It’s a good move for a growing industry.
Monday, the provincial government moved to help a range of smaller craft businesses that manufacture alcoholic beverages by lowering the amount they have to pay the province to make their products. (It’s part of a loosening of alcohol regulations that will also allow “you-brew” type operations, where customers brew their own beer and wine on site at a retail store, in the province for the first time.)
Specifically, the provincial government reduced the amount that small breweries, wineries, distilleries and cideries have to pay to the province on every litre of product they produce.
The change isn’t huge — just a reduction of seven per cent — and it’s only for the first million litres or so that the facilities produce. (There will be even higher fee breaks on alcoholic products sold directly from a producer’s production facility.)
Unlike their huge competitors, a share of their money is not heading out of province to a head office far, far away. Not only that, local suppliers often get the benefit of purchases by craft producers.
But even though the rollback seems small, it’s a valuable incentive just the same.
That’s because costs per litre are traditionally higher when the output is smaller — there are economies of scale that small, fledgling operations can’t take advantage of, and it’s a leg up for companies just entering the marketplace.
It’s something else as well: while the small craft operations are unlikely to supplant their big business rivals in spirits, beer and wine, they have the advantage of not only creating employment here, but keeping all their revenues spinning around our economy. Unlike their huge competitors, a share of their money is not heading out of province to a head office far, far away. Not only that, local suppliers often get the benefit of purchases by craft producers.
This is not to say that beer industry giants like Molson and Labatt don’t brew the vast majority of beer and employ scores of people in this province; of course they do. And given the overall popularity of their brands, they will continue to do that. The bite taken out of their business by craft beer offerings is small and is unlikely to do significant damage to their bottom line any time soon. Molson Coors made US$1.4 billion in profits last year, while ABInBev, the owner of Labatt, collected worldwide gross profits of US$35 billion.
Their combined beer output quite literally makes smaller brewers in this province look not only like a drop in a bucket, but like a drop in the harbour.
The decreased fees will give consumers more choice, will give craft brewers a better chance of having their businesses operate as going concerns and is an excellent way to foster self-sufficiency in a province that imports far too much food and drink already.
And fostering small, local, independent business, especially in the manufacturing sector?
That’s how you build a complete economy.