N.S. craft beer industry struggles to rebound after multiple business closures

Microbreweries in N.S. operate under the same regulations as larger brewing companies like Labatt. (File, Pexels)

HALIFAX -- Danny O’Hearn, co-owner of Nine Locks Brewing Company in Nova Scotia, said he’s worries about the brewery’s future as the federal government’s “alcohol escalator,” a two per cent tax hike, goes into effect April 1.

“We think we make great beer, and we have great staff,” O’Hearn said.

Microbreweries in the province also operate under the same regulations as larger brewing companies like Labatt, which means the more beer they sell in 100 litre units, or hectolitres, the more fees they must pay.

“In Nova Scotia, we have the same market as they do,” said O’Hearn. “When we hit 15,000 hectolitres, we are taxed from 40 per cent, up to more than 80 per cent.”

O’Hearn says it makes it more difficult for some craft breweries to make a profit in their home province. “In New Brunswick, we make more money selling our beer than we do in Nova Scotia.”

These concerns come as the beer industry has experienced some growing pains. As many as 10 Nova Scotia microbreweries have shut down since 2024, including the 2 Crows Brewing Company in downtown Halifax, which recently announced it will soon shut its doors for good.

Brewing industry akin to cannabis: analyst

Retail analyst Bruce Winder said it could be a case of the brewing industry growing too fast in a small province.

“I use the Ontario cannabis market as a reference point because it is very similar, it’s a growth industry,” said Winder. “You have this massive expansion, and you have too many players, and then what happened, the government had some fairly tight regulations that limited the margins.”

According to Winder, there are other factors working against independent breweries, not just in Nova Scotia, but across Canada.

“There has been a lot of inflation, raw material costs have gone up, labour cost insurance and cost.”

Dalhousie University management professor Dan Shaw said these obstacles come at a time when the beer market across North America has seen a dip in sales.

“Consumption is down by four per cent in the last year,” said Shaw. “Weed sales have replaced it as a substitute.”

Looking ahead, O’Hearn expects more microbreweries in Nova Scotia to close, but he is certain there is an opportunity for future prosperity for all beer-selling entrepreneurs.

“I still think this a is fun business that can be successful,” he said, and added he hopes both levels of government step in to offer support to ensure the craft beer industry doesn’t continue to shrink in the future.