KELOWNA – 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 a 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 25% per litre, meaning that 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.
The Province will also taking action to improve cash flow for craft brewers, meaning they will have more money for important business operations like funding their payroll, paying their rent and investing in new equipment. Craft breweries will no longer be required to remit the supplier price of their products to the Liquor Distribution Branch.
This announcement positively affects five microbreweries in Kelowna— Big Surf Brewery, BNA Brewing Co., Freddy’s Brewpub (Mill Creek Brewing); Starkhund Brewing and Tree Brewing. Two new microbreweries, Boundry Brewing Co. and Kettle River Brewing Co., will be opening soon and also stand to benefit.
“These changes, combined with the increased production of hops in our province, spell a bright future for this growing industry,” says Kelowna-Lake Country MLA Norm Letnick. “Here in Kelowna we have five micro-breweries in operation and two more on the way. In helping these entrepreneurs to grow their businesses, we’re ensuring more consumers get to enjoy their top-notch local brews.”
“Craft brewers have spoken, and our government has responded with measures that modernize B.C.’s liquor policies,” says Steve Thomson, MLA for Kelowna-Mission. “These moves will help ensure this industry continues to grow and thrive locally and throughout the province.”
“B.C. continues to gain recognition as the craft beer capital of Canada,” says Premier Christy Clark, MLA for Westside-Kelowna. “Cutting red tape helps our talented craft brewers keep producing high-quality beverages enjoyed by British Columbians in Kelowna and across the province.”
Government’s support of innovation and entrepreneurship in B.C.’s burgeoning craft beer industry is in direct response to feedback government received from British Columbians and industry through the Liquor Policy Review and wholesale pricing consultations. The reduced mark-up rate builds on previous provincial efforts to cut red tape and increase supports for the craft beer industry, which have resulted in a 35% increase in the amount of craft beer produced in B.C. over the last year, including:
- Microbreweries now have opportunities to showcase their products at their local BC Liquor Stores – even before they’ve proven themselves in the larger marketplace.
- Breweries can access new revenue streams thanks to changes that allow on-site tasting lounges at breweries and beer sales at artisan and farmers’ markets.
- Breweries now have the ability to sell other types of liquor at in their lounges and special event areas, allowing patrons to enjoy a glass of wine or a mixed drink while their friends enjoy a beer.
- Government is also taking a closer look at ways to improve the process for getting a brewery licence and exploring a quality assurance program for craft producers to help promote made-in-B.C. beer.
- 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.
- 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.
- The Liquor Distribution Branch has extended the deadline for breweries to submit their supplier price changes for Period 4.