E-Malt. E-Malt.com News article: Canada, BC: Big brewers seek government help in competing with craft brewers

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E-Malt.com News article: Canada, BC: Big brewers seek government help in competing with craft brewers
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Lobbyists for Canada’s big, foreign-owned breweries met with the former BC Liberal liquor minister last spring, appealing for his help to stem the erosion of market share to craft brewers, Business in Vancouver reported on December 2.

“The multinational beer companies have been losing market share over the last several years to microbreweries and regional breweries,” said a briefing note for Deputy Premier Rich Coleman before his May 18 meeting with Canada’s National Brewers (CNB). “This loss of share has amplified a number of concerns they have had with B.C.’s beer markup structure and their competitors’ ability to lower the shelf price of products.”

For decades they held well more than 90% market share in B.C., but that has eroded to 80% today.

“Notwithstanding the decline, they still account for the vast majority of sales,” the briefing note said. “The province collects the largest amount of markup from the sale of these brewers’ products compared to the smaller breweries, by a very wide margin.”

Coleman met with CNB president Jeff Newton and vice-president Jeremy Chorney, whose members include Molson Coors, Labatt and Sleeman. Though all three have B.C. breweries, Molson Coors is headquartered in Denver, Labatt’s parent Anheuser Busch InBev is based in Belgium, and Sleeman is owned by Japan’s Sapporo.

Statistics on markup paid by the breweries were censored by the government from the document. It said the beer markup structure since the 1980s has offered preferential rates for small-and-medium sized breweries. The total number of licensed breweries in the province has doubled to 120 last year from 60 in 2010. Total B.C. sales of canned, draught and bottled beer in 2015 amounted to 2.85 million hectolitres, but B.C.’s 60.97 litres per capita consumption was below the national average of 63.34 litres.

The briefing note said medium-sized breweries have been using the preferential markup regime to their advantage in order to make discount beer.

“The BC Craft Brewers’ Guild has suggested that additional assistance from government is necessary to ensure the sector’s continued success,” the briefing note said. “Further assistance will likely result in additional entrants, and it remains to be seen at what point the marketplace will become saturated causing some small brewers to become unviable. Given that beer consumption is static, the success of B.C.’s brewery sector is coming at the expense of the multinationals.”

Coleman had a front-row seat to a scandal involving a medium-sized brewery four years ago. Pacific Western Brewing (PWB) threatened to shut its Prince George brewery in November 2012 when it reached its quota and triggered a higher tax rate. Cabinet gave the company, a frequent donor to the BC Liberals, a tax break worth as much as C$9.5 million the week after PWB gave a C$27,000 in-kind donation to Coleman’s re-election fundraiser. Coleman returned the donation, and the planned tax break was amended.

Coleman officially ceased being the liquor minister when the portfolio was given to Attorney General Suzanne Anton after the 2013 provincial election. Coralee Oakes, a rookie MLA from Quesnel, became the liquor minister at the end of July 2015.

“As deputy premier, minister and as an elected official, Minister Coleman regularly meets with stakeholders from across government,” said Coleman spokesman Paul Woolley.

Woolley did not arrange a requested interview with Coleman and did not tell Business in Vancouver what the outcome of the meeting was. Oakes met later on May 18 with the lobbyists.

Since 2005, PWB has donated C$191,933 to the BC Liberals, which is more than Labatt (C$159,366), CNB (C$153,779), Molson Coors (C$121,257) and Sleeman (C$17,646).


03 December, 2016

   
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