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.

Wednesday, March 27, 2013

Open Letter to Mayor Robertson & Vancouver City Council

Dear Mayor Robertson and Elected Vancouver City Councillors:

First of all I want to introduce myself as Paddy Treavor, a long-time Vancouver resident and one that takes his civic duty to vote in elections very seriously.

Democracy only works with participation and that participation, on both the voter and politician side of the equation, reaches beyond election campaigns and the act of voting. Once the votes are cast and the candidates chosen for public office, it is of paramount importance that those elected to office are held accountable by the citizens they represent and that the politicians take this responsibility seriously, and not consider themselves above the people who hold the power of returning the politicians to office or replacing them with other, more responsible and accountable candidates in the next election.

It is because of this concept of political accountability I am writing you all.

I recently sent an email entitled "Vancouver City's Lack of Support for Local Industry" outlining how supporting the new provincial liquor law allowing for on-site beer lounges at breweries could be a great way for the City of Vancouver to support local, small businesses, promote local tourism, provide more opportunities for local employment and attract businesses to locate in Vancouver in the future. The email was a follow-up on a blog post I wrote entitled "No Fun City Bureaucracy Stands in the Way of Beer Lounges", a story that highlights how current Vancouver City zoning by-laws and liquor licensing polices are prohibiting local breweries from taking advantage of this great opportunity. Even if you did not read my blog post, and I encourage you to do so, the story was picked up by The Province newspaper a few days later so you may be familiar with the problem.

Almost two weeks have passed and the only response I have received is one from the city clerk stating they had forwarded my email to Mr Mayor and City Councillors. This is not the first time I have received no response to emails sent to Vancouver City Hall regarding issues involving the rights of local craft beer consumers and the local craft beer industry, so I am beginning to think that Mayor Robertson's appearances at Vancouver Craft Beer Week, to tap the first cask, were more photo opportunities than a true desire to support the local craft beer industry and that Vancouver City Council does not take the craft beer industry and the consumers who support it, very seriously.

When I was president  (2011-2012) of the Campaign for Real Ale (CAMRA) BC - Vancouver Branch, a Vancouver-based consumer advocacy group which currently boasts a membership of close to 1000 members, either myself or a member of my executive sent several emails asking for City Council support on campaigns like Fess Up to Serving Sizes (FUSS), addressing the common practice of liquor licensees misrepresenting their draft beer serving sizes in your city and Bring Your Own Craft Beer (BYOCB), asking for your support to have beer included in changes to provincial liquor laws involving corkage which would have been great for craft beer consumers in your city and would help spur on the local hospitality and craft beer industries.

Silence. Not even the courtesy of an email saying, "not interested". That doesn't seem very accountable to me.

I understand you are all busy running our great city, but these issues have been important enough to illicit responses from other busy politicians such as Liberal Cabinet Minister Rich Coleman, and NDP Caucus Chair, Shane Simpson, to name but a few, as well as from Liquor Control and Licensing Branch General Manager, Karen Ayers. These issues I wrote you all about were also important enough to be brought up and discussed in the BC Legislature, but not important enough to get any response from yourselves even thought they are issues that impact the voters this city on a daily basis and which, with your support and attention, could be resolved here in Vancouver.

The only time I have received any response to emails sent to Vancouver municipal politicians was just prior to the last election when I sent out an email to all candidates asking them a specific set of questions regrading how they would support the local craft beer consumer and craft beer industry. During that pre-election period, when politicians are doing their best to connect with as many voters as possible in attempts to get their votes, I did receive email responses from several candidates, including current City Councillors:

