Changes to the way the Yukon Liquor Corporation (YLC) does business will benefit local craft makers “significantly,” said Bob Baxter, co-owner of Yukon Brewing.
On Jan. 1, 2019, a wholesale pricing model will come into effect, expected to save licensees roughly $250,000 in total, said YLC president Matt King. This figure is predicated on booze sales of previous years.
As part of the changes, small producers will now be charged at a fixed per litre rate rather than a percentage of the cost of their products.
This means that Yukon Brewing would save nearly double, even with the same shelf price, Baxter said.
Under the former system, the more expensive the product, the higher a percentage owed to the YLC, he said. This had a trickle-down effect in that consumers could pay more.
“We typically see higher supplier prices for craft beer,” King said. “If you have a percentage-based markup on top of that, that means the markup is that much higher as well, so this per litre basis helps to keep the small producer product prices more competitive with large companies in the beverage industry.”
The markup schedule for small producers was introduced on Dec. 1, with the full implementation occurring a month later to the day.
Whether Yukon Brewing’s beer will dip in price for the consumer is to be determined because prices can fluctuate, Baxter said.
“It’s an item by item investigation we have to do,” he said. “I wouldn’t be surprised to see some go down, I also wouldn’t be surprised to see a couple go up.”
Consumers could save on domestic and imported beer and wine, though.
A 12 pack of Molson Canadian, for example, is predicted to decrease by $1.65; a bottle of Apothic Red could cost $0.65 less, according to an YLC cost comparison sheet.
These potential savings would be offset by a higher price for spirits, King said.
The shelf price for a bottle of Wisers Special Blend, for instance, could increase by $3.25.
Like craft beer makers, small distilleries will be charged per litre to give them a competitive edge in the market
This, King said, will make it more viable to get local spirits in liquor stores.
Two Brewers, the same company as Yukon Brewing, is doing exactly that, stocking its whisky in government outlets throughout the territory. In addition to that is a berry liqueur, called Concept.
Bars and restaurants will be able to gain access to these spirits Baxter said. He added that prices to the customer won’t change.
Marko Marjanovic, co-owner of Winterlong Brewing, said he’s going to “wait and watch” what other small producers are charging in the New Year before making any decisions.
But the change, overall, is definitely a positive, he said, because it creates a more even playing field.
“I don’t think that higher priced products should be penalized because of their rarity or craft nature,” Marjanovic said. “If I decide to charge more because I’m smaller, I shouldn’t be hurt over somebody who can produce hundreds more and they actual have less markup.”
On Dec. 11, consumers saved $0.60 on Winterlong’s seasonal Guilt Trip Barleywine bought through YLC, he said.
“Our higher priced products are even cheaper now,” Marjanovic said.
There’s another perk.
If beer is to be sold at the brick and mortar shop located on Mount Sima Road, YLC now waives a cost of service charge, he said.
The $0.30 per litre fee goes towards distribution and warehouse costs taken on by YLC.
“There’s now more of an incentive for us to bring people to our store, to sell less to the liquor corporation. The change has done that for us,” Marjanovic said.
Contact Julien Gignac at julien.gignac@yukon-news.com