is a service to the people that is one a government can, and perhaps should provide, and that a private business would be unlikely to provide, for a fair price, anyway.

We need to allow more private stores to open, or at least allow the existing ones to open more outlets. This won't reduce the need for the NSLC to operate the agency stores, but it may allow them to shift their emphasis to places where the goal of reducing trip length is desired. The private stores will always go to the better retail locations, that is how business works, but allowing them to do so, and providing fair access to product will mean more outlets overall, and potential reduction in size or even number of some of the NSLC medium and full size stores. It is illogical to have the private stores limited to one outlet when the NSLC is running around spending money on new retail space and fit-up that private industry would do instead, if it only were allowed to.


3. Good Union Jobs. This needs to be said right off the bat - I am not a big union person. If this were 1932 I would be, but it ain't. The NSLC provides a lot of pretty good paying jobs with descriptions of work that might not be as highly paid if the same work were done at Sobey's. Paying employees well with money that would otherwise go into government coffers is not all that bad - we get it back in taxes and economic energy. Of course the problem is that as with any organization that starts to think it has some power, the union will try to control things, and that is not their job. And then there will be another strike, and we'll have no one to buy booze from, except the private stores who have their own warehousing. And NB Liquor, of course.

Well, the union is about to grow in numbers, as they apparently just let all the casuals in... (I wonder why? Number of voters in the union maybe?). Some NSLC staff take the time to improve themselves, and they are worth it, but someone sitting behind a cash register all day really should be paid the same as they pay at the Superstore. That said, the NSLC needs to train their staff in the specialty business they are in. Then, with the training, the extra wage is justified, and, as with any other industry, the service and profitability should improve with worker knowledge.

This shows already in the private sector, where more trained and knowledgeable staff exist in the four licensed private stores than in all the NSLC and Liquor Licensing Board combined.

My point is this: Raise the bar for the jobs. Then the wages make sense, and the jobs become specialized where qualified people have a better chance at being hired, and the service and product information is better.


4. Buy Local. The strongest form of economic growth is import substitution (Jane Jacobs, Cities and the Wealth of Nations, 1985). Many Nova Scotia stores sell Nova Scotia Products. There are a lot of NS products that are sold in the NSLC, and many would not be there if the system was based on sales only. For every bottle of wine consumed in Nova Scotia that was made or even bottled here, we enrich our economy more than any other way we can via the NSLC.

On a buy local and on principle theme, this could be the best reason to keep the NSLC. If they were willing to commit to the plan. Any micro-brew fan will tell you that the NSLC sticks the local, fresh beer products from Propeller and Garrison (the award winning breweries we have and should be proud of) on the bottom shelves, and never in the fridge. This when they are almost the only brewery products whose quality actually benefits from refrigeration. Because of the Farm Winery regulations, the wineries are happier to sell wine at their winery outlets, because they almost lose money selling through the NSLC and their markups. We have to start thinking of the NSLC as more of an economic arm of government - one that has a role in promoting NS product, not just tolerating it.


5. The NSLC has staff who could potentially advise people on purchases. This means people can learn about the liquor they drink, and drink wiser, drink local, and enjoy their food more. As a Province wide organization, the NSLC could be a leader in the education of the public and the food and beverage industry.

The reality is that there are only a very few people in the organization who know more than the average Joe about the product they sell. And they are mostly clustered in Head Office and the single Port of Wines outlet in Halifax (I said mostly). The NSLC do have a wine course (called "The Gallo Course" because it is part of a marketing ploy from a huge California conglomerate) for staff, but don't recognize the local section of the world wide Association de la Sommelerie Internationale and their local graduates' training and certification. Local people who worked very hard to learn a lot about wine, beer and liquor, who work within the NSLC and know a lot about wine, are not recognized within the organization. Few if any people who have finished the very difficult Sommelier training have yet to be hired by the NSLC in any technical capacity (one former employee, one current employee, and two in process, I think). This is simply lost opportunity.

