Has the temporary tax break been driving up booze sales? Yup, says head of NLC

Items like beer are tax free in Canada until Feb. 15, which the Newfoundland and Labrador Liquor Corporation says has brought an added boost to sales ahead of the holidays. (Neil Cochrane/CBC)

Lineups at the liquor store have been more notable since a tax holiday kicked into gear on Saturday morning, with pent-up demand contributing to sales.

The federal government has dropped the goods and services tax on a variety of goods from mid-December to mid-February, and the Newfoundland and Labrador government quickly matched its share of the HST.

Bruce Keating, chief executive officer of the Newfoundland and Labrador Liquor Corporation said the Crown corporation had noticed that sales in the last weeks have dropped as much as 15 per cent, as consumer waited for the tax break to kick in.

"There was that little bit of a buildup, and since the HST holiday has kicked in it's been pretty busy in our stores," Keating told CBC Radio's On The Go.

"Higher than level volumes of traffic going through, for sure."

Stores brought in available staff to help with an anticipated swell in consumer foot traffic.

"December, obviously, is normally a pretty busy month anyway. It's the busiest month that we have each year....But it has been busier than normal."

The two-month break applies to dozens of items including groceries, clothing, toys and alcohol.

Bruce Keating is CEO of the Newfoundland and Labrador Liquor Corporation. (Terry Roberts/CBC)

Keating said the announcement meant changes and preparation had to be made across the supply chain, but the transition to tax free has gone smoothly.

"We've have a team working on this over the last three to four weeks since the announcement's been made and doing a lot of work in order to get ready. Overall, the feedback that we've gotten from our stores since we went live is that it's actually worked pretty smoothly," he said.

"It's not a small amount of work…From our point of view, we had to be ready."

The break applies to many — but not all — items on sale at the NLC.

It means there's no tax on beer and malt beverages. Wine, cider, sake and any fortified wine less than 22.9 per cent alcohol by volume, and spirits, coolers and other pre-mixed beverages less than seven per cent alcohol by volume are also exempt from tax until Feb. 15.

Keating said stronger items, including top sellers like Lamb's Rum and whiskeys, still have HST included in their price.

The NLC is advising consumers to check before-tax and after-tax prices before they buy.

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