Yukon Party promises to axe markup on locally produced beer, spirits

The Yukon Party says it will allow local liquor manufacturers to sell directly to consumers, bar owners and offsales if it’s re-elected.

The Yukon Party says it will allow local liquor manufacturers to sell directly to consumers, bar owners and offsales if it’s re-elected.

The Yukon Liquor Corporation’s mandatory markup would not be applied to liquor sold directly by producers to their customers, meaning manufacturers and licensees could see cost savings.

But that doesn’t mean customers will pay any less when they order a pint.

Currently, the government markup varies depending on the type of alcohol and other factors. But the Yukon Party estimates the markup on a pack of 15 cans of Yukon Gold beer is $4.50.

It calculates that the change would cut revenue to the liquor corporation by $1.5 million.

“Instead of going toward YLC profits, that amount would stay with local businesses, with licensees, and with consumers,” said Mark Beese, the party’s candidate in Riverdale North.

“This is just one more step in improving small business here in Yukon,” said Stacey Hassard, the minister responsible for the liquor corporation and the party’s candidate in Pelly-Nisutlin.

The change would apply to products from Yukon Brewing, including its Two Brewers whisky, Winterlong Brewing Co., Yukon Shine Distillery and the Klondike River Distillery.

“We’re finally catching up to the rest of Canada and the rest of the world,” said Marko Marjanovic, co-owner of Winterlong Brewing. “This is a necessary change that allows our local businesses to grow and not be hindered by regulations within the government that prohibit our growth.”

Marjanovic said under the current system, orders can sit at the liquor corporation warehouse for six weeks to two months before licensees can get their hands on them. Licensees often don’t know what is available or when it will arrive.

He said the warehouse is a bit of a “black hole.”

Yukon Brewing owner Bob Baxter said he’s advocated for this change for nearly 20 years. He said one of the big problems with the current system is a lack of flexibility. For instance, he said, organizers of Whitehorse’s Frostbite Music Festival might not be able to predict exactly how much alcohol they’ll go through over the festival weekend. But if they run out on Saturday night when the liquor corporation is closed, they’re out of luck.

“We’re just down the road and could probably accommodate them,” he said.

The elimination of the markup could allow manufacturers to either increase their profit margins or to pass on some savings to licensees.

But Baxter and Marjanovic cautioned that dealing directly with customers will create new costs, too.

“We’d have to have a system that accommodates that,” Baxter said. “It means space and it means people and it means someone to pick up the phone.”

Marjanovic said he might have to add another staff member to set up an inventory and ordering system.

Christine Kent, co-owner of the Miner’s Daughter and the Dirty Northern Public House, said she supports the change because “it might open the market up for new manufacturing in the Yukon.”

But she wasn’t convinced that she’ll see any savings, or that any cost cuts would be passed on to customers.

Baxter agreed that customers might not see a change. “It would be really premature to think that suddenly your beer at the bar is going to be cheaper,” he said.

The new announcement arguably amounts to a subsidy for local liquor manufacturers, since outside producers will continue to pay the markup.

Protectionist liquor laws are nothing new in Canada. But the Yukon Party’s announcement comes at a time when some of those laws are being challenged.

In April, a New Brunswick judge ruled that restrictions on bringing alcohol into the province for personal use violate free-trade provisions in the Constitution. If the decision were upheld by the Supreme Court of Canada, where many expect it will end up, that could have major implications for protectionist laws in other jurisdictions.

In July, Yukon Premier Darrell Pasloski announced a new Canadian free-trade agreement while hosting provincial and territorial premiers in Whitehorse. The deal was meant to break down trade barriers between jurisdictions.

However, alcohol was excluded from the agreement, in part because of the ongoing case in New Brunswick.

A Yukon Party spokesperson said the party believes the proposed change does comply with internal trade rules, and added that if an outside brewery opened a branch in the Yukon, that branch would be treated like a local manufacturer.

Contact Maura Forrest at maura.forrest@yukon-news.com

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