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Good things brewing

Beer firm's warehouse now customs-bonded

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Back in 1991, when Winnipeg-based WETT Sales & Distribution Inc. was formed, it had two employees and was the first independent beer distributor in the country.

Today, it has 24 workers during the peak summer months and is now the only independent beer distributor in the country with a customs-bonded warehouse.

Operating out of a 90,000-square-foot warehouse in a secret location in the CentrePort Canada Inc. footprint (the company does not like to advertise the fact it has a warehouse full of beer) WETT Sales is the third customs-bonded warehouse CentrePort Canada has helped establish, the other two choosing not to disclose that development.

"The need to provide fresh beer in the right quantity in the right location is not as easy as you think," said Bill Gould, WETT's founder and president.

"It requires bonded areas to be created."

Customs-bonded warehouses doesn't mean the distributor can avoid taxes, tariffs or duties, but just defer those costs until the point of sale.

As the Manitoba and Saskatchewan sales agency for such Canadian brands as Moosehead from New Brunswick and Fernie Brewing Company from B.C. and imported brands such as Samuel Adams from Boston and Tennent's Lager from Scotland, it's not always able to take full container-load shipments because of the size of the market.

That means local supply can sometimes be constrained.

Having a CBW means WETT Sales can potentially expand its product portfolio and encourage its customers to ship greater volumes, because it can receive shipments and then not have to worry about covering taxes and duties until the product is sold.

"It will allow us become a hub for brands to be shipped to Manitoba Liquor Marts, hotels and licensees as well as provincial liquor jurisdictions in Canada and the U.S.," Gould said.

Manitoba Liquor & Lotteries operates its own bonded warehouse, but Robert Holmberg, the Crown corporation's vice-president of liquor operations, said having an independent operation like WETT's will mean greater availability and perhaps a greater variety of beer brands for Manitoba consumers.

"Having a customs-bonded warehouse allows people to get product to market faster," he said.

Gould said the impact of his decision to invest the resources to carve out 15,000 square feet of his warehouse for a secured CBW will be felt in the long term.

He hopes it will help him encourage more suppliers to enter this market and also become a hub to distribute to other jurisdictions.

Diane Gray, the CEO of CentrePort, said getting the free-trade-zone status was to help encourage companies to come to CentrePort but also assist in growing the ones that are already there.

"This will help WETT Sales grow its business, create jobs and take advantage of new market opportunities," she said.

Gray characterizes the usefulness of a CBW as a "cash-flow-management tool."

"These kind of cash-flow advantages can ultimately impact the bottom line," she said.

Gould is in discussion with suppliers to ship new product such as more Carlsberg varieties as well as greater volumes.

"The beer market is expanding," he said. "We need to promote our brands and to promote beer in general. People are looking at wheat beers, radlers, ales and big IPAs (India Pale Ales). Those are the types of beer that this type of operation allows. It will create greater variety for the consumer both here and in the rest of the country."

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 4, 2014 B6

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