Peg Beer closure highlights disadvantage Manitoba craft brewers face: Farmery

The closure of Peg Beer is a worrisome development for a craft beer industry that should be fizzing in Manitoba, says Farmery Estate Brewing Company.

Future looks flat without local government help, brewery co-owner says

The Common serves up a selection of local craft brews at the Forks in Winnipeg. (Jaison Empson/CBC)

The closure of Peg Beer is a worrisome development for a craft beer industry that should be fizzing in Manitoba, according to Farmery Estate Brewing Company.

The owner of Peg Beer, a company that brewed beer and served drinks and food in the Exchange, announced Thursday on Facebook the business is closed until further notice. There is no word yet on why the move was made.

Chris Warwaruk says he was surprised and disappointed to hear about the closure. Peg Beer opened in 2016 and was one of the first brew pubs to start pouring pints after legislative changes made taprooms possible. 

"It's a shock," Warwaruk said. "The craft beer industry in Winnipeg should be flourishing, no different than in Vancouver or Calgary or Toronto and even Regina."

Warwaruk and his brother, Lawrence Warwaruk, own Farmery. Along with growing the ingredients to brew their own brand of beer, for about eight years the brothers ran a gastropub in Winnipeg that specialized in craft and imported beer. They closed Luxalune in 2016.

According to Warwaruk, there's high demand in Winnipeg for quality beer even at a higher price. The problem, he says, is growing a local brewing business without many incentives from government.

According to Warwaruk, while other Canadian breweries that sell in Manitoba receive tax incentives and other supports to operate, there aren't similar supports in Manitoba. 
Brothers Chris and Lawrence Warwaruk launched Farmery Estate Brewery in 2012. (courtesy Farmery)

"Lawrence and I, we grow the barley and the hops that we use in our beer. There's not one tax incentive for us to do it. In fact, it costs us more money to grow barley on our farm than to buy it," he said.

"If I was opening up a brewery in B.C. — if I was using local barley, local hops I would see immediate tax benefits."

The City of Winnipeg currently offers no tax incentives to craft breweries. 

While optimistic about his own business, Warwaruk says he has concerns about the Manitoba craft industry as a whole if government does take steps to support it.

Along with tax breaks, other provinces actively protect local beers and make out-of-province Canadian beer more costly, Warwaruk says, creating a "massive" trade imbalance between Manitoba and other provinces such as Alberta.

"When a smaller [Alberta] craft brewery — smaller than Fort Garry, smaller than Half Pints, smaller than Farmery — is able to export into Manitoba and not one of us is able export to Alberta, that's a big challenge, that's a big problem," he said.

Opportunities not barriers

Manitoba's growth, enterprise and trade minister, Blaine Pedersen, said the province is not looking to create barriers to protect Manitoba brewers from companies in other provinces and is instead pushing for freer trade more broadly.

"We believe it's more constructive to help local craft brewers access broader markets to sell their product, rather than turning off the tap to beer from other provinces," Pedersen said in a written statement.

He added a working group, comprised of federal, provincial and territorial officials, is expected to release recommendations July 1 about how to reduce barriers and increase trade in beer and other alcoholic beverages.