Yukon Party promises vendors a deal on Yukon-made alcohol
In a move that caught Yukon brewers by surprise, the Yukon Party is promising restaurants, hotels and bars a big discount on locally-made alcohol.
The party says vendors could buy from the territory's brewers and distillers directly, bypassing the Yukon Liquor Corporation — and its markup.
Mark Beese, Yukon party candidate in Riverdale North, says this will incite vendors to buy local.
The plan could reduce vendors' costs on local beer by about 23 per cent. Spirits could be sold to vendors at almost half the current price.
"This will help to support the local breweries and distilleries and give them a local advantage," Beese said.
Beese and the Yukon Party's candidate for Pelly-Nisutlin, Stacey Hassard, announced the plan Monday at a pub in Whitehorse.
Hassard says a re-elected Yukon Party government would also invest in a marketing campaign for local brewers and distillers to promote Yukon-made products outside the territory.
Plan could cost territory $1.5 million a year
The Yukon Liquor Corporation is a significant source of income for the territory. An annual report for 2014/2015 puts total revenues near $40 million.
The corporation collects both taxes and what it calls a markup on alcohol.
The markup varies by product. For bottled beer, it's about 23 per cent of total cost. For example $8.34 on a $27.39 case of beer.
The markup on spirits is highest.
A chart from the Liquor Corporation says the markup would account for $13.94 of a $27.90 bottle of liquor, about half the retail cost.
The corporation recently changed its rules on keg beer, now applying a markup of 25 cents a litre. This translates to about $15 for a 60L keg of beer.
In 2015 the Yukon Party government changed liquor rules so that vendors would get a 10 per cent discount over the public's retail price. However, vendors have been paying the same proportional markup on that price, which is applied equally to domestic and imported alcohol.
Local brewer supports plan
Marko Marjanovic, co-founder of Winterlong Brewing Co in Whitehorse, says the Yukon Party's plan would help his business.
It could even lead to hiring a delivery driver.
"If vendors were able to purchase directly from us, we'd have to start hiring someone to help us with that. Because the markup (would be) no longer applied we could potentially sell our beer at a lower cost as well," he says.
Marajanovic sees another advantage to selling directly to vendors: market research.
"When we distribute (our beer) it goes to [the] Liquor Corporation. It's like a black hole," he says. "I don't know what they have in inventory and who's buying it. Selling it to vendors would give us some more feedback."
Winterlong Brewing Co. has a tasting room in Whitehorse. Marajanovic feels the brewery could also qualify as a vendor and avoid paying markup on its own product.
"When we sell a growler from the brewery, the Yukon Liquor Corporation isn't involved at all. Abolishing the markup would make sense since we're handling the product from start to finish."
No consultation with local brewers prior to announcement
The idea gets a more hesitant response from Bob Baxter, co-founder of Yukon Brewing.
He says the Yukon Liquor Corporation provides a valuable service when it comes to distribution, especially to smaller Yukon communities like Dawson City and Watson Lake.
"We're certainly happy that (the Yukon Liquor Corporation) are the ones trucking product to Dawson because of course they're supplying the liquor store but also hauling the product up to licensees. That's a pretty efficient way to move product."
Baxter wonders about the added cost of delivery the policy could put on the company.
Neither Yukon Brewing nor Winterlong said they were consulted prior to the election pledge being announced.
Baxter says "the devil will be in the details" if the idea is indeed implemented.
