Changes to the tax code, according to the co-founder of a brewery in Neepawa, will help all the province’s tiny craft brewers, distilleries, and cideries.
Canada Day marks the introduction of a new markup system for alcohol in Manitoba, the provincial government announced on June 20.
Breweries are now subject to four separate levels of taxation in the province, or “tiers,” depending on the volume of beer they produce. There will be two tiers and a lot more space on the cheaper tier as of July 1.
Chris Warwaruk, a co-founder of the Farmery Estate Brewery in Neepawa, stated that when craft brewers increased, they suffered penalties and that there was really a benefit to reducing production.
“The government is still taxing us but on a smaller threshold,” Warwaruk said, “Because we don’t have the volume of sales in the stores anyway. So it’s not like they’re losing money or taking money out of their coffers because we don’t really contribute as much as the big guys anyway. But this helps us get to that level.”
The Manitoba government is supporting the expanding industry and there is a lot of interest in craft manufacturing, according to Municipal Relations Minister Andrew Smith, who made the announcement during a news conference in Winnipeg.
“Beyond contributing to consumer choice, local craft manufacturing contributes to economic growth and provides opportunities for local agriculture, food-processing and the hospitality industry,” said Smith in a news release.
According to a Manitoba Liquor & Lotteries spokeswoman who wrote an email to the Brandon Sun, the province of Manitoba contains 50 small liquor makers, including 40 brewers, two distilleries, three wineries (or meaderies), two cideries, and three blenders/bottlers.
“Of those, 32 liquor manufacturers qualify for reduced markup rates based on their production volumes, methods and ingredient inputs, with one-third of those manufacturers that will benefit from the markup rate changes immediately, and on their continued sustained growth,” said the statement.
Additionally, the government made adjustments to the reporting requirements for small craft producers, which Warwaruk claimed were overly complex, onerous, and comprehensive.
Warwaruk, a former president of the Manitoba Brewers Association and a supporter of purchasing and producing locally, claimed that the government’s changes level the playing field.
“Because we’re not being taxed by the government, the small producers get to keep more of that margin and ultimately be more competitively priced instead of raising prices of small craft beers. And we can pass on the savings to consumers, so the biggest winner is the consumer.”
SOURCE: The Brandon Sun
PHOTO CREDIT: Mike Thiessen/Winnipeg Free Press