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NB Liquor Needs More Transparency: Verifier

A customer shops at the NB Liquor store attached to the old Fredericton train station in Fredericton, N.B., Friday, June 16, 2017. New Brunswick’s auditor general says the liquor corporation owned by the State of the Province does not effectively plan or participate in the development of the alcohol industry as required by law. THE CANADIAN PRESS/Stephen MacGillivray

FREDERICTON – The crown corporation that operates New Brunswick’s liquor stores lacks accountability and transparency and does not properly document its operations, the province’s auditor general said Thursday.

NB Liquor has no plan or strategy to grow the province’s liquor industry beyond the general objective outlined in the law, Paul Martin told a legislative committee after the release of his report. The company, he added, “did not have any targets against which to regularly monitor or evaluate performance.”

A computer program used by the company did not keep historical data; instead, new data would overwrite previous entries, Martin said.

“The lack of historical data is concerning because without it, (NB Liquor) has no documented justification to defend its business decisions. This is a serious concern for a society that is publicly accountable,” he said.

“We found that NB Liquor usually signed off on key decisions verbally, usually through undocumented meetings and conversations. Consequently, there was no documentation to support many key decisions in the process we examined.

The company, Martin said, has made special deals with some growers that have resulted in lower profit margins than the margins it makes on its deal with other growers. Additionally, NB Liquor lacks the required documentation to substantiate its special offers, which it says leaves the company with little to no defense against allegations of favoritism and bias.

“We found four instances where local growers received a special offer in terms of payment for their product that exceeded the amounts paid to other growers in the province,” Martin later told reporters. “There is absolutely a problem with treating people equally in this process.”

Green Party member Kevin Arseneau said the unequal treatment of producers is concerning.

“It’s concerning that there was preferential treatment… and then not knowing why – this is all vital information, especially coming from a state-owned company,” he said.

Martin issued 19 recommendations, including increased transparency and accountability.

In a statement, NB Liquor said it has worked with the auditor general for much of the past year to provide the necessary information.

“While the report contains valuable recommendations, much of this work was already underway,” spokeswoman Emilie Dow said. “Over the past three years, we’ve come a long way in following industry best practices and growing our programs and services, offering diverse retail channels across the network and supporting our growing local alcohol production sector.”

She said six of the 19 recommendations have already been implemented, adding that all will be addressed over the next two fiscal years.

NB Liquor is a major revenue generator for the province, contributing $1.7 billion over a 10-year period ending March 2021.

This report from The Canadian Press was first published on June 23, 2022.