Where do I begin? I am a small business owner from Halifax, Nova Scotia. I own a Wine Kitz franchise. I sell wine kits and all the equipment one would need to make wine. Five other provinces in Canada allow customers to make their wine on-site as opposed to in their home. I thought that this would be an obvious extension to my business. We as an industry lobbied the Government of Nova Scotia to update the Liquor Control Act to facilitate "ferment on premise", "u-brew", or "u-vint" as it is commonly called. The government resisted at every turn. No one would give a straight answer, let alone an logical one. After many months of telling potential customers that they could not make wine in my store as they had done when they lived in another province, I decided to test the waters and offer the service. My intent was to get the government's attention and hopefully engage them in a meaningful discussion on the topic. Sadly, my nearest competitor wrote to the Nova Scotia Liquor Corporation (NSLC) complaining that I had an unfair advantage over him because I was offering u-vint services. I suppose he could have risen to the challenge and competed with me rather than whining to the government. The NSLC turned the matter over to the police. After an undercover sting operation I was charged with three violations of the Liquor Control Act. This led to a lengthy and expensive court battle. During the entire time that the case was before the court, this provided the elected officials with a convenient excuse not to meet with me to discuss the business model of u-vint. We will get back to government inaction later.
What is u-vint.
It is simply a service that allows a customer (age of majority) to make their wine in-store. The customer purchases a wine kit and pays an additional winery fee for rental of space and equipment. The kit belongs to the customer, not the operator of the shop. The customer mixes the concentrate with water and adds the yeast to initiate the process of fermentation. Without the yeast the grape juice would spoil. The operator stores the fermenting juice on behalf of the customer. When the fermentation is complete, the customer returns to bottle and cork their wine. Canada Revenue Agency demands that the customer start and finish the process. Bottling and corking is deemed to be manufacturing by Revenue Canada hence, that is why the customer must do it. If an operator is found to violate this rule they are subject to substantial fines.
What are the pros and cons of u-vint?
U-vint is a revenue stream for the operator. The operator makes more money and pays more in corporate tax at the end of the fiscal year. There is HST on the winery fee as well as other items such as bottles, corks, and labels, creating income for the government. Lastly, it creates jobs, which means disposable income and income tax.
Without u-vint, there is no additional revenue for the operator, no HST for the government and no jobs.
It seems pretty obvious that it is either a win, win, win, or lose, lose lose. Why the government won't allow u-vint is beyond comprehension.
The outcome of the trial was that I was found not guilty of "manufacture and keep liquor" or "use of a premises for the storage of liquor", but was found guilty of "keeping liquor for sale". The bases of the guilty verdict was that the judge deemed a wine kit to be liquor. I feel that the judge erred in this ruling. A wine kit is varietal grape concentrate and contains no alcohol so how can it be liquor?
Now that a wine kit was deemed, albeit erroneously, to be liquor, the government would have to change the definition of liquor so we (wine kit vendors) could sell our wares as we have done for forty years. The solution put forth by the NSLC was that they would issue licenses to vendors to sell wine kits.
Confused yet? This now creates a quandary. Why is the NSLC issuing vendors licenses to private sector retailers? The NSLC is a Crown Corporation tasked with retailing alcohol in Nova Scotia. They are a retailer just as I am. It is not their domain to dictate to me or any other retailer what we sell. Secondly, how can they be retailers and regulators? It seems to me that there is an obvious conflict of interest. It must be nice to act as judge and jury and the complainant. My life would be a picnic if I could regulate my competition.
Earlier I commented on the incomprehensibility of why government not allow u-vint, well the truth is that the NSLC tells the Government what to do. Sadly the fate of private sector small businesses is in the hands of a Crown Corporation that quite honestly doesn't care. These people are not elected yet they make rules and regulation to suit their needs. The fact that the elected officials won't deal with the issue is shameful. The basis of democracy is that the elected officials heed the will of the people. Government has a responsibility to protect the people they serve by restricting activities that are dangerous, unethical, or in violation of basic decency. U-vint is none of these things; it is neither harmful to the public, immoral or indecent. It may contravene a grossly outdated Liquor Control Act, but it is not criminal and operators who choose to offer u-vint should not be treated like criminals.
The Government of Nova Scotia wastes its time and resources, namely your tax dollars, to fight small business. Minister Steele and the NSLC don't believe that u-vint is good for the province. That flies in the face of what is happening across Canada. U-vint has been lawful in Ontario and BC for many years without those provinces suffering moral and financial decay. In fact, in the last two years, Saskatchewan, New Brunswick and Prince Edward Island have all made u-vint lawful. That's right, PEI and NB have evolved and moved forward but not Nova Scotia. Why not in Nova Scotia? That my friends is the million dollar question. Why does the government resist change? Why is the NSLC tasked with making these decisions? The NSLC should stick to retailing as is their mission and allow a free market society to act as such.
If you would like to voice your support of u-vint, feel free to visit www.uvintns.ca, fill out the form and send a letter to the Premier with the click of a mouse. Minister Graham Steele may be emailed directly at finamin@gov.ns.ca. In either case you should receive a response from the Government.
Thanks for taking the time to read this post. I am not giving up on this issue until it is resolved to my satisfaction. Many people think that I am wasting my time and that the Government will never change. I know that if I give up, the Government and the NSLC win, nothing changes and Nova Scotia remains stagnant.
The new motto for Nova Scotia should be; "When it comes to being last, We're first!"
