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The latest vaping news

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As a category, vaping is in flux, with new rules and regulations rolling out across the country in 2020. C-stores are bearing the brunt of the changes.

Here’s what you need to know, starting with the most recent news item.

  • Ottawa’s vaping ad regulations kick in Friday Read more
  • B.C. introduces new vaping rules that restrict products sold by c-stores Read more
  • Ottawa’s new rules restricting the promotion of vaping products in places young people can access are set to come into effect August 7 Read more
  • Public Health Units have discretion when it comes to enforcing Ontario’s new vape rules targeting sales at c-stores Read more
  • Ontario agrees to delay full enforcement of vaping rules Read more
  • Ottawa delays new vape packaging regulations Read more
  • Ontario sticks with July 1 for new vaping regulations Read more
  • C-stores not a major source for youth vaping Read more
  • Nova Scotia to regulate nicotine levels in e-cigarettes Read more
  • Alberta introduces legislation to regulate vaping Read more
  • Saskatchewan introduces rules to ban vaping products for youth Read more
  • New vaping rules will punish neighbourhood c-stores Read more
  • Ontario convenience and gas stations comply with vaping ad ban Read more
  • CICC supports vaping priorities outlined by Minister of Health mandate Read more

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iWash goes big

Calgary entrepreneur joins forces to create big box vehicle wash 

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Calgary’s new iWash is big. The Barlow Trail multi-service site owned and operated by Kunal Patel opened in June 2019 and today offers the largest commercial vehicle wash bays in the city as well as automatic rollover and wand wash bays for regular vehicles. 

Patel, a savvy businessman who owns other enterprises, including a construction company, saw the need for a wash facility that could accommodate the largest transport trucks. He researched and found the location in Northeast Calgary in 2017. 

Screen Shot 2020-07-29 at 3.06.19 PM“I knew I wanted to own a car wash because Calgary is a great location because of the weather we get here, it’s a good cash flow business, and if designed and operated well has low overhead costs.  I saw a need for an independent wash facility that could handle commercial fleets, RV’s, trailers, cars, et cetera,” says Patel, mentioning that development costs for the 13,000 square foot business stood around $5.5 million. “The Northeast area is under-serviced and I could see there were trucking companies and many warehouses and distribution centers in the area. The location was ideal because of the easy access to two main roadway arteries in Calgary; Deerfoot Trail and Stoney Trail just minutes away from iWash.  I bought the land, designed the site, and built the facility, all internally within my family business.”

Patel sought out simplicity in the process. “I handled the general contracting and architectural scope and then brought knowledgeable engineers and consultants into the project. I decided to go with Mark VII as my car wash supplier because they brought a lot of experience and they offered a one-stop-shop where I didn’t have to deal with multiple vendors. They helped with design, layouts, and took care of the equipment procurement and placement. This made the development process a lot easier,” he says remarking that they closed on the land deal in the spring of 2017 and opened for business spring of 2019.

Here, Mark VII Canada general manager comments that they were able to bring a lot to the table. 

“We supplied the machinery, worked with ancillary manufacturers such as Bay Watch Doors and Exacta payment systems and handled all the chemicals,” says Canadian GM Chris Armena. He reports that they were able to bring their Denver-based engineering department into the mix. “This was very valuable from a planning standpoint. Once we had the drawings from the architect we were able to offer design advice that enabled efficiencies in the building footprint.  Our team has a lot of experience and this made the development easier,” says Armena remarking that although Patel had great knowledge and experience with land development and construction, he was new to the car wash industry and the site required everything. “When Kunal and I started talking the location was just a brownfield!”

Screen Shot 2020-07-29 at 3.07.15 PMOn offer now at iWash are two roll-over systems (one Choice Wash and one Soft-Touch Wash), four self serve wand wash bays and two massive 120-foot truck bays with multiple high-pressure stations inside. Mark VII’s Choice Wash gives customers the choice to choose between touchless, soft-touch or both wash options. There is also a four-unit vacuum area. Everything is 24-hour accessible and the site is entirely cashless and designed for the ultimate in vehicle washing convenience.

