Q&A: What opening interprovincial alcohol trade could mean for local craft brewers

Federal and provincial governments have agreed to ease restrictions on the sale and distribution of alcohol across the country. 

The move is part of a host of changes being worked on by the federal, provincial and territorial governments aimed at adding $200 billion to the Canadian economy while it faces ongoing turbulence from U.S. tariffs.

To find out what opening trade barriers could mean for local producers, London Morning host Andrew Brown met with Dave Reed, the owner of Forked River Brewing Company.

The following has been edited for length and clarity:

Andrew Brown: How does it currently work when it comes to buying and selling beer, wine and spirits from other provinces?

Dave Reed: We get people coming into the brewery, they have a great time having some drinks, and they're like, "How can I send something to my cousin in Winnipeg?" And we have to tell them, "Sorry, can't do it." They look at you like, "Why can't I mail a six-pack to my brother?" And there's just no good answer.

AB: So the answer to that is simply that you can't do it?

DR: Exactly. It's just not allowed. And they always look at you with bewilderment.

AB: Why is that?

DR: Originally, it was a protectionist measure. Back when there was a Canadian-owned Labatt brewery in Winnipeg, another in Saskatoon, and one in Calgary, each province had its own breweries, and the rules were meant to protect those local jobs. The idea was well-intentioned at the time. But things have changed. Labatt, Molson, they're all foreign-owned now. The industry has consolidated, and these large breweries ship across provincial borders. But we still can't.

AB: What has your inability to export to other provinces meant for breweries like yours in Ontario?

DR: For us, it's not a massive issue because we're a small brewery. We support our local community and province. Our main focus is selling locally. But we'd also love for people here to be able to share our beer with friends and family outside the province. It's frustrating from a customer service standpoint. Our whole purpose is to share our product, and it's tough to tell someone we can't sell them beer just because of where they live.

AB: What kind of opportunities does this open up for you?

DR: We already have an online presence. We had it before COVID and relied on it heavily during the pandemic. Right now, we get people from outside Ontario buying gifts for friends or family here. But now, we can actually reciprocate that. We can ship to them. Of course, there are logistical challenges. Beer is perishable, it's heavy — but we can figure that out. Up until now, we've only been able to accept online orders for delivery within Ontario. But now, we're ready to expand that.

LISTEN | London brewer Dave Reed on opening interprovincial trade:

AB: You mentioned the protectionist aspect of the current system. Do you have any concerns about beer coming in from other provinces?

DR: Not really. Someone in Alberta isn't going to buy all their daily beers from Ontario because they'd have to pay for shipping. Shipping costs will always be a factor. Plus, every province has its own tax system. Every brewery across Canada pays a federal excise tax, but provincial taxes vary wildly. In Ontario, we pay about eight to nine times the tax that a brewery in Alberta pays. So pricing structures are different. But at the end of the day, we've never even had the opportunity to compete. Now, at least, we do.

AB: What do you think this could mean for someone who buys beer at the LCBO? Will there be more competition from other provinces?

DR: Not necessarily. The LCBO and other provincial liquor boards, whether privatized or government-run, have their own processes for getting beer on their shelves. It's not as simple as me calling up a liquor store in Calgary and saying, "I'd like to sell you Forked River." There's a whole system in place. People are still going to buy their go-to beers, but this change might make it easier to access unique beers from other provinces. 

AB: I'm from Alberta, and the craft beer industry there has been growing a lot.

DR: Absolutely. Every province has its own specialties. Even within Ontario, different regions have breweries known for specific styles. And really, why shouldn't we be able to access those across Canada?

AB: You've talked about individual customers buying from your brewery, but could you see a future where Forked River beer is on liquor store shelves in Vancouver?

DR: If there's demand for it and we can make it happen, absolutely. In fact, after we won a gold medal at the Canadian Brewing Awards in New Brunswick, their liquor board contacted us asking for a couple of pallets of that beer. That was government-to-government, which made it easier, but it shows that there is a market. That said, we're a small brewery. Our main focus is still selling locally, bringing Londoners into the brewery, and supporting our community. When people buy local beer, they're also supporting local comedians, musicians, and businesses. That's where our heart is.

AB: Could this lead to changes in the size of your brewing operation?

DR: Definitely. If it made sense to sell in Alberta or other provinces, we'd need to scale up production. We'd also need a marketing presence in those areas. Here in London, we've built up a strong reputation. But that takes time in a new market.

AB: Would you want to grow in that way?

DR: The scariest thing for a brewer is when beer leaves the brewery. You don't know how it's being stored, if it's being poured into a clean glass, or if the draft lines are clean. So there are logistical challenges. Of course, we want to grow, but we also want people to be excited about supporting their local breweries. Every community in Canada has amazing beverages made by passionate people. Let's support those, and then share them with others.