‘This challenge is beyond our control’

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This article was published 22/05/2025 (312 days ago), so information in it may no longer be current.

Manitoba brewery closures are a growing concern among some in the industry — and members have renewed calls to change government policy.

“We’re seeing a bunch of breweries right now who are very, very pinched,” said Colin Koop, president of Devil May Care Brewing Co.

Expansion has paused at his Winnipeg company. It’s “not a good time” for hiring or growing, he said.

Over the past few years, Koop and fellow business owners have endured a global pandemic and rapid inflation. Now, amid trade wars, brewers are bracing for higher costs.

Koop joined 20 other Manitoba brewery executives in signing a letter last month expressing their concerns to Premier Wab Kinew. They’re urging a review of provincial beer markups, which increase drink prices.

“We strive to be resilient and adaptable, but this challenge is beyond our control,” the joint letter states. “Without change, the long-term sustainability of Manitoba’s craft beer industry is at risk.”

Manitoba’s price increases are restrictive compared to Ontario, British Columbia and Alberta; they hinder competitiveness and are unhelpful in the economic environment, the brewers argue.

Per the April letter, the signatories produce more than 95 per cent of Manitoba-made beer.

Twenty-five per cent tariffs — or higher — on aluminum cans could be incoming. Canada and the U.S. have placed 25 per cent tariffs on each other’s steel and aluminum. Often, the production chain of an aluminum can spans both countries.

Hops, adjuncts and equipment not found in Canada are also subject to tariffs, impacting local brewers.

“If one day we go to buy cans and they’re 25 per cent more expensive, that money’s got to come from somewhere,” Koop said. “We have to make sure we have enough reserve.

“I think anything that we can do as an industry to get some of that markup back into (our) own hands, that’s a good thing.”

Koop shared his general markup experience: if a can of Devil May Care beer is on local liquor store shelves for $4.25, roughly $1 of the price is provincial markup.

Breweries producing 20,000 hectolitres or less see a total markup of 36 per cent and a surcharge of 10 cents per litre. (A hectolitre is 100 L.)

Lower government markups elsewhere propel companies outside Manitoba to grow, local brewers told the Free Press.

Ontario just slashed its rates. Starting in August, it’ll cut its basic tax rate applicable to local microbrewery-made beer in half to 19.88 cents/L from 39.75 cents/L for non-draft beer and 17.98 cents/L from 35.96 cents/L for draft.

The axing is among a suite of changes affecting Ontario brewers announced in the province’s 2025 budget.

Large multinationals are better positioned to take hits from sudden cost increases — like tariffs — than their smaller competition, the Manitoba breweries’ letter reads.

“A reduction in (markups) can be implemented quickly and would immediately offset the increased packaging costs we are facing,” the letter continues. “(It would) provide relief to local businesses and consumers alike, while ensuring our industry can continue growing.”

A provincial government spokesperson directed comment to Manitoba Liquor & Lotteries Corp., who sets the markup rates.

Markups microbrewers face are much smaller than the total 75 per cent increase seen by large-volume producers, an MLL spokesperson stated. There isn’t a markup for liquor purchased in local brewers’ taprooms and farmers markets.

“The alcohol retail, pricing and distribution model differs from province to province and, as such, direct comparisons are difficult,” the spokesperson wrote in an email. “(MLL) believes that Manitoba offers a very fair and supportive operating environment for local craft liquor producers.”

In 2014, two craft brewers operated in Manitoba. More than 50 craft liquor producers call the province home now, the spokesperson highlighted.

MLL evaluates its micro producer program annually and considers feedback from craft producers, the spokesperson added, noting the Crown corporation made a 20-point support strategy aimed at fostering growth last year (following consultations with industry).

Aligning Manitoba beer markups with other provinces would cost government approximately $1.26 million in revenue, an October 2024 economic impact assessment commissioned by the Manitoba Brewers Association reported.

The association did not pen the letter to Kinew. However, it supports “all efforts to collaborate with the province, and the (MLL), to help grow the small producers in Manitoba,” director Brad Chute wrote in a statement.

In 2023-24, Manitoba held 26 brick-and-mortar breweries and another 12 contract breweries. The sector contributed $14 million to the provincial GDP directly and another $10 million indirectly.

Industry members have been lobbying for lower markups for years.

gabrielle.piche@winnipegfreepress.com