Province growls at brewery tax loophole

Craft brewery patrons will be paying more for takeaway draught soon

Gary Lindsay

It’s Friday afternoon at the corner of Bridge and David streets in Victoria’s Rock Bay neighbourhood.

Five-ton trucks rumble by steel-fenced industrial warehouses, while a steady rush of patrons dutifully file through unmarked doors carrying what look like old moonshine bottles.

Inside, staff at the neighbouring Hoyne and Driftwood breweries can barely keep pace with demand for a 19th-century tradition that’s been revived in recent years, a result of the proliferation of craft brewing in the Capital Region.

Sold by most breweries for a one-time price of $5, growlers are 1.8-litre glass jugs that can be filled and refilled for about $10 onsite.

While only slightly cheaper than an average six-pack at the liquor store, growler use has exploded in popularity for obvious reasons, said Gary Lindsay, Driftwood brewery owner.

“It’s like going to a bakery to get your bread or to a marketplace that has their own farm,” he said. “Anything that connects people to the source of what they’re buying, it means a lot more to them.”

Brewery owners also keep more revenue from growler sales. B.C.’s Liquor Distribution Branch takes a lower mark-up on draught than on packaged beer sales, a difference of .28 cents per litre.

But on April 1, the LDB will begin siphoning those savings back into government coffers, arguing patrons are consuming the beer off-site so the draught rate shouldn’t apply.

Local brewers can’t predict if the change will impact their bottom line, but the cost will undoubtedly be passed on to the customer.

That doesn’t bode well for brewery regulars like Peggy Leonard, a 40-something Victoria resident who fills up two growlers every weekend.

“If I’m going to somebody’s house, I’ll bring a growler and everybody wants to try it,” Leonard said, adding a higher price may impact her love for takeaway draught.

The LDB levy chips away at craft brewery revenue at a time when most are looking to expand to bigger markets.

“Like any other business in the food and beverage industry, it’s a game of nickels and dimes,” said John Fitterer, sales and marketing manager at Lighthouse Brewing Company. “Everyone’s trying to make a 10-to-15-per-cent bottom line.”

Lighthouse plans to open its first growler and tasting room next week after a 6,000-sq. ft. expansion.

But other breweries like Phillips, Vancouver Island, Hoyne, Driftwood, Moon Under Water, Spinnaker’s and Canoe have been providing growler sales for varying periods, and all have seen a steady increase in onsite sales.

“Part of the idea is it’s environmentally friendly to use the same growler, and it’s also really cost-efficient for the people buying it, and it’s great for us, because we don’t have to package product to sell it,” said Chelsea Walker, co-owner of Moon Under Water brewpub.

In response to the planned mark-up, The Campaign for Real Ale Society of British Columbia is circulating an online petition, hoping to lobby Minister Rich Coleman to reconsider the policy revision.

“This tax hike will harm the growth of this industry and the culture of B.C.,” it states.

dpalmer@vicnews.com