Yukon News

Push brewing to slash YLC beer markup

Andrew Seal Wednesday June 7, 2017

Joel Krahn/Yukon News

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Opposition Leader Stacey Hassard pours a beer at an election campaign event in 2016. Hassard has asked the government make changes the Yukon’s liquor rules.

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.

Contact Andrew Seal at .(JavaScript must be enabled to view this email address)

10 Comments

TP wrote:
12:50pm Friday June 16, 2017

Perhaps I don’t understand the purpose of the Yukon Liquor Corporation or what the markup money is used for.  It seems to me that eliminating the markup would give the brewery an unfair advantage when selling alcohol in their tasting room (as opposed to buying the same drink in a local bar)?  If the markup is a tax to discourage people from drinking too much, it doesn’t seem to be working. On the other hand, if it is collected to facilitate the centralized distribution of alcohol it seems to be doing its job, in most cases.

The article says the corporation is looking at ways to “help out local brewers”.  Do they need help?  Are they suffering?  Is business down in the dumps?  Thought not. 

If the government wants to help out local businesses, they could have helped the Salvation Army Thrift Store stay in business, but brewers? At a time when business seems to be booming?  I understand that the government is proud of the success of local brewers, but is this a reason to help them out financially when they don’t seem to need help?  I may be wrong, but from what I can gather, it all seems to do with greed:  business is booming, the local beer is popular, therefore this is a good time to pressure the government for “help” less the politicians lose popularity for refusing to “help” a popular business. 

If there is some other logic other than greed going on here, I’d like to know.

The Middle Road wrote:
6:12pm Saturday June 10, 2017

Why the government is even involved in this manner is bewildering. The sooner this ridiculous arrangement is ended the better.

Hmmm wrote:
1:23pm Friday June 9, 2017

I really question whether or not such changes are even possible under national and international trade agreements. Always great to support local though!

yukonlibby wrote:
8:29pm Thursday June 8, 2017

For the record BnR and others, this was in the Yukon Party’s platform in the last election, it was to be another step in modernizing our liquor act, which they had been working diligently on over those 14 years.

Alan wrote:
1:23pm Thursday June 8, 2017

Alcohol is the number 1 problem in the North by a country mile.

Yukoner wrote:
9:26am Thursday June 8, 2017

Sounds a little like local brewers are looking for the best of both worlds, want to keep more profits, but also want YLC to still provide services for free (ie shipping). Would local brewers drop their prices if the markup was removed or is it just going to go straight into their pockets?

Mikey wrote:
4:27pm Wednesday June 7, 2017

@ BNR They had 14 years

Stella wrote:
2:49pm Wednesday June 7, 2017

Well the Yukon Party may not have won the election but they are still the only party putting forward good ideas.

BnR wrote:
2:38pm Wednesday June 7, 2017

The Yukon Party had how many years to implement these changes….?

ProScience Greenie wrote:
1:01pm Wednesday June 7, 2017

Good on Hazard for pushing for this. It is not a sin for a hard working Yukon person to enjoy a cold locally brewed beer after a hard day’s work. Time for the government(s) to stop financially punishing us for that just to fill their general revenue coffers.

Next up is ensuring that locally brewed beer is not subject to the carbon sin tax on top of the already over the top sin taxes.

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