“I’m the only independent truck wash operator in the area,” says Patel. “There are two other independent car washes and a chain site located nearby who I compete with but they offer different services and since iWash has the largest truck bays in the area and city, it’s something they don’t have, this allows us to stand out.  We’re located in a new subdivision and are the first in the area so we stand out as a destination wash business offering exceptional quality and customer service.” 

Patel comments that in his truck bay customers often take anywhere from ten to 45 plus minutes to clean off their rigs. “Operators find that dirty trucks are heavier and use more fuel and there are regulations to have trucks kept clean. We are the only place in the area where drivers can get this done. So far even though our business has slowed because of the novel coronavirus we are fortunate and thankful to have been stable with our independent and corporate truck business,” he says.

Even though the 120-foot truck bays are massive, the high-pressure wand wash system itself is compact. For example, Chris Armena reports that the equipment room uses a small 56-inch by 24-inch footprint to house four pumps for the four wands in the truck wash bays. 

In the automatic bays, Mark VII’s Choice Wash allows customers to decide whether they want the ease of a touchless wash where high-pressure spray removes grime without brushes rubbing paint surfaces, or a soft-touch wash with closed-cell, soft foam technology providing scratch and residue-free washes. The Choice Wash machine is somewhat unique in combining both complete soft-touch and complete touchless capabilities in a single rollover system, giving customers the choice that suits their preference.

And, while the efficacy of the system to clean cars and trucks is essential to customer satisfaction, Patel reports that he wanted to use chemicals that had a positive environmental impact. In the roll-over bays, customers get an initial spray of bug wash and pre-soak, then a rinse and soak as well as an undercarriage bath. The site also uses a soapy foam curtain and Shine Tecs to deliver a winning package that brings customers back. Shine Tecs offers polymers that instantly clarify paint finish. When buffed in, micro compounds generate a deeper gloss shine. It gives a hand wax quality, outperforms ceramic coatings and even repairs minor damage to paint surfaces.

“We tend to suggest brushes in combination with easy-on-the-environment chemicals,” says Armena. “This way the chemicals work better with less power. We don’t advise strong pre-soaks and go with more dwell time to achieve the best wash.”

In these challenging times when businesses seek contactless payment from customers, iWash is a step ahead. According to Patel he sought to create a cashless business from the very start. “With cashless payment, there are no coins to collect and security is less of a concern,” he says, mentioning customers can pay via credit and debit as well as ApplePay and GooglePay in addition to pre-loaded iWash loyalty cards. “Its as simple as tap, wash and go.  Also, commercial customers no longer have to worry about drivers having receipts for washes. We track usage and send a monthly invoice. Everything is handled via our Exacta software and menu board system that makes product selection and payment easy.”

The overarching idea has been to create a vehicle wash business that is simple, effective and efficient, all while offering the highest wash quality and customer satisfaction. Consider that iWash uses only one employee to manage the entire site. They clean the bays, perform maintenance and handle any customer requests, such as offer receipts to those who need them. “If needed, I can watch the entire operation via remote monitoring,” says Patel. “We have good camera placement and I can access operation systems such as the overhead doors, or lock the office if there is a problem after staff leave.”

Concluding, Patel remarks that while iWash is big the process to get it underway was not unwieldy. “It was a team effort, everyone working together to design, build and now operate a fantastic and huge wash site with the biggest truck bays in the city!”

 

 

 


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Staying power

At 181, Nova Scotia’s Frieze and Roy is celebrated as Canada’s oldest general store

Screen Shot 2020-07-27 at 3.52.06 PMScreen Shot 2020-07-27 at 3.54.09 PMEverybody in the community of Maitland, NS, roughly 90 kilometres from Halifax, knows that you can get potato chips, lottery tickets, and even maple syrup at Frieze and Roy. While they enjoy the convenience of shopping, and dining, at their local c-store and adjoining cafe, they also appreciate the store’s biggest selling feature: its commitment to community.

Indeed, that is the reason co-owner Troy Robertson purchased the store eight years ago. The decision to buy, he says, was less about business and more about what the store meant to the town of approximately 8,200 people. “It’s the heart of the community. It’s where people drop in. It’s where people leave messages for one another.” 

