PCs promise to let brewers sell on-site drinks without steep government markups

Manitoba's craft breweries and distilleries will be able to keep more cash from sales they make on-site if the Progressive Conservatives are re-elected next week.

Liberals and NDP slam promise, point out cut to Craft Liquor Opportunity Fund

At Patent 5 Distillery, Progressive Conservative Leader Brian Pallister pledges to remove the markup on alcoholic products that are produced and sold at the same location. (Ian Froese/CBC)

Manitoba's craft breweries and distilleries will be able to keep more cash from sales they make on-site if the Progressive Conservatives are re-elected next week.

PC Leader Brian Pallister promised to remove markups for beer, spirits, cider and wine on products that are brewed or distilled and then sold for drinking on site.

"This exemption will encourage local producers to expand their operations, to open a taproom or a tasting facility at their location to create new jobs, to create new tourism opportunities and to help us grow a vibrant local economy," Pallister said Monday afternoon at Patent 5 Distillery in the Exchange District.

Brock Coutts, one of the owners of Patent 5 Distillery, said an exemption on the markup would allow him to make more money off of the on-site sales he makes. Right now, a huge markup gets added onto his products he makes and sells for consumption on site. (Walther Bernal/CBC)

Brock Coutts, one of the owners of Patent 5, one of two craft distilleries in Winnipeg, said the promise is significant and would allow him to hire two new staff members and potentially become profitable quicker than originally forecast.

'Going to help every distiller' 

He said it would allow him to make more money from on-site consumption sales of spirits such as gin and vodka, which account for 10-20 per cent of his business, while the rest of his revenue comes from sales at Manitoba Liquor Marts.

"It's going to help every distiller to the point that I think in the next two years you'll probably see at least five new distillers because of that reduced reduction in markups," said Coutts. "It's a fantastic thing for the industry."

"If I sell the product directly from my tasting room should there be a markup on it? They didn't distribute it, they didn't retail it, they didn't wholesale it," Coutts said.

Estimated 16 businesses will benefit: Pallister

Micro-distilleries currently face steep markups on their products.

For spirit sales, there's an 85 per cent markup that puts about $20 a litre into provincial coffers, for example. Pallister said the goal is to help make the industry more competitive which he said currently lags behind Saskatchewan, Alberta and B.C.

He estimated 16 businesses would be eligible for the markup exemption.

Pallister estimates 16 businesses will benefit from his commitment. (Ian Froese/CBC)

Coutts said it's difficult to compete with distilleries in other western provinces because they have looser rules that let them make money at home and export their product out of province.

"We're having trouble making money in our own province so now the playing field is equal."

Liberal Leader Dougald Lamont slammed Pallister's promise pointing out the Manitoba Craft Liquor Opportunity Fund, which was intended to help local craft brewers get off the ground, was killed under his government.

"This is just the latest in a series of reversals by this government where they are trying to make up for damage they have done — in this case, cancelling a successful program that helped Manitoba brewers and distillers start their businesses," Lamont said in a statement.

Pallister refutes debate criticism  

The NDP, meantime, had a similar criticism of Monday's promise.

"This is typical of Brian Pallister. He cut supports to the craft brewery industry three years ago. Now he would have us believe he supports it," said campaign spokesperson Emily Coutts, who is not related to Brock.

Manitoba NDP Leader Wab Kinew has been vocal with criticism on Pallister only attending one election debate so far and failing to commit to more. (Austin Grabish/CBC)

Pallister was also asked Monday about criticism from his NDP opponent Wab Kinew, who has been vocal about Pallister only attending one election debate so far and failing to commit to any others.

Pallister said by the end of the day Tuesday he'll have visited 50 out of Manitoba's 57 election ridings himself.

"We've actually already run the most ambitious and energetic leadership tour and campaign in the history of the province of Manitoba," Pallister said.

"I don't expect the people of Manitoba to have to come to me like Mr. Kinew does."

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  • We initially reported that Patent 5 is one of two craft beer breweries in Winnipeg. In fact, it is a craft distillery.
    Sep 03, 2019 10:39 AM CT

With files from Ian Froese


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