creative rules, all in the name of beer ... can you do the same?

Warship gets creative to address beer shortage
Mar. 4 2007 Canadian Press

OTTAWA -- A Canadian warship pressed into service to help catch drug-runners off the African coast last year did a little dealing of its own, newly disclosed documents show.

An apparent loophole in navy rules allowed HMCS Fredericton to subsidize the cost of beer for the crew by using profits from the normally forbidden sale of duty-free tobacco.

The unusual cross-subsidization occurred during Operation Chabanel, an elaborate RCMP-led sting to seize 22.5 tonnes of hashish off the coast of Angola. The smuggled dope was destined for Montreal.

HMCS Fredericton's report on the 44-day mission shows officials ran a nicotine-and-alcohol operation on the side as they struggled to provide two of a sailor's favourite vices.

The frigate was on fisheries patrol on the Grand Banks last spring when it was unexpectedly diverted to support the RCMP sting operation off Africa.

The secret assignment meant a surprise extension of the voyage by several weeks -- bad news for smokers, who carried only enough cigarettes to get them through to the end of April.

There was a run on cigarettes at the ship's canteen until all that was left was a stock of duty-free smokes, intended to be issued to sailors once back home under strict Canada Customs rules.

The navy's anti-smoking rules forbid canteens from selling cheaper duty-free tobacco so as not to encourage smokers.

To get around the restriction, the canteen operators simply tacked on an extra $33.75 per carton, the equivalent of Canadian tobacco duties.

The move "respect(ed) the spirit of the policy, since it did not promote smoking through lower prices but simply allowed us to provide the same level of service despite the shortage caused by the extension of our deployment,'' says a report obtained under the Access to Information Act.

Ship officials considered turning over that extra cash to Canada Customs but decided against it, since federal regulations were silent on the matter. Instead, the profits were used to subsidize the cost of beer.

"This is a solution that allowed us to adapt to the situation without breaking any regulation,'' says the report.

The standard beer price is $1 a can in the ship's three messes, a price approved by the captain. But as supplies dried up during the tropical voyage, officials were forced to pay almost $2 a can in Ghana to restock.

Hefty cigarette profits of about $2,500 more than offset the loss of $1 for every can of beer sold.

Balancing the books is mandatory because canteens and messes must not draw on taxpayer money, using only so-called non-public funds (NPF), that is, the cash in sailors' pockets. Small profits are permitted, which can be used for barbecues, sports equipment or anything that might help morale.

"While it can be argued that sponsoring alcohol sales is unethical, the sale of beer has been the most important source of revenue,'' says the report.

"And charging twice the price to the crew due to the circumstances surrounding this operation would have gone against the role of the NPF onboard.''

A navy spokesman said the ship's captain, Cmdr. Gilles Couturier, was faced with a tough decision and could not consult with headquarters because of strict secrecy surrounding the operation.

"Under the circumstances, there isn't a hell of a lot of other choices you could have made,'' Cmdr. Jeff Agnew said in an interview.

"It won't change any of our policies. ... This was looked at as a bit of a one-time thing.''

The report says the crew performed well during Operation Chabanel, working three hours to haul the hashish bales aboard from an RCMP-chartered deep-sea vessel.

Once the hash was unloaded in Halifax, the warship's storage area had to be repainted three times to eradicate the pungent odour.