People in Maitland have been doing all that—and more—at Frieze and Roy for 181 years. For much of the 1800s, it was a focal point for the shipbuilding trade. As that century was coming to a close, the shop became more of a general store offering customers everything from farm tools to fine china. Today, Frieze and Roy is recognized as Canada’s oldest general store.

That rich history contributes to the bottom line today. The store has been featured in articles and on television and continues to draw media attention. “People are interested in stuff that has been around for a long time,” says Robertson. 

To meet tourist’s needs, the store offers a range of souvenirs. In particular, notes Robertson, “they want something with the word ‘Maitland’ or ‘Frieze and Roy, Canada’s oldest general store’ on it. If people are flying, they like a gift that is smaller than 12 inches.”

Meeting the very specific needs of customers is central to Robertson’s business philosophy. “I watch what people buy. I ask them what they want. I tailor my inventory to my customers,” he says.  

That includes offering them the option of purchasing liquor. Frieze and Roy is one of the select convenience stores licensed by the government of Nova Scotia to sell wine, beer and spirits: 9% of sales are alcohol, notes Robertson. “You have to bring something in to draw people in.” 

Screen Shot 2020-07-27 at 3.54.37 PMIn addition to ensuring customers find what they need, and what they want, Robertson has worked to make the store a gathering place. That work started when he purchased the admittedly deteriorating building and essentially gutted the interior, creating a c-store on one side and the Mudslide Cafe on the other. In the middle (a shared buffer between the two businesses) is a gift shop that supports both operations. 

“The goal was to create a feeling that people are going to an old place that is comfortable,” says Robertson. “We are not Shoppers Drug Mart. We do not want to look or feel like Shoppers Drug Mart.”

Screen Shot 2020-07-27 at 3.55.02 PMMany locals prefer to shop local, he adds. “The lines are smaller. It’s faster. It’s their community. People want to go someplace that doesn’t feel like a mall.” 

Nothing could feel less cookie-cutter than the town of Maitland itself. Only an hour’s drive from the province’s capital city, the town sits on the edge of the Cobequid Bay, an inlet off the Bay of Fundy, which boasts the world’s highest tides. “There are few places like this left,” says Robertson.

The same could be said of the Frieze and Roy general store.

  

Frieze and Roy’s tips for a successful store

Screen Shot 2020-07-27 at 3.53.57 PMImprint. Running a c-store is a lifestyle and a lifestyle choice, says Troy Robertson. It’s also hard work, he notes. “You can’t put in your 40 hours and go home.”

Inhale. Building a business takes time, says Robertson. “You need patience and flexibility to grow the business.”

Increase. C-stores can expand their reach and improve the bottom line through strategic partnerships with suppliers –and with each other, says Robertson, who would like to see the sector share information and purchase collectively. “There really is power in numbers.” 

 


Manitoba government offers more subsidies for businesses hit by COVID-19

The Manitoba government is extending and expanding a wage-subsidy program to spur job creation during the COVID-19 pandemic.

Until now, the Back To Work program paid businesses who hired or brought back staff up to $5,000 per employee, to a maximum of five workers, through to the end of August.

Premier Brian Pallister says the program will be extended until the end of October, and the funds will be available for up to 10 workers at each business.

The program is also being offered for the first time to charities and non-profits as well.

Pallister says the money should help encourage employers to hire more people.

Statistics Canada reported last week that Manitoba has recorded the second-highest rebound in employment levels since the pandemic began, behind only New Brunswick.


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Business model helps Couche-Tard navigate COVID-19

LAVAL, Quebec — Alimentation Couche-Tard Inc., parent company of Circle K, reported a relatively strong fourth quarter for its 2020 fiscal year despite grappling with the challenges of the COVID-19 pandemic.

Brian Hannasch

Brian Hannasch

“Our agile, decentralized model, as well as the advancements we made in operational excellence this past year, helped us to face the unprecedented challenges of COVID-19 and I’m proud to say, I think we’ve emerged from this historic year a better and stronger company, both financially and culturally,” president and CEO Brian Hannasch stated during the company’s Q4 earnings call on June 30.

