Thursday, March 28, 2013

VEBB Post & CAMRA Vancouver Campaign Prompts NDP Promise to Scrap Growler Mark-up Increase

Yesterday the Campaign for Real Ale (CAMRA) BC - Vancouver Branch  scored what could become a major victory for BC craft beer consumers and craft breweries when NDP liquor critic Maurine Karagianis announced that if elected the NDP would scrap the increased mark-up for growlers being implemented by the BC Liquor Distribution Branch (LDB) as a result of them reclassifying the 1.8 litre, refillable jugs as "packaged" product.

Classifying growlers as draught would help
support small local breweries like Townsite
in Powell River
Growlers are, as mentioned, refillable jugs, used by consumers to buy fresh, draft beer directly from the brewery to be taken away for consumption elsewhere. Growlers date back to pre-Prohibition and have made a huge comeback in recent months with the opening of numerous small, craft breweries around the province. Growlers are unique in that consumers travel to the actual brewery to buy beer directly from the brewer and are usually cheaper than six-packs which are of comparable volume. The growlers are reusable, therefore great for the environment and cut down on a brewery's carbon footprint as the beer does not need to be transported to liquor stores, bars or restaurants to be sold.

The story of the reclassification and impending mark-up increase was first broken here on the VanEast Beer Blog and on the same day CAMRA Vancouver President Adam Chatburn launched the "Save the Growler Campaign" aimed at stopping the increase which will either result in less profits for breweries selling growlers or increased consumer prices, depending on whether the breweries decided to eat the increase or pass it on to their customers. 

The campaign quickly gained momentum as mainstream media picked up the story. CAMRA's "Save the Growler" petition has over 1900 signatures as of today, gathered in four weeks since the launch of their campaign. March 11th saw CAMRA BC President Rick Green and CAMRA Vancouver President Adam Chatburn travel to Victoria to join up with CAMRA BC VP Maureen Blaseckie, who had arranged for the three to meet with several NDP MLAs, including Karagianis, at the BC Legislature with the growler issue being front and centre of the issues they discussed. 

"This is unfair tax on small business and a sustainable industry has to go," stated Karagianis in a media release. "When it comes to liquor policy, this government (BC Liberals) just doesn't get it. Just weeks after a long-awaited announcement of a handful of liquor law changes, they are at it again, slipping through a tax that will make life harder for the growing (craft beer) industry."

To give a little back ground, breweries must pay a mark-up per litre of beer to the LDB and the amount they pay depends on their brewery's annual production levels and whether the product is sold as "packaged" product, which according to the LDB are "products that are packaged for customer consumption off-site," or "draught", which is product consumed at the point of purchase. 

Mark-ups as of April 1/13 (HL is 100 litres)

Breweries (>160,000 HL)
Packaged  - $1.63 
Draught - $1.12 

Breweries (>15,000 ≤ 160,000 HL)
Packaged - $1.08 
Draught -    $0.75 

Breweries (≤ 15,000 HL)
Packaged - $0.97 
Draught - $0.67 

For the most part, breweries that sell growlers are in the 15,000 HL or less category of production so the increase from draught to packaged is going to rise from $.67 to $.97 per litre. That may not sound much, but if you have a brewery that sells mainly growlers, which many new nano-breweries are planning to do, then this $.30 increase becomes thousands of dollars more being paid to the LDB each year, a number that can really impede small breweries operating on a tight budgets.

There has been mass confusion lately about how mark-ups regarding growlers are implemented, with some breweries being charged the lower draught rate per litre and some the higher packaged rate for growler refills creating an uneven playing field in the marketplace. Some brewery representatives were shocked when they found out they had been paying the LDB 30% more of a mark-up than some of their competitors, all at the direction of LDB officials.

It was obvious that the LDB had no handle on what was going on with breweries selling growlers. 

When I found out about this reclassification and put in a media request to the LDB for information about growler mark-up policy, I was told repeatedly for three weeks that no one from the LDB could supply me with an explanation as to how growlers were marked up, information that should be very easy to access and explain. 

When I finally did get an explanation in an email Feb 28/13, I was told, "currently, the packaged mark-up rate is applied to the first Growler fill and the draught mark-up rate is applied to refills," but that, "it was determined that Growlers, both the first fill and all refills, should be subject to the packaged beer mark-up rate because they are packaged for customer consumption off-site."  

In another email forwarded from LDB General Manager Blaine Lawson March 26/13, it was explained that, 
"Growlers were subject to the packaged beer mark-up rate for over a decade, until January 2012 when an error was made that created a distinction between the first fill and subsequent refills.  We recently reviewed the application of mark-up on Growlers and reaffirmed that the packaged rate is the correct rate that should be applied.  The packaged mark-up rate is applied to products that are packaged for customer consumption off-site. Growlers clearly fall within this category.  The Liquor Distribution Branch has a responsibility to apply mark-up equitably within product categories and the correction of this error was done for that purpose."
It seems that if the NDP are elected, all this will be a moot point as they have committed to lower the growler rate back to the draught rate in order to help support small businesses in one of BC's fastest growing industries and help promote the sale of these ecologically friendly jugs. But it is pre-election, so promises will be coming from all political sides at a fast and furious rate and we all know how many times these pre-election promises get forgotten about post-election.

If the promise is kept and the roll-back implemented, it will be the first major campaign victory for CAMRA here in BC and hopefully the beginning of CAMRA being included in any future consultations in regards to reviewing and reforming liquor laws. It may also help CAMRA get some support in regards to their other existing campaigns like FUSS and BYOCB, both of which the NDP have shown interest in  over the past year, or any future issues they see fit to tackle on behalf of the province's craft beer consumers.

1 comment:

  1. Good on the NDP for getting behind this. It's still not enough for me to vote for them ;-)