Prices of Nelson craft brew beers up this summer due to new government regulations

Colin Payne
By Colin Payne
June 18th, 2015

As things heat up and the prime beer drinking season of the year arrives, locals could see higher prices for their favourite local craft beers – as brewers say new liquor regulations by the province are raising prices for their products at private liquor stores.

The Victoria Times Colonist reports that the B.C. Liquor Distribution Branch (LDB) put the standard wholesale prices in place as of April 1 to create an even playing field for all for liquor retailers by eliminating various subsidies given to different parts of the industry.

While prices for beer from large brewers such as Molson, Labatt and Budwiser will only go up by a few cents, prices for some craft brew beer in the province could go up as much as seven to eight per cent.

The main place beer lovers will see the price increase is at private liquor stores, which lost their 16 per cent subsidy on wholesale costs and now pay the same price as government-run liquor stores pay.

“What affects us the most is that with the modley they put in place, it has actually made it very difficult for the private sector to make the same (profit) margins they were before, which has resulted in them deciding rather not to carry our product or to increase the price and make it less desirable to the consumer,” says Al McLeod at Nelson Brewing Company (NBC).

According to the Times Colonist, the cost of a six pack of NBC’s Paddywack IPA went up from $10.83 in March to $11.79 in June, 2015 an increase of almost eight per cent.

He said the increase in prices could mean the difference between locals choosing NBC beers, and others that cost less – and in the process seeing sales at private outlets drop, which could lead to private retailers deciding not to carry the company’s products.

“The reason we’re concerned is because our beer is a bit more expensive than the low-grade lagers out there,” McLeod explains.

“For consumers, it’s a bit of a shell shock…”

He adds that one of the main issues of contention around the new regulations is the fact that there was little to no consultation or warning about the changes before they were put in place, and he feels the new regulations favour larger, corporate breweries.

“Now we’re seeing that this model doesn’t work that well for craft beer, and we’re concerned because once again, it shows a bit of protectionism to corporate breweries and low-grade products.

The new law is a bit of a blessing and a curse for another new local brewery.

Torchlight Brewery started making craft beer in Nelson just a year ago, offering sales only directly from their own tasting room. But the company recently started bottling its product for sale.

Craig Swendson, co-owner of Torchlight, says the new regulations actually simplify things for their on-site tasting room.

“Under the new system, with our tasting room, administration is a lot more simple,” Swendson says. “So it works better for us that way.”

But when it comes to the company’s new bottling venture, he says the new regulations have the potential to impact sales at private liquor stores.

“So far it’s been good. Local stores have been good to us about getting our products in. But I think in the long run it’s going to be more difficult because of the extra cost involved.”

LDB spokesperson April Kemick told the Times Colonist that the crown corporation reviews prices regularly and while the latest changes saw the price of some beer go up, others went down.

“Like any retailer, B.C. Liquor Stores review prices on an ongoing basis to ensure products are priced according to market demand, profitability, changes in supplier prices, etc. In any given month, some prices go up and some go down. Minimal price increases – in the range of 20 to 50 cents – were applied to some beer in June, while in other cases, price promotions were applied, making products less expensive.”

This post was syndicated from https://thenelsondaily.com
Categories: BusinessGeneral

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