  •  George Affleck, who stated he "would be happy to take a lead" on the subject of allowing for "smaller pubs spread around the city like they are in the UK," which supporting beer lounges would do quite nicely.  
  • Jerry Jang, who stated Vancouver City Council can, "encourage the establishment of the (craft beer) industry through zoning,", the same zoning that is prohibiting beer lounges at this time. He also stated, "neighbourhood pubs are important not only because they add to the character of a neighbourhood, but also prevents drinking and driving as one can walk home!". Hmmm, beer lounges are not neighbourhood pubs, as the legislation states they are "endorsements" on manufacturing licenses, but they sure would function in a very similar way.
  • Heather Deal, who stated she would "like to see more small pubs in neighborhoods throughout the city.Again, beer lounges could be a great way to have these small, licensed establishments dotted around the city. To Heather's credit, although she has ignored all emails sent post-election by myself or CAMRA when I was president,  has kept her pre-election promise to "work with" CAMRA, having just taken a meeting with current CAMRA Vancouver President, Adam Chatburn. Whether that meeting comes to anything is yet to be seen, but at least she responded.

I am a very active advocate, championing the rights of BC's craft beer consumers and the vibrant and growing craft beer industry here in our province. As I mentioned, I am a blogger, the author of the award-winning VanEast Beer Blog, the very blog you are reading now, a blog that reaches thousands of people each month, many of whom live in Vancouver and will be voting in the next election. I am not saying I can persuade these readers to vote one way or another, but I do think that those voters knowing you are ignoring these issues that they are so passionate about may cause them to rethink whether they want to re-elect politicians who so blatantly ignore their voices.

Yes, I am but one person, one vote, but there are thousands of others who think the same way as I do on these issues and these people are my readers.

And just to let you know that I was on to something when I wrote in my post that is Vancouver City does not embrace the idea of beer lounges ASAP, they will lose businesses to other municipalities,  the exodus has started. I already know of one person who has recently scrapped plans to open a small brewery in Vancouver, in favour of a neighbouring city, because of your restrictive zoning by-laws, stifling liquor licensing policies and unnecessarily complicated and onerous process of opening a brewery here in Vancouver City.

If you do not start paying attention to people like myself who are advocating on behalf of one of the most vibrant consumer markets and industry segments of this province, you are going to see many more breweries opening in neighbouring cities, paying their taxes and luring tourism and business away from Vancouver City. That would be a travesty as Vancouver, if politicians have enough vision, could become the Portland North, attracting millions of tourist dollars a year because of their great craft beer scene.

I can tell you, politicians at the provincial level are listening and meeting with people like myself and CAMRA Vancouver President Adam Chatburn and listening to what we have to say. I hope, for the sake of our great city, you all start to take some notice as well before it is too late for both the craft beer industry in this city and yourselves come the next election.

Thursday, March 14, 2013

The Fat Tug Standard - One Man's Search for the Ultimate Pint

Things have been getting kind of heavy & political lately on VEBB so I thought I'd break up the rants with something I have enjoyed researching...back to your regularly broadcast programming shortly...
In search of the ultimate Fat Tug...sounds like a lot of fun to me
Back in the mid-80's, when I was on my first extended trip in Europe and Middle East, I developed some survival skills to help me get by in the wilds beyond the borders Surrey where I grew up.

One such skill of great importance was the one I used to decide which restaurant or bar I was going to plant my ass in and this method I dubbed "The Amstel Standard".

I developed this in Greece, where at that time the only decent beer I could find was Amstel and by decent, I mean best of a bad, Eurotrash selection. My method was based on sound empirical research and basically involved me looking at countless menus around whatever city/town/village I was in to see if they sold Amstel beer and if so, at what price.

If they did and the price was good, that's where I camped out and drank beer. Having only a few dollars a day to spend while backpacking, finding the cheapest place to slake my thirst was a top priority, as often I had to choose between food and beer (and you know who won that battle most days), so I would be on constant lookout for the best deal while out sightseeing or doing whatever it was I was up to that day.

Very advanced and clever, don't you think.

I adopted this method in each country I visited, renaming it after my favourite, or sometimes the only available beer in that country. In Israel, it was the "Gold Star Standard", the best adaptation of the name, but probably the worst beer I ever used as a standard, not that there was much choice in mid-80's in Israel.