Instead of seeing the Professional Sommelier association (around 100 full Sommeliers in Atlantic Canada) as a resource to draw from, and to use for staff training, or to attract to the organization for their expertise and interest, the apparently insular and insecure management at the NSLC tends to shun these people, many of whom were or still are their best customers (not a wise move - see Bishops Cellar sales). There needs to be a better dialogue between the NSLC and the Canadian Association of Professional Sommeliers (aka CAPS - the local ASI sanctioned group) such that both groups benefit. There are certainly a few people in the NSLC with the knowledge and expertise to step right into the CAPS organization as active members. Their participation in the profession outside the NSLC, would only make things better for all parties. Recent months have apparently seen a bit of a realization on the part of the NSLC that there are many CAPS graduates in positions of influence in the wine and food and beverage industries in Nova Scotia. So much so, that for the NSLC to continue as a viable purveyor to the food and beverage industry, cooperation needs to improve. I am told that this renaissance (or is it thawing?) is being led by Peter Rockwell, perhaps the best known wine-knowledgeable person in the Corporation. If this is true, it can only bode well for the future of the food and beverage industry in Nova Scotia.


6. Finally, we don't want a privatized NSLC. There is a recent privatization model in Nova Scotia that the NSLC looks very much to be following. And if I were a mucky muck with the NSLC, I might want to follow it too. I knew Chris Huskilson when he was the electrical engineer who had just taken over as Manager of the Western Zone of NSPC (note the "C") at the end. Now Chris makes over a million dollars a year as CEO of NSPI - the now privatized arm of the Province that purveys a commodity to the people on Nova Scotia as a monopoly, or near monopoly.

Just like NSPI, the NSLC used to be a Commission of Government, adherent to all the rules and hiring practices and accountability that pertain to the Civil Service. The NS Power Commission reformed to a Crown Corporation, suddenly immune from such trivial government interference such as oversight of hiring practices, wage scales and so on, with a politically appointed Board. And the NSLC is now a Corporation, not a Commission. Do you see the pattern? If I were in a position of senior management at NSLC I certainly would. That $1,000,000 plus salary would clear my lenses, for sure.

NS Power then, slowly, went through internal changes, with the effects of some outside potential competition, and got to the point where they argued for a sell off to the Private Sector, with a gradual morphing into a stand alone company. One you buy shares in on the TSE. But it is fair to say that their attention to customers has come under scrutiny.

Do we want that to happen to our liquor business, with all the potential benefits that a government run organization could achieve, including those discussed above? How much motivation would one huge conglomerate have to sell NS products on a preferential basis? Would it have any need to provide basic service to remote areas for the same price for a 40 ouncer of the Captain? And how long would those Union jobs last? Would they inherit the control over supply that they now have, and yield it in a manner such that they bankrupt the private stores? The current version of the NSLC has not been able to do this, and some say they have tried, but a privately run business (say it was purchased by Sobey's, or the Irving Blue Canoe stores, or Loblaws) would be much more efficient at eliminating competition.

We know that big corporations focus on volume and not variety. Just look at the range of music in a Walmart compared to the CD's and vinyl at Taz Records. Taz slays Walmart in choice. A big corporation has no incentive to provide specialty products, and can only really do well at schlepping the "Captain Morgan and Keiths" to an unsuspecting public. With as few people working as possible. Variety is lost, sameness triumphs.

And for me, as for many, variety is the spice of life.




So, what am I saying here? I think we need to reassess the NSLC as an arm of government that is mandated to not just turn cash over at year's end. But as more of a marketing board arrangement, buying and distributing liquor products to retail outlets throughout Nova Scotia, but moving out of the pure retail game, and leaving that part, over time, to the private sector. But not all at once. Service to Nova Scotians has to include access, variety, and price competitiveness on the retail side. On the buying side, we need to leverage our position to support the local industries making liquor regulated products, from rum distilleries, to the high end wineries, to nano-breweries and brewpubs, to branches of large mega brewers. At the same time, we can take advantage of the mandate the NSLC enjoys to leverage buying power of imports as much as possible, and to do so in a cooperative manner with other similar buyers.

This should include efforts to have those containers go back to Europe with some NS product in them. Hey, maybe seal skins and meat!