“We ended the fourth quarter with strong top-line trends, including 12 weeks of positive traffic, before we endured a significant decline in traffic and fuel volumes with the pandemic stay-at-home orders implemented across our global footprint,” he added.

Looking at the fourth-quarter numbers, same-store merchandise revenue decreased by 0.5 percent in the United States and 6.5 percent in Europe, while increasing 4.7 percent in Canada compared to the same quarter last year.

From a fuels perspective, volumes declined sharply during the first weeks following the stay-at-home orders. For the fourth quarter overall, same-store road transportation fuel volumes decreased 18.3 percent in the U.S., 13.4 percent in Europe, and 23.5 percent in Canada compared to the same quarter a year ago. The sharp decline in volumes was mitigated by higher fuel margins, which benefited from the rapid and steep declining crude prices during the quarter, as well as lower competitive activity at retail.

“Through the implementation of restricted social measures in the various geographies in which we operate, the COVID-19 pandemic had a meaningful impact on our financial results, mostly driven by declining traffic across our entire network,” Hannasch explained.

The retailer saw its convenience store customers change their shopping behaviors, moving to larger basket sizes with more impulse and emergency items, and take-home packages — which partially offset the negative impact of lower traffic.

“We innovated quickly to meet the desire for less touchpoints, as well as different SKUs and package sizes,” he said. “We are placing the health and safety of our employees and customers at the forefront of our decision-making, and we are committed to being part of the solution in our communities where we work and live. I am truly grateful for the courage, care and commitment that our employees are showing toward each other, toward our customers, and the business.”

BEING PART OF THE SOLUTION

As the health crisis spread across countries and regions, Couche-Tard stepped in to “become part of the solution” in its communities, according to the chief executive.

For example, the retailer launched a free coffee, tea or Polar Pop offer for front-line and first-responder workers beginning in March. In addition, it contributed more than 40 million meals to Feeding America in the United States and beginning in June, the company pledged 5 million meals to food banks in Canada. In Europe, Couche-Tard delivered goods to the elderly and impaired, as well as care packages to hospitals and other facilities.

Couche-Tard also worked to innovate rapidly to meet the changing needs of its customers.

“We rapidly developed a click-and-collect model both in Europe and in North America for curbside delivery, and we’ve expanded home delivery to third parties with more than 1,000 sites now having home-delivery capability globally,” Hannasch explained.

The new innovations also included mobile payment options.

“The urgency of the pandemic brought out the best in our company’s ability to adapt the new community of solutions and technology, adjusting to the rapidly changing retail landscape,” he said.

IN-STORE OBSERVATIONS

One of the biggest adaptions for any convenience store operator during the past few months has been the suspension of self-serve items, and Couche-Tard’s locations were no different. Self-serve items were removed in many parts of its network — more prevalent in the U.S. since the retailer does not do a lot of self-serve in Europe.

Despite the change being mandatory in the affected areas, Hannasch observed: “I think it was resounding that the customers preferred the old way; they preferred the self-serve. We saw sales decline in those stores more than we did in stores where self-serve remained in place.”

With the U.S. in the relatively early stages of reopening, the chief executive said it is too early to tell what COVID-19 changes will stick around.

“I think it’s premature to say what the future will bring on, in terms of permanent changes in consumer habits. That said, the grab-and-go, low-touch nature of our ‘Fresh Food Fast’ program could be beneficial to us where we’re delivering quality products, good taste — great taste, actually — that doesn’t need to be handled by our staff in-store,” he said.

POST COVID-19

So far in the first quarter of its 2021 fiscal year, Couche-Tard is seeing a strong increase in merchandise sales as traffic gradually improves week to week.

“Many factors appear to be contributing here but, more notably, we continue to see the move to larger baskets that I pointed out earlier, and see the customer adjusting their shopping habits,” Hannasch pointed out.

“We think there’s some preference for the ease and convenience of our locations, and our channel over some other channels during this COVID period and COVID recovery,” he continued. “We’ve also gained new customers as we stayed open throughout the pandemic to meet their needs for emergency products, impulse buys and grocery items, which became increasingly popular, and we’re seeing some stickiness.”