The other day I got to thinking (yes, sometimes I have a momentary lapse of reason or two) and decided to research "The Fat Tug Standard", which, now that I think about it, sounds more like something that should catch the attention of the vice squad than searching for the best deal on my favourite beer. My love for this beer is only surpassed by my love for my wife and daughter so I thought I would do some "research". I just love it when my wife asks me where I am off and I can reply, "just doing research for my blog dear, see you in a few hours." Of course, she knows what this means, but in this case, at least she won't be able to easily find me perched at the bar in either St Augustine's or Tangent Cafe, my two locals, as I wander all Vancouver looking for the ultimate (read cheapest) Fat Tug.

I do have to say that there are many different factors that contribute to cost here in Vancouver that may not apply in the beach bars of Greece, such as the existence and cost of a liquor license and business permit, paying staff more than just drinks, costs of building upkeep (there is little upkeep when your bar is a palapa with no walls) and I tend to be less picky about where I drink when I am sitting with my feet in the sand surrounded by merry backpackers and scantily-clad Scandinavian women (obviously the Amstel Standard was developed during my single days) and when I am paying in currency valued much less than the Canadian dollar.

Here in Vancouver I choose where I belly up to the bar based on many different factors such as staff knowledge and service levels, how my beer is served, atmosphere, the ethics of the bar management/ownership, whether I want to watch the game or not, convenience to transit, approval of my wife, whether Fat Tug, or a suitable substitute IPA, is one tap and, of course, price, but price usually only factors in if it is so prohibitive that it obliterates all other factors.

I will do my best to break down the city into geographical areas and find as many taps of Fat Tug as I can and I will do a post per area researched. I know I will miss some areas and some locations, but hey, a man only has so much spare time, one liver and I cannot afford a divorce lawyer.

And for those of you who feel I am favouring Driftwood and Fat Tug beer, well, you are absolutely right. This is my blog and I prefer Fat Tug over any other beer in the world I have found.

Since I live about 200 metres of Commercial Drive, I figured that would be as good a place as any to start, so here we go...

(All prices pre-tax & rounded to the nearest cent in ounces only)

Commercial Drive - Draft 
Establishments listed from south to north from 12th Ave to Venables

Serving Size
Price Regular
Price Special
Regular Price Breakdown
Special Price
$5.00 (Tuesdays)
$0.43 oz
$0.36 oz  

$0.38 oz

$4.75 (Tuesdays)
$0.41 oz 
$0.30 oz  



$0.31 oz

$0.31 oz 


$0.29 oz  

$.41 oz 

Commercial Drive - Bottle 

Price Breakdown

$0.30 oz

$0.26 oz

$0.24 oz

If you see any places I have omitted, please email me at and let me know. Also, if you work in an establishment in Vancouver that serves Fat Tug, email and let me know where, how much and serving size (uses ounces not words like sleeve that have absolutely no value).

Cheers and Happy Fat Tugging my friends.

Sunday, March 10, 2013

Gov't Seems to Have Gotten It Mostly Right With Tied House Changes

On Feb 08, Rich Coleman, the cabinet minister responsible for the province's alcohol portfolio, sent out a news release announcing several significant changes to the BC's liquor laws, including the relaxation of the tied house laws.

The tied house law reforms had been highly anticipated by some, who were hamstrung by the restrictions, and feared by others who were worried that complete deregulation would give deep-pocketed breweries the green light to buy licensees and cut out the smaller, craft brewery competition. 

But for once, it looks like the government got it right, stating in their news release, "(t)his change provides small and medium winery, distillery or brewery owners that also own an off-site restaurant or pub the freedom to serve their products in their establishments, which they were previously not allowed to do." The communique went on to explain manufacturers would only be allowed a maximum of three tied-house agreements and that these tied houses would be, "required to carry a variety of products from different suppliers to avoid particular products being favoured," thereby limiting any large manufacturers attempts to squeeze out the competition.  I know some do not think the legislation changes went far enough, as some manufacturers have more than three tied houses and would like to sell their products in all their off-site locations, but most seem satisfied.

