It's a challenging time for Canadian brewers
Companies are closing down due to economic problems.
Canadian brewers are complaining about shrinking margins due to rising interest rates and production costs: materials, packaging, taxes and transportation. Because of this, the business is gradually becoming unprofitable and some experts predict that one in ten craft breweries will close in 2024.
Restaurants Canada, an organization representing food service providers (including bars and restaurants) has reported that the industry has seen a 55% increase in bankruptcies in the first half of 2023 compared to 2022. And they express concern that this number could be even higher next year.
"2024 is going to be a really difficult year for many Canadian craft breweries," said Christine Comeau, executive director of the Canadian Craft Brewers Association. "I've heard anywhere between 10 and 20 per cent could look at closures."
She and many other craft brewery owners are calling on the federal government to help alleviate some of the economic pressure by extending pandemic loan payments to businesses and "modernizing the nation's Excise Tax Act."
What about the state?
The federal government insists that they supported small businesses during the pandemic and continue to do so to this day. At issue is the Canadian Emergency Business Account, which involved interest-free loans. After the pandemic, the deadlines for repayments for entrepreneurs were postponed many times. However, the final settlement deadline is due just in 2024.
Excise tax rates on alcohol are also "adjusted on an annual basis to account for inflation," the finance ministry said.
Brewers, however, still feel it's not enough. Business owners in B.C. are reporting severely increased costs due to inflation and the recessionary housing market. For example, Callister Brewing Co. is closing as early as Dec. 31. The reason is a 45% increase in the price of rent. The proposed increase will cost Vancouver's smallest brewery more than CA$ 10,000 per month. For most in the area, such spending will be unaffordable.
