Newfoundland and Labrador Liquor Corporation (NLC) Announces First Quarter (Q1) Performance

    29 August 2023

NLC today released its financial and operational results for the first quarter of fiscal year 2024, ended July 1, 2023. All information is unaudited.

NLC reported net earnings for the quarter of $47.6 million, an increase of $0.2 million, or 0.5%, compared with Q1 of fiscal year 2023. The dividend paid by NLC to the Government of Newfoundland and Labrador totalled $48.0 million for the quarter, $5.0 million lower than Q1 of the prior year. The dividend is lower in Q1 of this year due to the timing of payments.

On June 27, 2023, NLC’s 2023-2026 Business Plan was tabled and approved by the Government of Newfoundland and Labrador. This document will serve as a roadmap to how the Corporation will fulfill its mandate while providing customer service excellence, being a leader in corporate social responsibility, and delivering returns to the people of Newfoundland and Labrador.

“We’re happy with our accomplishments in the first quarter,” said Bruce Keating, NLC President and CEO. “Despite more challenging marketing conditions for beverage alcohol that mirrors what we’re seeing in other jurisdictions, we were able to deliver a small increase in net earnings. As well, we saw double-digit growth in cannabis sales, as we work to disrupt the illicit market, thanks in part to the approval of cannabis vape products late last year as well as strong regulatory insight. As we move forward with our 2023-2026 Business Plan as our guide, we’re committed to meeting and exceeding expectations of the province and its people.”

Beverage Alcohol

Beverage alcohol sales for Q1 were $71.0 million, down 1.6%. All product categories were lower than Q1 2023. The category with the largest decline was ready-to-drink (RTD) which decreased 5.4%.

Sales through NLC’s corporate stores were down 1.7% compared to Q1 of the prior year, while Liquor Express outlets across the Province experienced a decrease of 1.4% compared with Q1 of the prior year. Sales through licensees were 0.4% lower than the prior year.

In addition to direct sales, NLC earns commissions on the sale of beer through Brewers’ Agents. These commissions for the quarter totalled $16.4 million, higher than Q1 2023 by 6.3%.

During Q1, NLC renovated five corporate stores including Grand Falls-Windsor, Port Aux Basques, and Stephenville, as well as Pearlgate Plaza and 50 Old Placentia Road in Mount Pearl. Upgrades included new flooring, lighting, digital monitors, and enhanced store layout and design. NLC’s investment in an enhanced customer experience also included the Phase 1 rollout of a Graff Retail sales training program, Ready to Serve, designed specifically for the wine and liquor industry.

Cannabis NL

Cannabis sales through licensed cannabis retailers (LCRs) totalled $19.3 million in Q1, an increase of 25.7% over Q1 of the prior year. Total retail cannabis sales in Q1 including online sales were $19.4 million.

Category growth was driven by vape, ground/milled and whole flower products. Cannabis vape products, which launched in Q3 last year sold $2.1M in Q1 this year and represented 11% share of sales.

Cannabis NL was also pleased to welcome four new LCRs in the first quarter of fiscal year 2024, in the towns of Clarenville, Harbour Breton, St. Anthony and Twillingate. As of the end of Q1 there were 43 LCRs in Newfoundland and Labrador compared to 40 one year prior.

Rock Spirits

Rock Spirits produced 77,000 cases of spirits and 5,500 cases of RTDs during Q1, a decrease of 4.9% in spirits and a decrease of 46.6% in RTDs over the same period the previous year. This change compared to the previous year was driven primarily by timing of production. In Q1, Rock Spirits launched a new recipe for Screech Rum, as well as added Screech Pina Colada, a new RTD to its own portfolio. Rock Spirits will continue to seek out local and international partnership opportunities.

