Share This Blog

Some Saskatchewan Policy Musings

Last week, Bev Robertson, leading man at Bushwakker Brewpub in Regina, let go a classic rant in their newsletter, Wakker Weekly, about the Saskatchewan Liquor and Gaming Authority (SLGA) and their recent review of beer mark-up rates. You can find the newsletter here – the rant starts on page 3 [EDIT: Apparently the link has been broken. Here is a permanent link from their Facebook page - thanks to Mark for finding it].

Before getting into the topic of Robertson’s rant, I want to acknowledge that I don’t write about Bushwakker much on these pages, despite the fact that it has consistently been one of Canada’s best brewpubs for years. This is not because of some odd vendetta or dislike, or even omission. Instead, it is a combination of the fact that I don’t get there much (in fact I have only been there once – my loss), and that the beer is only available on site, restricting accessibility (the latter is the same¬† reason Brewster’s doesn’t get much ink on these pages). Such is the challenge of brewpubs – they only make news when something happens OUTSIDE their premises. Such as Bev’s rant.

Moving to the rant, he chastizes the SLGA for deciding to leave their mark-up rates as they have been for years. And I get why he is pissed off about that. Bev has two particular beefs in the rant. First, he is unhappy that the government retained the threshold for the lowest mark-up rate at 5,000 Hl, which is a VERY small amount. Second, he grumbles about lethargy at the Special Order desk of the SLGA – the section responsible for bringing in one-time beer. The article does seem to suggest that Bushwakker and others in the Saskatchewan beer industry don’t necessarily see eye to eye on the policy. I will avoid picking sides, as I simply don’t have enough information about the situation. However, the article is an interesting glimpse into how Saskatchewan handles beer policy.

Bev is a bit unclear about what the rules are, so I tried to research what the provisions are Рunfortunately without a whole lot of success (man, that SLGA site is user unfriendly). This is what I think the rules are. For breweries producing less than 5,000 Hl, the rate is 95 cents per litre for bottles and 64 cents per litre for kegs. The middle rate is $1.35/litre and the highest rate paid by the big boys is $1.65. I could not find the threshold for the second level, but assume it is in he 100  to 200 thousand Hl range. For brewpubs (and I think direct sales by breweries) the keg rate is 17.15 cents per litre, but I could be wrong about this one as the regulation is very unclear. Maybe someone in Saskatchewan can clarify the rates.

Regardless of whether I am right on the details, two things jump out at me. First, in comparison to Alberta, the mark-up rates are quite high and, particularly, the reduction for small breweries relatively small. Second, the threshold for the first tier of mark-up is surprisingly low – 5000 Hl is not a lot of beer in anyone’s books.

Speaking only for myself, this revelation helps me understand better why Saskatchewan may lag behind other provinces in terms of craft breweries. Of course, its small population is also a barrier, but combine a small market with fairly onerous mark-up rates (at least compared to neighbouring Alberta) and you have a fairly steep hill to climb to get a brewery off the ground in that province.

Since the review is recently completed, we can also anticipate that changes will not be soon coming to the flat province. In the meantime, try to drink some Paddock Wood and if in Regina stop by for a pint at Bushwakker.

 

5 comments to Some Saskatchewan Policy Musings

  • Bob

    My last pricing structure book is dated as effective April 1, 2012. I think it is still current.

    They have 3 tiers, microbrewery at <5,000 HL, regional at 5,001 to 200,000 HL, then national at over 200,000. And, we agree, 5,001 HL is pretty small to be called regional.

    The big problem is the markup differences. For bottles and cans, the rates (per litre) are $0.957, $1.783, and $1.933 for the three tiers. So, once you hit that gaudy level of 5,001 HL, you jump to 85% of the way to the full, big guy markup (from an advantage of $0.976 per litre an advantage of $0.15 per litre). This advantage a 5,001 HL brewer over Molson ($0.15 per litre) is pretty darn paltry.

    For draught beer it is not much different, the 3 markup rates are $0.641, $1.27, and $1.42. So, the minute you hit 5,001 HL you are 81% of the way to full markup, and your advantage drops from $0.779 per litre back to that extravagent $0.15.

    A few years ago the SLGA president was in our neck of the woods for some sort of meeting and we cornered him on their very low microbrewery level. He said it was good to know, he would go back and have a look at. Obviously he did not look real hard….

    You hit the nail on the head, this is not good for the Saskatchewan beer drinker in terms of attracting beer from the surrounding provinces, and it is not going to entice anyone to build anything in the province. Unless you feel that, once you build it, you have the political capital to get the limits changed.

    • beerguy

      Thanks a million, Bob for that information. Very helpful. Those rates don’t include various other charges, such as the “high alcohol surcharge” of $1.18/1.18 litre (go figure on that) on all beer above 6.5% alcohol, an environmental surcharge and it looks like imported beer pays a service surcharge as well (again, I think – it is quite the convoluted policy).

      Yikes!!

      Jason

  • Brad Goddard

    The state of affairs in SK–the wildly expensive mark-ups, and the laughable tiers–has the same fingerprints on it that we’re seeing here in Alberta. Indeed, it’s the same fingerprints we see on most beer legislation across the country. As we’ve found out, nearly a day late and a dollar short, the need for a craft brewers lobby effort–similar to Ontario–is great. We don’t have to spend the big bucks that the Big Boys spend; we just need to tell our story, and point out the economics of our category.

  • Just an FYI that the original PDF linked in the column is no longer valid (it changes every week). They did however recently post it on their Facebook page here: http://www.facebook.com/#!/notes/bushwakker-brewing-company/our-response-to-the-recently-completed-policy-review-by-the-saskatchewan-liquor-/450375805000362

  • Bev states in his rant that SK has lost atleast one new microbrewery development due to their incomprehensible laws. Well you can add another one to that list. Cedric and I spent a year and a half scratching our heads in Saskatoon trying to figure out why the SLGA had put a moritorium on new brewpubs and refused to speak with us about our project, the Shiny Penny. We finally said screw it and moved to BC. 8 months into a new craft brewery and we are already expanding to meet demand. Oh and we’ve brewed 1000HL already this year….8 months in.
    Chloe

Leave a Reply

  

  

  

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>