B.C. retools beer taxes for smaller breweries

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Seven smaller breweries in British Columbia are expected to benefit immediately from a new sliding scale for the province’s mark-up on beer sales.

Where the province has previously offered a reduced mark-up to breweries producing 160,000 hectolitres or less — the equivalent of about 5.456 million standard bottles of beer — it will now raise the mark-up incrementally between 160,000 and 300,000 hL.

"The change moderates the mark-up rates in a manner that will help small breweries to grow," the province said in a release Monday.

For example, at 160,000 hL, the mark-up rate is $1.16 per litre for packaged beer and 81 cents per litre for draft beer. For packaged beer, the rate then slides upward by about two cents for every 5,000 hL of production between 160,000 and 300,000 hL. For draft beer, the rate slides upward by about one cent per 5,000 hL.

Previously, at 160,001 hL, a small brewery would be taxed at a rate of $1.75 per litre for packaged beer and $1.20 per litre for draft beer for every hectolitre (100 litres) produced — including the first 160,000.

"This change supports small breweries in B.C. and gives them further incentives to grow," Mark James, owner of North Vancouver-based craft microbrewery Red Truck, said in the province’s release.

"While Red Truck is a small brewery right now, it’s nice to know that as we expand there are fair policies like this in place that will support our successes moving forward."

News coverage following Monday’s announcement zeroed in on one of the seven breweries expected to benefit from the change in the mark-up system.

According to the Canadian Press news service on Monday, Prince George-based Pacific Western Brewing had warned last week it might shut down production and lay off staff rather than eat the higher mark-up incurred from passing the 160,000-hL mark.

The province said in Monday’s release that the change in the mark-up policy follows "consultation with smaller and larger brewers in early 2012."

"While this change is great for Pacific Western Brewery’s expansion and success, on a local level this change helps ensure that hard-working brewery employees from Prince George keep their jobs," Prince George MLA Pat Bell said in Monday’s release.