B.C. distillers believe they are being discriminated against because, unlike wineries, they are prohibited from making higher profit margins when selling direct to customers at their distilleries.
"The reason there are so many wineries in B.C. is because the government eliminated mark-ups for garden gate sales in the early 1970s," Island Spirits Distillers owner Peter Kimmerly told Business in Vancouver.
Winery owners who sell a bottle of wine for $25 at their gift shop net back about $21. They often sell that same bottle through British Columbia Liquor Distribution Branch (BCLDB) stores for $30 and, after BCLDB mark-up fees and taxes are subtracted, only yield back $10.
Kimmerly, in contrast, does not get the same tax advantage if he sells direct to visitors at his boutique Hornby Island distillery, which produces Phrog-branded gin and vodka.
A simplified process for him to sell to local retailers would also help the environment, he said.
"If I sell to the Hornby Island Co-op [liquor store], I have to ship the product to Vancouver. It then goes to Victoria and then has to go to Courtenay," he said.
"So, it rides six ferries, is in three warehouses and in four different trucks – all to go 200 yards."