Changes were supposed to take effect March 1st, but before you go rushing down to St Augustine's in hopes of enjoying a sleeve of Parallel 49's Vow of Silence or Lord of the Hops, be advised that there is an application process which, according to a communication from the Liquor Control & Licensing Branch (LCLB), will take 6-8 weeks to process. March 1st was the first day the LCLB werre taking applications so we are still a few weeks off.

LCLB Policy Directive, 13-03 explains all the details of the tied house changes, including the only negative I can see to the legislation that classifies medium-sized breweries as being those whose annual production up to 300,000 HL, which is a whole lot of beer and allows for breweries like Pacific Western Brewing to take advantage of the changes. The restriction of only three tied houses and the need for beers from competition basically stops in its tracks any attempts at BC beer domination by the bigger breweries.

The LCLB have stated there are no hidden criteria and what you see with the policy directive is what you get. The application process was a bit of a surprise for some, but not surprising as the LCLB is a bureaucracy and bureaucracies need paperwork and application fees to live. 

And obviously it is a great way to ensure that no one brewery tried to sneak past the three tied-house limit via subsidiaries or other nefariousness means and that they are indeed offering up the a variety of beers including those of some of their competition. 

I do know Parallel 49 has already applied so lets hope we can be enjoying their beers at St Augustine's by mid April. I, for one, want to be there to drink from the first tapped keg/cask for the historic moment in BC liquor history.

Tuesday, March 5, 2013

Local Breweries Feel Slighted by LDB's Plan to Lure US Craft Sales to Gov't Liquor Stores

Despite the fact that many small, BC craft breweries often struggle to get their beers listed to be sold in the government run BC Liquor Stores, the Liquor Distribution Branch (LDB) is sending one of their own to the Craft Brewers Conference & BeerExpo America (CBC) to give a talk about "market opportunities" in BC for US craft breweries.

LDB Portfolio Manager, Kimberly Giesbrecht, is set to give a one-hour talk entitled Canada Market - British Columbia during a day of talks dedicated to "Export Development" at the CBC.  According to the LDB, Giesbrecht was invited to speak at the CBC by the U.S. National Craft Beer Association (USNCBA), "because BC is recognized as very supportive of the craft beer industry,"  and that Giesbrecht, "will be sharing her insight into the BC market with their members," addressing, "craft brewers from around the world including many from BC."

I hope BC craft brewers do not have to travel all the way to Washington, DC, where the conference is being held, to benefit from Giesbrecht's insights about the BC craft beer market.

The description of the talk, to be given March 27, states:
"U.S. craft beers have seen solid growth in British Columbia through the government-run liquor stores and private retail. British Columbia Liquor Distribution Branch category manager Kim Giesbrecht will speak about the performance of American craft beers in the province and market opportunities."

Why is this worthy of mentioning you ask?

Well, for one, this foray to Washington, DC by a government bureaucrat to try to lure US craft breweries to sell in BC government run liquor stores is a direct slap in the face to the local craft breweries who employ local people, support other local businesses and industries, pay local and provincial taxes, spur on local economy, draw people to the province via tourism and who struggle to get their beers sold via the LDB outlets and who, for the most part, feel the LDB but little to promote and market them in LDB stores the same way they do the BC wine industry. It is especially sensitive with some local brewery owners I have spoken to in the face of the fact that recently the Provincial Gov't announced  "a honorary B.C. wine envoy will be named with a mandate to work to complement existing efforts to open up domestic markets for B.C. wines." 

