Craft Distilleries in Ottawa or Outaouais [General]

2015 Dec 29
I thought I would start a new topic for this which we began in the Crown Royal topic . . .

Great article on Craft Distilleries in Ottawa, and the hurdles they have to overcome:

ottawamagazine.com

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Wine & Spirits
FOOD & WINE: High Spirits — Ottawa is still crazy
BY Travis Persaud

BY TRAVIS PERSAUD

The article was originally published in the April 2015 print edition of Ottawa Magazine

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But those wanting to start a distillery still have some significant hurdles to overcome, especially the requirements specifically created to keep out small distilleries. For example, in order to open an onsite retail store, a distillery must have either a 5,000-litre still (imagine a cauldron big enough to hold three grown men) or a continuous still capacity of 150 litres of alcohol per hour.

Ottawa native Charles Benoit, co-founder of Toronto Distilling Co., says the first option simply does not work for craft distilleries. “We have a 500-litre still, and that’s a good size for us,” he says.

Benoit, a lawyer by training, found a way to achieve the second option by feeding the still with absolute alcohol to meet the hourly requirement. It’s a creative work-around that Ottawa’s North of 7 also used to get their business started.

Once up and running, taxes are the next big hurdle.

“We pay eight to 14 times the tax and duty that breweries or small wineries do in Ontario,” says Greg Lipin, co-owner of North of 7. “[But] we have the Ontario Craft Distillers Association that’s pushing for reforms from all levels of government.”

So exactly what do wineries and breweries pay in excise tax, compared with distilleries?

It’s based on alcohol percentage and the volume output of the winery, brewery, or distillery.
Made-in-Ontario liquor, created using craft distilling processes. Here, North of 7’s Leatherback Rum. Photo: Jamie Kronick

In general, wineries pay $0.620 per litre; breweries pay $0.312 per litre. Spirits, however, are taxed at a whopping $11.696 per litre.

“Then it’s the provincial markup,” Benoit says. “They don’t care about the alcohol content. They just mark up what you charge them. Our wholesale price is $12 a bottle — their markup is 140 percent.” By comparison, wine is marked up by only 70 percent.

Markup is something that every craft distillery has front of mind.

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2015 Dec 29
Excise Tax: Looks like the tax is on the alcohol in the beverage. Should the cost of a bottle of booze cost the same as a bottle of wine ? or beer ?

What are they asking for? ... a tax break just for craft distillers or all distillers ?

Provincial Markup: So are they going to join the ASSOCIATION OF CANADIAN DISTILLERS/ASSOCIATION DES DISTILLATEURS
CANADIENS and lobby for change ? ... or move to British Columbia where there is "... no provincial liquor tax or duties for small distilleries that source the majority of their agricultural inputs from within the province."

My take ? Compete (it's a level playing field wrt tax and markup) ... or get out. The micro/craft breweries are a fine example of how it can be done.


2015 Dec 29
Hummmm do they have to be legit?

;)

2016 Jan 29
There is a groupon for a distillery tour and tasting at North of 7

2016 Feb 21
A few of us are going to North of 7 distillery tour Sat Feb 27 at 5pm.

I have sent in the reservation request and hopefully it will get confirmed next week.

2016 Dec 5
www.cbc.ca

New taxes make it hard for craft distillers?

2016 Dec 5
"On a $40-dollar bottle of gin, the province and the LCBO will get the majority of the money, said Smiley. Once the cost of overhead, bottling, equipment, ingredients and marketing are taken into account, he added, the distiller will be lucky to profit two dollars on the $40 bottle. "

Idiocy.

2016 Dec 6
That's a 5% profit margin! Still better than the average restaurant...

The real loser here is the consumer, although since alcohol is 100% a luxury item with a real cost to the health care system, it's hard to condemn heavy taxation. If only our income and property taxes were lower to compensate!

2016 Dec 6
Warby,

I think obesity has a larger financial impact to our health care system than hootch. Yet another example of our misguided government. Yet we sure dont heavily tax all of the shite food people are eating these days. But is makes for a great headline.

K

2016 Dec 10
What Krusty said - given the growing epidemic of obese, diabetic, sugar addicted kids, it's soft drink makers that should be earning a 5% profit margin, not craft distillers. This kind of taxation stems from the hastily written legislation that was put in place in 1927 when the federal government repealed Prohibition, and we're still largely operating under the same rules despite the fact that society at large has changed considerably in the past 90 years.

PS: Austria, Germany, France - there are *thousands* of farm and craft distilleries operating in these countries. Please explain to me how Canada fares better in terms of health than they do.