Craft breweries in Penticton and the South Okanagan are set to have a more profitable summer after the province recently announced a reduction in mark-up rates for smaller breweries.
Starting July 3, the mark-up rate for small and regional breweries will be reduced by approximately 25 per cent per litre.
This comes on the heels of the new wholesale pricing model introduced by the province last year.
As well, craft breweries will no longer be required to remit the supplier price of their products to the Liquor Distribution Branch, which the province says will improve cash flow for companies.
It will impact all the Penticton breweries — Bad Tattoo Brewing, Barley Mill Brewpub, Cannery Brewing Co. and Tin Whistle Brewing.
Penticton MLA Dan Ashton said the changes were “great news for the thriving industry” in a press release.
The changes will help in the South Okanagan as well. Boundary-Similkameen MLA Linda Larson visited the only brewery in her riding, the Firehall Brewery in Oliver. Sid Ruhland, brewmaster at the Firehall Brewery, was excited about the changes.
“It means that we have more of a fighting chance to make our business economically sustainable and actually be able to grow,” Ruhland said.
Producing 15,000 hectolitres or less put the Firehall brewery in the lowest tax bracket for breweries until now. Firehall produces 300 hectolitres. Ruhland said prior to the changes the brewery could be over 30 times its size and still paying the same taxes.
“There hasn’t been the proper scaling for being such a tiny brewery as we are. We want to keep our batches high quality without making too much quantity because there’s always that quality/quantity trade off,” Ruhland said. “We like being small and even if we were 30 to 33 times our size, in the industry, we would still be small.”
Larson said that when Attorney General and Minister of Justice Suzanne Anton, who was minister responsible for alcohol at the time, was in Oliver about a year ago she was canvassing local breweries to identify the issues they were facing.
“It was part of the work she was doing to find out how to get government out of the way, to make these small, new breweries, because they were all pretty new a year ago, to make them more profitable,” Larson said. “This particular issue was identified by Sid and (father) Jim (Ruhland) as being a major problem for them. They were being charged as if they were a big brewery when they were just a little brewery.”
For the Ruhlands, it was nice to have their concerns heard in a quick timeframe.
“They came here and they wanted to hear the plight of the small brewery,” Sid Ruhland said. “It’s a good feeling to know that we’re being listened to in as short as a year, and something that is substantial, something that is more than just talk, fluff, it’s actually dollars and cents.”