Raising a glass may get bitter as Sask. breweries face tariffs

Raising a glass might get pricier as Saskatchewan breweries brace for tariffs.

On Tuesday, the trade war kicked off after US President Donald Trump imposed the long-awaited 25-per-cent tariffs on Canadian imports, and a 10 per cent levy on Canadian energy.

Shortly after, Canada’s Prime Minister Justin Trudeau also announced 25 per cent retaliatory tariffs on $155 billion of American products, with plans to cover another $125 billion in U.S. goods in 21 days.

Now with tariffs on tap, brewery operations could be disrupted by import taxes on certain products, market instability, and job losses.

“We can assume there’s going to be a lot of chaos and a lot of churn,” said Mark Heise, the president and CEO of Rebellion Brewing Company in Regina.

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Heise said his biggest concern is the levy’s effect on the current supply chain and the cost to produce beer.

The small business owner said he’s been able to source products like aluminum cans, plastic and cardboard domestically rather than purchasing them from the US.

But the challenge lies in finding a supplier for a key ingredient in beer, hops.

While hops are grown throughout the world, including Canada, Heise said the bulk of it comes from Yakima Valley in Washington State.

“It’ll be interesting to see how that all goes,” he said.

During record inflation, Heise said the imposed tariffs could drive up prices, ultimately affecting consumers.

“It’s not good for small businesses that are still just trying to survive and recover from the last five years of absolute chaos,” he said.

“If you ask me to use a crystal ball, things are going to cost more, which sucks.”

Heise said it will be more of an uphill battle for smaller breweries because large corporations have more resources and the ability to adapt and profit.

“It’s an absolute grind to you know, I think we make an outstanding product and outstanding service. We are not on the scale of big, large multinational breweries that throw their weight around,” he said.

“It’s fun, you know, being the David to the Goliath, but it’s also absolutely exhausting.”

Like most Canadian breweries, Heise said his business does not export to the U.S. because of the high taxes already on alcohol.

Heise encourages consumers to support local and independent businesses who source their ingredients and supplies from Canada.

“There’s 1200 independent, Canadian-owned breweries across Canada,” Heise said. “I’m pretty sure Canadians can choose just one, instead of those corporate giants.”

Orders coming in “fast and furious” for Lumsden distillery amid Canada-U.S. trade war

Things are getting busy for a distillery in Lumsden after the province announced it’s pulling American liquor off SLGA shelves and halting its sales to stores.

Last Mountain Distillery Owner Meredith Schmidt said this move is giving them a “great opportunity” to show people the liquor made here in Saskatchewan. She is hopeful they will get some new customers out of the Made in Canada push.

She said on the Greg Morgan Morning Show that even over the last week, orders have been coming in “fast and furious” from stores.

Listen here:

GREG MORGAN: What do you think of the Premier’s moves yesterday?

MEREDITH SCHMIDT: It’s a great opportunity. It’s nice to see that support and the call to purchase Saskatchewan alcohol. It’s definitely an opportunity for our industry to show everybody what we have. Hopefully, we will get some new customers out of this.

Were you hoping to hear a little more than what he offered? Is there more to it that he could have done?

SCHMIDT: We’ve heard from Manitoba and B.C. now there’s talk about interprovincial trade barriers coming down for direct-to-consumer sales. We’re hoping that announcement is also on the way, just to be able to advertise to the rest of Canada that we can ship to them.

In other words, move your product from West to East?

SCHMIDT: Yeah absolutely, just to be able to sell directly to customers.

It would be nice to see other things on the federal level. I’m hoping that this encourages the federal government to look at our excise tax, or —Bin tax.

Spirits are the only industry that hasn’t seen any relief from the excise tax, so we pay a huge amount. That’s why Canadians see more expensive prices on the shelves for Canadian alcohol because of our federal excise tax. I’d love to see some movement on that, on the federal front, but on the provincial front. Just to take down those trade barriers, to be able to let us sell directly to consumers across the country would be amazing.

Considering how well you’ve grown your business on a large commitment to sourcing locally for your products, how do you do that?

SCHMIDT: It’s easier and we feel better about buying directly from Canadians, if not Saskatchewan, so ingredients that go into our products and our whiskeys, are made from Saskatchewan grain. Whether that be wheat or rye. There are a lot of great craft whiskeys in Canada. I think bourbon is the big American product that people are going to miss, but just because it’s not made in the U.S. doesn’t mean that it can’t taste like bourbon. We can make a sour mash with corn here just as well as they can in the States. So you have to just look for different names right when you’re looking on the shelf.

What’s the difference — for those who may not know — between wheat whiskey and the American counterparts that are disappearing off shelves now?

SCHMIDT: Canada is typically known for rye whiskey, which can be a rye grain, although rye on the bottle does not necessarily — in Canada — mean that it’s made with a rye grain.

But rye gives a spicier flavour to your whiskey, whereas a bourbon is made with a sour mash, and doesn’t have to be aged as long.

We like to play around with lots of different aging techniques, but a sour mash and corn are usually 50 per cent of the mash bill in bourbon, so corn gives a lot of sweeter flavours versus wheat or rye, or malted barley is usually associated with a scotch. Those techniques are typically done in those regions, like Kentucky for bourbon and Scotland for scotch. But that doesn’t mean we can’t replicate it here.

With fewer American products on the shelves, will liquor stores now locally be calling on companies like yourselves?

SCHMIDT: Absolutely. Even in the last week, everybody’s known this is coming and we’ve seen orders coming in fast and furious. I think people have been prepared for this. Our retailer partners have been preparing for this and they’re starting to put local front and center to help the consumer find exactly what they’re looking for, which is great Saskatchewan alcohol.