B.C. Craft Distillers Say High Markups Keep Their Products Off Liquor Store Shelves

With U.S. alcohol removed from B.C. Liquor Stores in response to the escalating trade war, local craft distillers are calling on the province to level the playing field by reducing markups and allowing more homegrown spirits on store shelves.

Tyler Dyck, CEO of Okanagan Spirits Craft Distillery and president of the Craft Distillers Guild of B.C., says current government policies make it too costly for most craft distilleries to sell their products in B.C. Liquor Stores, even as demand for local alternatives grows.

“We’re saying if it’s good for the goose, it’s good for the gander,” said Dyck. “You cannot discriminate based on grape versus grain. We’re just looking for parity. We’re looking for fairness.”

High Markups and Unequal Treatment

Dyck says that B.C. wineries benefit from preferential treatment through the Vintners Quality Alliance (VQA) program, which subsidizes sales of local wines in B.C. Liquor Stores.

For example, a VQA winery selling a $45 bottle of wine to B.C. Liquor Stores would receive about $22 after markups. A craft distillery, however, would only get $12-$13 per bottle due to steep provincial markups, often making retail sales financially unsustainable.

Alex Hamer, founder of Artisan Distillers Canada, says that economic pressures are already forcing some distilleries to close, and these pricing policies only add to their struggles.

“We happen to have a lot of shelf space right now. They’ve just removed all of these American spirits,” said Hamer. “But craft distilleries can’t afford to be in B.C. Liquor Stores because they’d lose money on every bottle.”

Call for Fairer Policies and Market Access

Currently, B.C. craft distilleries face restrictions that don’t apply to wineries. To qualify as a craft liquor producer, a distillery must:

• Source 100% of ingredients from B.C.

• Produce no more than 100,000 litres of spirits per year.

Distillers who exceed this cap face steep financial penalties, a rule that Dyck argues stifles growth and limits their ability to expand production and compete with larger producers.

“There is no cap for wineries, and there shouldn’t be,” said Dyck. “Why cap something that powers B.C.’s economy and creates jobs? It makes no economic sense.”

Government Response

The B.C. Liquor Distribution Branch (LDB) says that all distilleries, regardless of size, must go through central distribution to sell in B.C. Liquor Stores and are subject to a wholesale markup of 124%, which is reduced for higher-priced products.

A spokesperson said distillers can sell directly to private liquor stores and bars without markup, but did not address why VQA wineries receive different treatment or how B.C. Liquor Store sales compare to private retailers.

“The LDB works closely with B.C. manufacturers and industry associations to discuss shared industry issues,” the spokesperson said in a statement.

Industry Uncertainty Amid Trade War

Hamer says that despite rising interest in local spirits, some distillers are on the verge of shutting down due to rising costs and flat sales. He recently canceled the annual B.C. Distilled festival after receiving calls from distillery owners who could no longer afford to participate.

“This was supposed to be a time of opportunity,” he said. “Instead, we’re being priced out of our own market.”

With B.C. urging consumers to “buy local” in response to Trump’s tariffs, distillers say now is the time for the province to reform its liquor policies and give local craft producers a fair shot at success.