Regulatory Compliance and Enforcement

NLC conducted 929 inspections on liquor establishments and cannabis retailers in Q1, as it continues to work closely with the licensee community. This represents a 7% increase compared with the number of inspections conducted during the same period in fiscal year 2023. NLC’s Regulatory Enforcement team did not seize any illicit cannabis product during the period, however, they continue to conduct investigations related to illegal activity. The lack of seizures may also be an encouraging sign that the legal sale of cannabis by licensed retailers is successfully penetrating the illicit market. NLC is committed to providing systematic and thorough regulatory oversight for beverage alcohol and cannabis that helps ensure public safety and provides a safe and secure supply of cannabis to the Province.

Corporate Responsibility

NLC is committed to placing Corporate Social Responsibility at the forefront of everything it does. In Q1, NLC invested in the necessary resources in order to develop a comprehensive plan within the current fiscal and throughout the next three-year business cycle, with an emphasis on strengthening the industry in areas including social responsibility, community giving, sustainability, workplace culture, and governance.

In Q1, a staff representative participated in Spirits Canada’s first Annual Collaboration on Sustainability conference. NLC also continued to promote its Don’t Drink and Ride awareness campaign via radio and social media, and will seek out strategic partnerships with law enforcement and the broader community to ensure its messages related to responsible consumption are delivered to the public.

NLC continues to build on a culture that embraces diversity, inclusion, and belonging. Throughout Q1, NLC partnered with First Light NL to deliver Indigenous Cultural Diversity Training to NLC’s Diversity, Inclusion, and Belonging Committee, the executive team, and over 75 managers from all areas of the corporation. In an effort to help promote autism understanding, embrace neurodiversity, and support those with sensory sensitivities, NLC staff participated in Be Cool for Autism. As well, a sensory-friendly shopping hour was rolled out in NLC corporate stores. NLC continued to support PRIDE month by raising the Progress Pride flag at its head office, as well as through in-store and online messaging, and have committed to supporting Quadrangle NL and their outreach programs for 2SLGBTQIA+ community members from across the Province.

Throughout Q1, NLC implemented various initiatives to ensure the continued health and well-being of its employees. NLC celebrated Health and Safety Week from May 1-6 by recognizing 34 Safety and Health Champions within the corporation, and providing general tips on health and safety measures. In recognizing Mental Health Week from May 1-7, 21 NLC employees received Mental Health First Aid training. NLC also celebrated Public Service Week in June to recognize staff for their contributions in all areas of the business this past year.

Newfoundland and Labrador Liquor Corporation (NLC) Quarterly and Year-to-Date Results

*Note – Total Retail Cannabis Sales includes all sales of cannabis in Newfoundland and Labrador, whether distributed by NLC or directly by local producers.

About NLC

NLC is a Crown Corporation of the Government of Newfoundland and Labrador with responsibility through the Liquor Corporation Act, the Liquor Control Act, and the Cannabis Control Act for the importation, sale, distribution and management of beverage alcohol and cannabis, and for the delivery of programs that promote safe, responsible consumption of alcohol and cannabis.

NLC is one of the largest retailers in the Province. Through 29 corporate retail locations, over 140 agency stores, more than 600 Brewer’s Agent outlets, and over 1,400 restaurants, lounges and other licensees, along with private order services, NLC offers over 4,000 products per year to consumers and its retail partners from more than 20 countries. It also regulates and distributes to over 40 licensed cannabis retailers across the Province, and offers customers a secure, legal online environment for cannabis purchases via NLC operates a 77,000 square foot distribution centre, as well as a manufacturing operation, Rock Spirits. The facility, which runs world-class blending, bottling and canning operations, ships to more than 30 countries around the world and has been in operation for over 65 years.

NLC operates with the expectation that it will generate revenue for the Government of Newfoundland and Labrador, with 100% of its profits reinvested in the Province to fund key public services. NLC aspires to build trust in everything it does - with customers, employees, retailers, commercial partners and communities, along with Government, to ensure a stronger Newfoundland and Labrador.

Media contacts:
Tara Haley
Corporate Responsibility and Communications Manager
Newfoundland Labrador Liquor Corporation
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