On the fuels side, the retailer is seeing fuel volumes gradually return, and fuel margins have remained healthy through May and June.

“In recent days, there’s been a resurgence of COVID in parts of our U.S. network, and it is unclear how the virus in the global economy will develop in the weeks and months ahead,” Hannasch said. “So as such, we will continue to adhere to our customary financial discipline and maintain a robust contingency planning.”

As of April 26, Laval-based Couche-Tard’s network comprised 9,414 c-stores throughout North America, including 8,221 stores with road transportation fuel. Its North American network consists of 18 business units, including 14 in the United States covering 48 states and four in Canada covering all 10 provinces.

In Europe, Couche-Tard operates a retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of April 26, its European network comprised 2,710 stores, the majority of which offer road transportation fuel and convenience products while the others are unmanned automated fuel stations that only offer road transportation fuel.

In addition, under licensing agreements, close to 2,350 stores are operated under the Circle K banner in 15 other countries and territories, which brings the worldwide total network to close to 14,500 stores.

Originally posted at Convenience Store News. 


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OCSA partners with Paygos for e-commerce platform

The Ontario Convenience Stores Association is partnering with

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Paygos to create a service that will enable independent convenience stores to order merchandise from a centralized cloud-based platform.

Developed and managed by Paygos, the e-commerce platform will feature a wide range of CPG products, as well as automotive items and tobacco (the goal is to add beer when legislation is passed for convenience store sales).

“Our solution relies on existing distribution partners to fulfill all orders,” Paygos CEO Hesham Shafie explained in a release.

The service will be free to use for convenience stores in Ontario: The OCSA represents more than 6,000 independent retailers and regional chains in the province.

“For many years the convenience channel has searched for a business partner that can coordinate programs and services for the thousands of family-run convenience stores in Ontario,” said OCSA president and CEO Dave Bryans. “In a changing retail environment, working together with manufacturers and Paygos will allow independent store owners the same opportunities as major retailers in the province.”


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Introducing the 2020 Star Women in Convenience!

Although the 23 women being honoured this year as Star Women come from diverse backgrounds and work in different roles and sectors across the country, they share a singular commitment: to customers, to colleagues and to community.

Doing a good job requires looking closely at the bottom line and identifying ways to improve efficiency and profitability. For the 2020 Star Women, doing a good job is simply not good enough. It’s about excellence—and that requires focusing on customer needs, innovating and building winning teams. Indeed, for several of the honorees, their ultimate career achievement is not about themselves at all: It’s about mentoring the next generation of Star Women.

Another aspect common to all 2020 honorees is they thrive on helping to address the challenges of a sector that is constantly adapting to change and stepping up to help out. Quite simply, they love what they do.

CSNC launched Star Women in Convenience in 2018 and the award continues to gain momentum and prestige. We received a record-number of nominations from across the country: Thank you to all who submitted nominations! This year, we have 23 winners, up from 17 in 2019 and 11 in 2018.

 

Jillian Anderson

National key account manager: PepsiCo Canada

Grace Caputo

Vice-president and general manager of Now Prepay: Payment Source

Hélène Drolet

Vice-president, operations, Western Canada Division: Circle K

Jessica Friesen

Owner-operator: Gales Gas Bars Ltd.

Leslie Gordon

Category portfolio manager convenience retail: Suncor Energy/Petro-Canada

Kim Green

Owner and CEO: Kay’s Wholesale Ltd.

Lesley Harany

Industry volunteer: Retired – JTI-Macdonald Corp.

Mary Kelly

President and CEO: Gateway Newstands

Fiona Kreschuk

Site operator: Petro-Canada

Mélissa Lessard

Head of marketing and merchandising, Canada: Alimentation Couche-Tard

Elizabeth Loschiavo

Corporate account manager: Core-Mark International

Jasmine MacDonnell

Manager, government & corporate affairs: National Smokeless Tobacco Company

Melani Melnyk

Shopper marketing manager: Mondelēz Canada

Donna Montminy

Director member relations, administration & events: Ontario Convenience Stores Association (OCSA)

Robbie Mulder

District manager: Little Short Stop Stores

Olga Pigeon

Director of marketing and strategy: BG Fuels

Robin Poulain

Director of sales – impulse and alternative channels: Kind Healthy Snacks

Paula Schaeffer

Retail sales manager: Pratts Wholesale

Marie-Hélène Senécal

Director, Eastern Canada, retail: InComm

Laurie Smith

Marketing and communications lead, Canada: 7-Eleven Canada Inc.

