Push brewing to slash YLC beer markup
Joel Krahn/Yukon News
Opposition Leader Stacey Hassard pressed the government May 31 to consider two changes to the territory’s liquor rules: eliminating the government markup on locally produced alcohol and allowing producers to sell directly to retailers.
The changes were part of the Yukon Party’s election platform in 2016 and the elimination of tariffs is popular amongst local producers.
The Yukon Liquor Corporation applies a 23 per cent markup on packaged beer produced by small brewers.
This means that Whitehorse’s Winterlong Brewing Company has to sell their beer to the YLC and then buy it back at the markup so they can sell it in their own tasting room.
“At the end of the month, we tell them how much we’ve sold and they apply a 23 per cent markup which we have to pay, even though they don’t touch it,” said Winterlong co-owner Marko Marjanovic.
“It would definitely be nice to not have to pay that markup since the Yukon Liquor Corp isn’t involved except for a few hours of invoicing at the end of the month.”
The markup also extends to the beer that Winterlong sends to the YLC for sale elsewhere, but this isn’t paid by Winterlong.
“I know there was some talk of eliminating [the markup] for local producers which would certainly give us an advantage in terms of competing with out-of-province producers,” said Marjanovic.
It’s not yet entirely clear, though, whether exempting local producers from the markup would be compatible with NAFTA or the Canada Free Trade Agreement.
Hassard, a main proponent of the changes, said “it’s nothing that should be indefensible” under current trade agreements.
Jeff Erasmus, YLC’s director of operations, saidpricing was among several options the corporation is looking at to help local brewers.
“We’re very mindful of the trade implications with respect to providing favourable markups to local producers and we’re going to be looking at options that are available within the confines of these agreements.”
On the other hand, allowing direct sales to retailers might be easier to implement, but is met more cautiously by Marjanovic.
“That’s sort of a double-edged sword,” he said. “Right now YLC has a service where, for example, if I want to send a keg up to Dawson City, I just deliver it to the warehouse downtown here and they ship it up there for free as part of their service. I wouldn’t want to eliminate that portion of it.”
Hassard is confident YLC’s services wouldn’t be impacted. “It’s all about reducing red tape,” he said.
While direct sales would allow local producers to learn more about who is buying and drinking their beer, they would also have to hire more administrative staff.
“It would be a bit more work, but I wouldn’t see the harm in having it as an option as long as it didn’t eliminate the other side of the service that YLC provides of shipping around the territory for basically nothing,” said Marjanovic.
The YLC says it will review policies over the next year and consult with producers and the public.