Many may not know, but having a brewery in BC and making great beer does not automatically give you access to selling your locally brewed beers  in BC Liquor Stores. Breweries have to apply to get their beers "listed" with the LDB and are often turned down for various reasons. The application process is complicated with many specifications that must be met in regards to the beer's production, packaging, etc before an actual listing is approved and the beer can be sold in the LDB stores. 

Many craft breweries have to settle on getting the majority of their beers "registered" which means they can sell, on behalf of the LDB, directly to consumers from their own store front, if they happen to have one, or sell to private liquor retail stores (LRS) which are more open to trying new, unique and small-batch, specialty items. But having your product registered, without a listing for the government store prohibits that product from being sold through the LDB outlets.

Competition for shelf space in LDB stores is getting fierce and there are more local breweries set to open over he next few years so the situation is not going to get better. Not all will want to sell via the LDB, but those that do will have to compete with breweries who are already established, up and running and, as I stated, who are already finding it difficult to sell via the government outlets themselves. 

And it appears, if Giesbrecht's talk is successful, they will have to compete with more US craft breweries for space as well.

So why is the LDB actively seeking out to import US craft beers to sell in their stores that could potentially make it more difficult for local breweries to get their beers to market? 

Why is it so difficult for BC craft breweries to get all their beers into the LDB stores?

I posed these questions to the LDB and Kim Giesbrecht and I received a reply from the LDB's Communication Department. 

In their email communication, the LDB stated, "British Columbia’s craft beer customers demand access to a wide range of domestic and import beer. In response to this demand, the LDB provides its customers with access to a complete portfolio of beers which includes import."

I agree strongly with consumers having as many choices as possible, but in my opinion, should BC consumers not have access to all their favourite BC craft beers? It really irks me that when I walk down to my local government run store on Commercial Drive I can't find many of the great beers that are brewed in the Greater Vancouver area and that are available in a packaged form. For that matter, I cannot even find all the beers made within 5 kilometres of the Drive, beers that are selling like crazy in the LRS outlets.

The LDB communication also pointed out, "currently, the LDB has listings for 160 beers produced by small and medium-sized BC breweries. In comparison, there are 30 listings for small to medium US craft breweries."

These numbers seem to support that the LDB is giving local, craft breweries a fair shake but consider that in the eyes of the LDB a medium-sized brewery can produce all the way up to 160,000 HL annually, so you can include many breweries that the craft beer drinker would never consider to craft breweries. In fact, with the recent tied house law changes, medium-sized breweries are considered those that have an annual production of over 15,000 HL up to 300,000 HL which is a massive amount of beer and so far removed from the craft scene that it is laughable! 

I am not sure what standard the LDB is using but if it is up to 160,000 you can include Okanagan Spring (10 listings) and Granville Island (15 listings) and if it is up to 300,000 HL, you can include Pacific Western Brewing (16 listings) as well. 

So you really have to take that stat of 160 listings with a grain of salt.

And if you consider that Labbat & Molson have over 60 listings just for their beers, 95% of which are impossible to differentiate taste-wise from one another, the 160 listings for all BC "small-to-medium-sized" breweries looks a little lame. If BC Liquor Stores are feeling the pinch for shelf space and want to offer the best products available to their consumers and, "a complete portfolio of beers," they could cut back on these massive number of listings for large breweries. 

I see no need for Molson Canadian to be available in 18-pack, 15-pack, 12-pack bottles and 30-pack, 24-pack, 15-pack, 12-pack, 8-pack and 6-pack tins on BC Liquor Store shelves.

As you know, this is exciting times for the BC craft beer industry which is experiencing unprecedented growth and success. In their December 2012 Quarterly Market Review (QMR), LDB stats show domestic beer sales for breweries under 15,000 hectolitres are up 24.81% for draft and a whopping 53.36% for packaged product over the same quarter last year and this is despite the fact domestic beers sales are dropping consistently here in BC. In fact, US beer sales are dropping as well, (15.31% by volume, 10.84% in dollars) which seems contrary to the intro to Giesbrecht's talk where it was written, "U.S. craft beers have seen solid growth in British Columbia... and the LDB's report of only having 30 US listings for small to medium-sized breweries.

