As politicians debate price of Red Racer IPA, even the brewer doesn't know how much it will cost on April 1

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      It's not every day that a craft beer occupies the spotlight in the B.C. legislature.

      But this week, Central City Brewers + Distillers' popular Red Racer IPA became the subject of heated debate between NDP MLA David Eby and Attorney General Suzanne Anton, who oversees B.C.'s liquor reforms.

      The two politicians publicly squabbled over whether the price of this beer was going up or going down.

      I contacted Central City's vice president of marketing and sales, Tim Barnes, to find out who was telling the truth about Red Racer IPA.

      Like any good marketer, Barnes started the conversation with this comment: "We're really happy that everybody is talking about our beer!"

      He then explained that even he didn't know if the price of Red Racer IPA will go up or down on April 1 as a result of the government's liquor-policy reforms.

      That's because the Liquor Distribution Branch hasn't revealed how much it will mark up Central City's beer as part of the new system. 

      "I think the biggest issue with the transition is transparency," Barnes said. "There's no transparency on what the margin will be for brewers."

      As a result, the craft-brewing industry will sell its products to the LDB for April and May without knowing what the retail price might be.

      "We're in the process of trying to understand it," Barnes explained. "I'm not upset at Suzanne Anton or any of the folks who are trying to make this work. But we, as a brewery, had to make assumptions on the markup without really knowing it. So we took a shot at it. We did come down a bit on our net price."

      Tim Barnes says craft brewers are still waiting to hear how much the Liquor Distribution Branch will mark up the price of beer.

      The brouhaha started on March 10 when Eby, the Opposition critic for liquor policy, declared that 5,300 products would see price increases as a result of a new regulatory regime starting on April 1.

      Eby cited Red Racer IPA as several craft beers in a B.C. Liquor Distribution list of beverages that will become more expensive.

      To that, Anton fired back that Red Racer IPA would be going down in price by 12.6 percent.

      The following day, Eby questioned the minister's claim, noting that she had failed to mention that the government is eliminating a 16 percent wholesale discount for private liquor stores.

      Then the NDP MLA condemned Anton's "new beer tax", noting she still hasn't announced the government's markup.

      Barnes acknowledges that without knowing the markup, his company might have come in too low, which means consumers will get a deal for two months. But he said the company had to be cautious in pricing its product because if the markup were too high, the price of a six-pack would exceed what come consumers would be willing to pay.

      "It's a very thin margin structure for craft beer," he noted.

      Comments

      1 Comments

      The Reverend

      Mar 15, 2015 at 12:55pm

      "Barnes acknowledges that without knowing the markup, his company might have come in too low, which means consumers will get a deal for two months."

      Please. There is no such thing as consumers getting a "deal" on anything in BC. Especially liquor. Or car insurance. Or gasoline. Or milk. I digress...