Quebec distillers want government to let them keep more cash from on-site sales

Quebec's distilleries are hoping to persuade the provincial government to take a smaller cut of their profits when they sell spirits directly to the public.

Paul Cirka, founder and master distiller at Cirka Distillery in Montreal, says right now the liquor board (SAQ) collects around 50 per cent of the revenue from sales made at the distillery.

That's the same as if a customer were buying a bottle at an SAQ outlet. "They're still taking the lion's share of the revenue," Cirka told CBC's Daybreak.

Along with the SAQ's share, bottles sold at a distillery also face taxes that amount to 25 per cent of the retail price.

That means for every bottle that Cirka sells at the distillery, his company only gets 25 per cent of the revenue.

And that's the case even though the bottles never leave the distillery; they never enter an SAQ warehouse or retail outlet.

Openness from the government

Cirka doesn't blame the SAQ for this situation, pointing out it is the provincial government that sets the rules.

He says the SAQ has been very supportive of Quebec products. But if producers could retain more money from direct sales, they would be able to reinvest those profits to grow their business.

"Any extra money that you can make — you're not going out to buy a Rolls Royce," said Cirka.

On Thursday, Quebec's Economy Minister Pierre Fitzgibbon indicated to reporters that he was open to reviewing the additional markup for distillery site sales.

"We're beginning the reflection process," a spokesperson for the minister said later.

It's only in the last year that distilleries in Quebec have been allowed to sell their products on-site. 

"We were late to the game," said Cirka, whose distillery makes vodka and gin. "We were the last territory that was able to sell directly to the public."

He also noted that Quebec vineyards and microbreweries aren't bound by the same markup rules and are able to offer a lot more to visitors.

"They can serve food. They can serve drinks. They can create a full experience," he said. "We're not able to do that."

In a statement, the SAQ said it is just following a law that stipulates "products sold on production sites must be acquired from the SAQ."

Under the law, distilleries must sell their product to the SAQ and then buy it back, without the product ever actually changing hands.

Then when a product is sold to a client, the SAQ takes a percentage.

The markup was lowered by $1.96 several months in response to complaints from distillers.