I also posed the question, "Is the LDB looking to support BC breweries at a critical time of growth for this local, home-grown industry which is providing key employment opportunities in BC during hard economic times and if so, how?"

The LDB stated to me that they do in fact support the BC craft beer industry. 

In their email they stated, "the Province provides preferential rates of mark-up for small breweries. This policy has had a significant impact on the growth and stability of the craft brewery sector in British Columbia which is one of the most vibrant in the country," and I'll have to give them that one. 

But the email went on to state, "In addition, the Province offers craft brewers a very affordable distribution rate if they choose to have the LDB distribute their product. Also, craft brewers are offered excellent display opportunities in BC Liquor Stores throughout the province that raise the profile of their products."

Low cost LDB distribution is brilliant if you brew close to a LDB warehouse where you have to deliver your beer in order for them to distribute it! It is of little use to breweries who are located nowhere near the two distribution warehouses located in East Vancouver and Kamloops.

And as for "excellent display opportunities in BC Liquor Stores...." I don't even know where to start with that one. If you want to see how serious the BC Liquor Stores take promoting BC craft beer, check out Barley Mowat's series posts about LDB's focus on marketing here and here you will get the picture.  

This craft beer boom in BC has everything to do with the breweries producing great beer, which is garnering consumer support, which in turn is causing more and more licensees to realize that BC craft beers are quality and profitable products to sell and has little to do with the LDB supporting the industry that continues to put more and more $$$s in their coffers. 

It would make far more sense to me if the BC Government was hosting buyers and distributors from Washington State and Oregon, trying to entice them to buy BC craft beer and distribute it is their markets. 

This I would see as supportive. 

Or just allow BC breweries to list their beers so they can at least sell in their local LDB Liquor Stores.

Saturday, March 2, 2013

CAMRA BC Launches Save the Growler Campaign

CAMRA BC has launched a new campaign entitled "Save the Growler"  aimed at trying to stop the upcoming increased LDB mark-up on growler sales.

The announcement of the new campaign came literally minutes after I posted  about the subject based on information I had received from some brewery representatives and the LDB. CAMRA BC President, Rick Green wrote in a statement Thursday, Feb 28, "CAMRA BC is strongly opposed to the LDB's misguided interpretation of growlers and has begun to campaign for the rescinding of this tax increase."

 CAMRA Vancouver President Adam Chatburn put all the call for members to sign a petition and to spread the word that consumers must be vocal in rejecting what he called a "tax grab" and wrote an increased mark-up on growlers by the LDB is, "deliberately punishing smaller BC breweries and putting the brakes on the growth of the industry, by increasing the markup on Growler fills."

Green also pointed out that the classification of growlers as packaged product, which means the breweries pay a higher rate of mark-up by the government, is a "bureaucratic attempt to fit a square peg in a round hole," and that "the LDB only seems to be able to treat beer as either draught or packaged," ignoring the unique nature of the growler and its history.

The campaign may also put into the spotlight that the LDB and Provincial Government seem to have created a great amount of confusion as to how growlers should be mark-up and sales should be reported which you can read about here.

Let us hope that this attention put on this issue will help prompt an even larger review of how the LDB and Liquor Control and Licensing Branch are structured and operate.

More on Growlers & Mark-ups: Industry Confusion a Sign of LDB Dysfunction & Need for Review/Reform

It seems that the post I wrote regarding increases to the way growlers are marked up by the Liquor Distribution Branch needs some clarification.

There is confusion, most of which falls on the industry side of things and I find that disturbing as there seems to have been no consistent policy communicated or direction given to licensees on the sale of growlers by the people who are in charge of regulating sales and collecting dollars.

