Victoria – The Liquor Distribution Branch (LDB) is implementing a new contract-brewing model based on feedback and recommendations from industry.
In response to concerns raised about the increasing use of contract brewing, and the need to ensure transparency of this practice in a brewery’s reporting volumes, the LDB consulted with industry in October 2018 on a model that would include contract brewed amounts in annual worldwide production reporting. The consultations included the 150 members of the BC Craft Brewers Guild who support the new contract brewing model.
For the 2019 calendar year, each brewery will track and report the following volumes to the LDB in early 2020:
- the total volume of beer manufactured within the reporting brewery’s own production facilities for itself (same as current);
- the total volume of beer the reporting brewery contract manufactures for other breweries and/or unlicensed third parties (new);
- the total volume of beer any other breweries contract manufacture for the reporting brewery (new);
- the annual worldwide production of any affiliated breweries (defined as 10% or more common ownership, same as current); and
- the annual worldwide production of any breweries that the reporting brewery has a branding agreement with (new).
Volume reports will be reflected in the markup rates assigned to the brewery. These changes ensure larger brands pay the appropriate rate of markup on contracted and internal production, while allowing for smaller breweries to engage in a reasonable amount of contract brewing without a significant increase in their markup. This announcement also aligns the LDB’s markup rate determination with the 2017 changes to the Liquor Control and Licensing Act, which introduced and permitted contract brewing.
The LDB will monitor the effectiveness of the new model to identify if any additional revisions are required.