By Chad Klassen

Kamloops craft brewery to save $20,000 a year under new regulations

May 25, 2016 | 4:38 PM

KAMLOOPS — On brewing day at Red Collar, they’re making cherry sour. It’s a new seasonal brew that has quickly become the brewery’s most popular beer, selling out 60 cases right away. 

But the amount of beer brewed and bottled at the downtown Kamloops facility isn’t enough to compete with the big breweries.

It’s why the B.C. government has introduced new regulations to reduce the mark-up paid by smaller craft breweries. 
 

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“Brewing a batch of beer is relatively the same, regardless of your size,” says JP Lancaster from Red Collar. “You’re going to put the same amount of labour into it. However, your yield is drastically different, so having this distinction for a smaller business like our, that gives us more margins at the end of the day.”

Under the new regulations, Red Collar, which produces around 3,000 hectalitres, or 300,000 liters of beer per year, would see the mark-up drop from $0.55 to $0.40 per litre.
    
“We can make more off a bottle, as opposed to being in the same mark-up category as all these breweries that are producing 10, 20, 30 times more than us,” says Lancaster.
 
The brewery estimates it’ll put another $20,000 in their pocket every year. It may seem like a small amount, but it’s huge for an operation like Red Collar.  

“We will have a better bottom line, and that gives us flexibility to promote our brand.”

But brewmaster David Beardsell says as a new brewery, Red Collar is at a huge disadvantage not being distributed through the Liquor Control Board.

“The ones they do distribute for get a great rate,” says Beardsell. “Every is very inexpensive, about $0.82 for a case. For us to distribute, it’s about $5, so there’s an enormous benefit to the breweries that get that distribution.”

Nonetheless, this move is a clear indication of how the craft beer industry is booming in B.C., with an estimated 120 craft breweries, and more set to open soon. 

“It is great that this sector, once dominated by big business, has really reverted back to the local mom and pap type. So it’s great the government is willing to help us out.”