If I am to believe what brewery and brewpub representatives are telling me, and I have absolutely no reason not to, then different people are being advised different things at different times by the LDB.

When I was contacted about the potential increased mark-up, I took it upon myself to ask the LDB what the current mark-up policy was on growlers and if that policy was about to change resulting in an increase in cost to breweries. It took well over two weeks to get any responses to these simple queries and the LDB were being more mysterious and secretive than the Illuminati. No one seemed to have this information, or, if they did, they were unwilling to release it.

But eventually, after making further inquiries about growlers and another issue which I will be posting on the next few days, here is what I received:

  • Currently, the packaged mark-up rate is applied to the first Growler fill and the draught mark-up rate is applied to refills
  • The LDB recently reviewed the application of mark-up on Growlers.
  • 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.
  • The LDB previously applied a packaged beer mark-up rate on all Growler fills and will resume applying that rate in April.
  • The collection of a deposit is no longer necessary.

That is a direct communication from the LDB. Notice on the first bullet it says "currently" and goes on to outline the mark-up as I described it in my first post: first fill is packaged mark-up rate and mark-up on refills is charged at draught rate. It then says that the LDB "previously applied a packaged mark-up rate....and will resume applying that rate in April". 

Seems simple doesn't it?

I have received information from brewery representatives, either directly or forwarded, "clarifying" how the system works and, as I mentioned, all are not being told or doing the same thing and there is no universal, clear policy in place it seems in regards to growler sales and mark-ups. 

I had a few people tell me they were told, by telephone over the past month or so by the LDB, that all growler sales would be classified as refills and that refills would now be charged at the packaged rate but when that change was taking place was not made clear to some. 

I have other information that growlers have been considered "packaged" therefore the higher rate has always been applied and this has been happening for about a year or so. These breweries have been getting charged $.32 more per litre for growler refills compared to some other breweries for some reason and probably did not realize it as they were doing what they were told to do. 

What is clear to me is that this is clear as mud and maybe why the LDB did not want to answer my questions, because they had no clear answer. 

In short, I stand by what I wrote. 

What is also clear to me is that those who were not getting screwed $.32/litre on refills will soon be feeling the pinch of the LDB and will have to make the decision between eating some of their profit to not piss off customers or raise their prices. 

But again it is not even totally clear how much the mark-up will be as it seems there are new mark-up rates coming out in April, but this I have not confirmed. I was notified by one brewery owner who "stumbled" across a document, in the vendor area of the LDB website, outlining the "new" rates, which will be applied in April. No one else, including the LDB, mentioned these mark-up changes so I am not sure what is going on there. I might assume it has something to do with the change back to the PST/GST tax system from our current HST but who knows.

So, there you have it. I do not usually write posts like this defending what I write because I do my research and am careful about what information I put out there. But in this case, some were hinting I was talking out of my ass, but I can assure you, the reason I did not post three weeks ago when I was first contacted about this potential mark-up change was because I was waiting for some confirmation from the LDB. When I received it and the info I had was confirmed, I posted.

So the confusion does not lie with me, it lies firmly with the LDB who quite clearly have not had a handle on how breweries should report their growler sales or who had not clearly defined for breweries how to do so. It is the LDB that approve skus which have prices attached to them and it is the LDB who collect the $$$s so someone there should have known what was going on. How there can be some much confusion about how a product should be marked-up and how sales should be reported is beyond me. It appears the LDB have now come to realize there is disparity and are in the process of making some changes and the changes are not ones that are going to favour some breweries and some consumers.

It is a definite sign of how convoluted, complicated and dysfunctional the current system is. There is need for review and reform. I am not saying scrap the whole system, but there is a need to simplify and streamline and look at what works and what does not.

In regards to growlers, mark-ups and potential cost increases, I guess we will have to wait and see what the meantime, I am going to shift my focus on growlers from the bureaucracy side of things to what should be important - the wonderful craft beer that is inside.