Hayley-Ann Swartz

Manager, non-fuels products and services: Husky Energy

Audrey Sylvain

National category manager: Parkland Corporation

Tiffany Taylor

Category portfolio manager: Suncor Energy/Petro-Canada

Congratulations to all the winners!


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For photos and full profiles of the 2020 winners

visit the Star Women in Convenience website

or

Check out the July/August issue of Convenience Store News Canada


Judge orders Dakota Access pipeline shut down pending review

A federal judge on Monday ordered the Dakota Access pipeline shut down pending a more thorough environmental review, handing a victory to the Standing Rock Sioux Tribe three years after the pipeline first began carrying oil following months of protests.

In a 24-page order, U.S. District Judge James Boasberg wrote that he was “mindful of the disruption” that shutting down the pipeline would cause, but that it must be done within 30 days. The order comes after Boesberg said in April that a more extensive review was necessary than what the U.S. Army Corps of Engineers had already conducted and that he would consider whether the pipeline would have to be shuttered during the new assessment.

The Court does not reach its decision with blithe disregard for the lives it will affect,” Boasberg wrote Monday.

“Yet, given the seriousness of the Corps’ NEPA (National Environmental Policy Act) error, the impossibility of a simple fix, the fact that Dakota Access did assume much of its economic risk knowingly, and the potential harm each day the pipeline operates, the Court is forced to conclude that the flow of oil must cease,” he added.

The pipeline was the subject of months of protests in 2016 and 2017, sometimes violent, during its construction near the Standing Rock Sioux Reservation that straddles the North Dakota-South Dakota border. The tribe pressed litigation against the pipeline even after it began carrying oil from North Dakota across South Dakota and Iowa and to a shipping point in Illinois in June 2017.

Tribal Chairman Mike Faith called it a historic day for the Standing Rock Sioux and for those who have protested against the $3.8 billion, 1,172-mile (1,886 kilometre) pipeline that crosses beneath the Missouri River, just north of the reservation. The tribe draws its water from the river and fears pollution.

“This pipeline should have never been built here. We told them that from the beginning,” Faith said in a statement.

Texas-based Energy Transfer has insisted the pipeline it owns would be safe. It didn’t immediately respond to a message seeking comment on Boasberg’s ruling.

Jan Hasselman, an attorney for the tribe, praised the court’s ruling, while noting he expects an appeal.

“It doesn’t make any sense to allow the pipeline to continue operating when you’re studying whether it’s safe to operate,” he said.

Ron Ness, president of the North Dakota Petroleum Council, called the ruling “shocking” and noted that the pipeline is moving 570,000 barrels of Bakken oil a day. He also expects an appeal.

“I think there’s a lot of questions about the authority of this liberal district court judge to make such a significant ruling,” Ness said of Boasberg, who was appointed by former President Barack Obama.

Energy Transfer last year proposed increasing the pipeline’s capacity to as much as 1.1 million barrels to meet growing demand for oil from North Dakota, without the need for additional pipelines or rail shipments.

Before the coronavirus pandemic devastated the U.S. oil industry, daily oil production in North Dakota – the nation’s No. 2 oil producer behind Texas – was at a near-record 1.45 million barrels daily. The state’s output slipped to below 1 million barrels daily in May amid low energy prices and sparse demand.

Permits for the project were originally rejected by the Obama administration, and the Army Corps of Engineers prepared to conduct a full environmental review. In February 2017, shortly after President Donald Trump took office, the Corps scrapped the review and granted permits, concluding that running the pipeline under the Missouri River posed no significant environmental issues.

The Corps said that opinion was validated after an additional year of review, as ordered by Boasberg in 2017.

