OLIVER – As British Columbia continues to grow its reputation as the craft beer capital of Canada, craft brewers in every corner of the province will now benefit from an additional $10 million per year in economic support thanks to a significant reduction in the mark-up rate for craft beer products.
Effective July 3, 2016, the mark-up rate for small and regional breweries will be reduced by approximately 25 per cent, ensuring craft breweries will have increased financial capacity to grow and expand. These changes further improve mark-up rates for craft beer that were announced last year when government introduced the new wholesale pricing model, and will enable craft breweries to increase production and create jobs, while increasing the availability of high-quality, made-in-B.C. products.
As part of these new changes, craft breweries will also no longer be required to remit the supplier price of their products to the Liquor Distribution Branch, which will improve the companies’ cash flow.
This announcement has a positive impact on Firehall Brewery in Oliver and four craft breweries in Penticton.
“Craft brewers like our own Firehall Brewery, along with consumers, are the main beneficiaries of these changes,” Boundary-Similkameen MLA Linda Larson said. “This announcement supports the growth of the craft beer sector in the South Okanagan and throughout B.C. by giving breweries like Firehall more resources to create jobs, while giving consumers more choices of high-quality, locally made products.”
“It was really nice that Minister of Justice Suzanne Anton came to see us last June, toured the brewery and listened to our immediate concerns about profit margins and the mark up rates that affected them,” said Firehall Brewery’s Sid Ruhland, who co-owns the brewery with his father Jim. “In less than a year we have had resolution brought to this dilemma, and we are very happy about that.”
- The B.C. craft beer industry has seen exponential growth over the past few years, increasing from 54 in 2010 to 118 breweries in 2015, with up to 20 new breweries on the horizon.
- Provincial efforts to cut red tape and increase supports for the craft beer industry have resulted in a 35 per cent increase in the amount of craft beer produced in B.C. over the past year.
- Microbreweries now have opportunities to showcase their products at their local BC Liquor Stores and can access new revenue streams thanks to changes that allow on-site tasting lounges at breweries and beer sales at artisan and farmers’ markets.
- The mark-up rate is the revenue generated by the Province from the sale of liquor products.
- The mark-up rate for craft brewers with a production output of 15,000 hectolitres or less, per year, will be reduced from $0.55 to $0.40 per litre, which will benefit 99 brewers in the province.
- The mark-up rate for craft brewers with a production output of between 15,001 to 350,000 hectolitres will be reduced from between $0.56 to $1.02 per litre to between $0.41 to $0.99 per litre, which will benefit 19 brewers in the province.
- To date, 41 of the 73 recommendations from the Liquor Policy Review have been implemented. Work to continue implementing additional recommendations is ongoing.
- Read the full list of Liquor Policy Review recommendations: gov.bc.ca/local/haveyoursay/Docs/liquor_policy_review_report.pdf