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Whitehorse Daily Star: Importing beer from Skagway more complicated than one thinks

Time:2016-12-03 08:09wine - Red wine life health Click:

Star Skagway Importing Whitehorse Complicated

Importing beer from Skagway more complicated than one thinks

Spruce Tip Ale. Chilkoot Trail IPA. Prospector Pale.

By Sidney Cohen on December 2, 2016

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Spruce Tip Ale. Chilkoot Trail IPA. Prospector Pale.

The Whitehorse Liquor Store could be stocking these sumptuous sounding brews and others from Skagway Brewing Co., if not for esoteric importing regulations that inhibit the microbrewery from selling its beers in the Yukon.

The eponymous brewpub located in Skagway, Alaska, is beloved by Yukon tourists coming off rigorous hikes up the town’s many mountain trails. They often return home with a growler or two of the pub’s unique ales.

Considering the popularity of the company’s beer among Yukoners, and with an expansion on the horizon (a second location has been secured on Fourth Avenue, next to the Starfire restaurant), Mike Healy, owner and general manager, thought why not break into to the Whitehorse market?

“We get so many requests from people in Whitehorse,” he said in interview Monday.

“We already get our CO2 and nitrogen from Whitehorse, that’s used in the brewing process and to push our beer through our beer lines, so we’re already making trips up there,” said Healy.

“We also spend a great deal of time in Whitehorse, so it just kind of makes sense.”

Healy figured he could drive the brews into the Yukon himself, or put them onto a transport truck with other goods en route to Whitehorse.

Of course, these things are rarely so simple.

Upon further investigation, said Healy, he learned his beers would likely have to travel several thousand extra kilometres, on barges and trucks that would hit Seattle and the Vancouver area, just to get a relatively small batch of bottles onto Whitehorse Liquor Store shelves.

“It’s absolutely insane,” he said.

Jeff Erasmus is the director of operations at the Yukon Liquor Corporation (YLC), which by law, sources all alcoholic beverages entering the Yukon. He explained that importing intoxicating liquors into Canada is no easy task.

For one thing, he said, there needs to be an “importer of record.”

The standard way alcohol enters Canada is by an importer of record, which is typically a provincial entity or corporation, such as the British Columbia Liquor Distribution Branch or the Liquor Control Board of Ontario.

Though it may not be in possession of the alcohol at the time, the importer of record is the legal owner of the product when it crosses the Canadian boarder, and is responsible for all the duties and taxes owing on the shipment, said Erasmus.

If YLC was the importer of record, a YLC representative would have to drive down to Skagway to pick up the beer and bring it back across the border.

“I can’t just drop what I’m doing and be driving down to there,” said Erasmus, just as he can’t simply fly out to Spain for a case of Granacha.

What’s more, to cross the U.S.-Canadian border with a truck-load of goods, a North American Free Trade certificate would be required to avoid paying import duties, said Erasmus.

He said the YLC doesn’t currently have a NAFTA certificate and doesn’t plan on obtaining one.

Alternatively, YLC could hire a freight company, that has been approved by the Canadian Border Services Agency, to pick up the suds. But as Erasmus points out, it would be inefficient, to say the least, to send a transport truck to Skagway for what would likely be less than a pallet of beer.

Right now, YLC spends about $1.7 million a year on inbound shipping just from within Canada, said Erasmus.

It’s also worth noting, said Erasmus, that as the importer of record, there’s “a huge amount of administrative tasks.”

“Electronic shipping manifests, there’s all the relevant product paperwork, there’s the payment of all duties and taxes owing, and we don’t have the resources from a staffing standpoint, because of how small we are as a liquor jurisdiction, to be able to do that.”

There are other options for importing alcohol – such as enrolling in the Customs Self-Assessment Program, which allows low-risk, pre-approved importers and drivers to bring goods into Canada – but these are either costly, or require a rigorous application process, or both, said Erasmus.

And the Yukon has just two purchasing officers and has less than $40 million a year in annual sales, said Erasmus.

By contrast, the BC Liquor Distribution Board has $3.16 billion in sales and earned $1.35 billion in 2015-16.

Larger liquor jurisdictions have product portfolio managers who only handle the purchasing of red wines, for example, or fortified wines, said Erasmus.

“If you’re doing billions of dollars a year, you can rationalize that, it becomes economical to have those people doing that work,” he said.

All this is to say, it is exceedingly difficult for the YLC to buy directly from foreign producers.

“If you start to think about the number of wineries and microbreweries that there are across North America, there’s hundreds, if not potentially thousands of different vendors and producers that we would have to be purchasing from directly, which creates an exponential increase in the paperwork,” said Erasmus.

“For a team with only two purchasing officers, unfortunately it’s not possible.”

To get around these hassles and still offer a selection of beer, wine and spirits to Yukoners, the YLC has a special board-to-board agreement with the BC Liquor Distribution Board.

There are about 1,300 products on Yukon liquor store shelves at any given time, said Erasmus, and the lion’s share of what’s there, and what’s in bars and restaurants, comes through B.C.

If it’s not from B.C., it probably came through Alberta, said Erasmus.

“We don’t deal with any of the import duties when we buy from B.C.,” he said.

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