Boasberg had ruled then that the Corps “largely complied” with environmental law when permitting the pipeline but ordered more review because he said the agency did not adequately consider how an oil spill under the Missouri River might affect the Standing Rock Sioux’s fishing and hunting rights, or whether it might disproportionately affect the tribal community.

 


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Happy Canada Day!

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Canada’s convenience industry plays a significant role in helping the country celebrate Canada Day.

From supplying fireworks, to sparklers, snacks, beverages, frozen treats, barbecue essentials and more, thank you for working hard every day so people coast to coast to coast can enjoy our national holiday.

All the best to you, your team and your family!

HAPPY CANADA DAY

From,

The CSNC & OCTANE team


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Nova Scotia Liquor Corporation needs better plan for local industry, AG says

UnknownNova Scotia’s Crown liquor corporation does not have an adequate strategic plan for supporting the province’s growing alcohol industry, a new report by the province’s auditor general finds.

In his report released Tuesday, Michael Pickup says the Nova Scotia Liquor Corporation’s five-year plan for the industry lacks detail and accountability measures, while oversight is described as “poor.”

Pickup says it’s a major problem given that the number of local alcohol manufacturers has more than doubled over the last five years – from 64 to 141 – with the largest increase being the number of breweries, which have grown from 31 to 86.

He also notes that sales of local alcohol products through the corporation have risen significantly, from $16.5 million in 2015 to $45.3 million in 2019.

“While local product sales increased during the first four years of the plan, there is no clear link between the strategy and this growth,” the report states. “An appropriate strategic plan would align with NSLC’s mandate and include clear goals and objectives for the local industry, including action plans with measurable targets to determine success.”

The auditor’s report says the only performance measure included in the current plan is growth in local product sales through the corporation’s retail network, although there are no specific targets.

Pickup also warns there has been no risk analysis of the corporation’s mark-up rates for local products in order to flag potential risks and unintended consequences – including whether its pricing is in compliance with various trade agreements.

They include the Canadian Free Trade Agreement and the General Agreement on Trade and Tariffs, which have both seen recent or ongoing challenges to local pricing structures across Canada. Pickup also noted that Nova Scotia is awaiting a decision by the World Trade Organization on its mark-up pricing for locally produced wine.

“A proper risk analysis would identify potential risks … which is ultimately in the best interest of manufacturers in the long term,” says the report.

As well, the report assesses the NSLC’s compliance program to measure whether employees were following its proof-of-age policy, which requires asking for identification from anyone under 30.

Corporate stores registered a 12% fail rate and agency stores failed 19% of the time, while privately-owned business failed to ask 37% of the time and breweries failed 63% of the time, the report finds.

The results were from internal compliance checks conducted from April 1, 2017, to March 31, 2019.

Pickup also found that the NSLC is not completing responsible retail training for new employees within the first 30 days of employment, as required.

He said a test of 30 retail employees found 20 did not complete the training within 30 days of starting work. Four never completed the training, which covers areas such as age verification requirements, dealing with minors, and dealing with intoxicated customers.

Pickup said to call the compliance results disappointing would be “an understatement.”

“To see the age verification compliance program not working as it should work is very concerning,” Pickup said in an interview. “On the one hand the corporation is there to exist as a business enterprise but they also have a lot of corporate social responsibility.”

Pickup pointed out that over the two years covered by the audit, a corporate social responsibility committee put in place by the NSLC’s board of directors only met once.

NSLC spokeswoman Beverley Ware said the corporation would act on all 11 recommendations in the report within the next 12 to 18 months, including one calling on the corporation to clarify its role and to set measurable goals in supporting local brewers and distillers.

“There’s been exponential growth in the local industry in recent years and we just haven’t kept pace with it on the regulatory side of our business and on the policy side,” said Ware.

Ware also said the corporation would work to better document identification oversight, and has already put in place measures to ensure new hires get their training in a timely manner.

Meanwhile, the report highlighted that a board decision made in 2014 that could have saved the corporation $4.5 million had not been acted on.

It would have seen rural-owned stores turned over to private owners that would have run them as agency stores. Pickup said the plan appears to have stalled when it was taken to the provincial government and cabinet for approval.

He said it’s part of the reason his office is doing a governance audit of the corporation that will be released at a later date.