BC Business
Shelter Point Distillery’s James Marinus, whose first batch of whisky will (hopefully) be ready this fall
James Marinus
Shelter Point’s vodka
Whisky aging in the barrel
Patrick Evans feeds the cows
Shelter Point’s oceanfront farm on Vancouver Island
Long Table Distillery founder Charles Tremewen mixing a drink. Long Table is Vancouver’s first microdistillery
Long Table Distillery’s tasting room features “Gin and Tonic Fridays” and “Cocktail Saturdays”
In case you’ve been too busy drinking craft beer to notice, B.C. is currently undergoing a distillery boom. Just three years ago, there were barely a handful of distilleries in the province, but in 2013 a new kind of licence was launched by the provincial government—a craft designation that allows distillers to keep a larger chunk of their sales free of markup by the B.C. Liquor Distribution Branch (LDB). The move opened the floodgates, increasing the number of licensed distilleries operating in B.C. from 17 in March 2012 to 48 as of August 2015, with eight further applications currently in progress.
Patrick Evans is one of those who are hopeful that the recent changes herald a renaissance for B.C. distillers. Evans, a third-generation farmer, began construction on his Shelter Point Distillery in Oyster River, B.C., south of Campbell River, in 2009 and opened for business in 2011, with James Marinus as distiller. Shelter Point’s main product will eventually be whisky, though it has yet to sell a drop of it as whisky takes years to age (the distillery hopes to release its first batch this fall). In the meantime, vodka—which takes just 14 days to get from grain to glass—is Shelter Point’s bread and butter. “When we started there were just a few distilleries in B.C. and I thought, Wouldn’t it be amazing to have more?” says Evans. “The way I see it, one distillery is cool to look at, 10 is an industry—but 50 is a destination. Look at Scotland: they have 30,000 square kilometres, including their islands, and they have 3.9 billion litres in whisky exports. How about we get a fraction of that?”
However, developing an industry on the scale of Scotland’s is unlikely—especially given B.C.’s restrictive rules as to what qualifies as craft. The B.C. government defines a craft distillery as one that “uses 100 per cent B.C. agriculture inputs, ferments and distills their product on-site, and produces less than 50,000 litres annually.” But critics argue that this definition means we’ll never see a B.C. craft tequila or rum as we simply can’t grow the right ingredients, such as agave or sugar cane. It also ignores the age-old tradition of making gin from neutral grain spirit (NGS), which is a highly rectified neutral spirit base with no remaining grain flavour. In England, where so many world-class gins are made, distillers have to buy their NGS from a third-party supplier; in B.C., there is no third party making NGS—and even if there were, a distiller couldn’t buy it and get a craft designation as the NGS needs to, according to the rules, be made “on-site.”
Putting the focus on ingredients rather than a strictly size- or volume-based definition places a small-batch producer such as Victoria Spirits—which produces around 7,000 litres a year from its family-run microdistillery on Vancouver Island but gets its NGS from Ontario—in the same category as multinational Diageo, which produces 6.5 billion litres of spirits from more than 100 sites in 30 countries. For Victoria Spirits or Vancouver’s Long Table Distillery, which also produces around 7,000 litres a year, the devil in those details is having a big impact on the bottom line. Currently distilleries defined as craft can keep 100 per cent of the proceeds from sales in their tasting rooms and can sell directly to restaurants without paying a markup to the LDB; microdistillers that don’t qualify have to pay a 161 per cent markup. Charles Tremewen, who opened his award-winning Long Table Distillery in February 2013, just prior to the B.C. government’s new craft policy, says the new rules are enough to give him pause. “If we knew then what we know now, would we rethink our model? Maybe.”
Despite attracting some vocal opposition from industry, John Yap, B.C.’s parliamentary secretary to the Minister of Justice and Attorney General—and the man responsible for the province’s liquor policy reform—argues that the new rules have been good for B.C.’s economy. “We’ve seen huge increases in the number of entrepreneurs in the sector of the distillery business and it’s a sector that has a lot of potential, with new channels to reach customers like selling spirits at farmers’ markets,” he says. But the craft designation, he adds, is here to stay: “My expectation is that there will be an opportunity to look at a VQA-like designation in the future and that will be the opportunity to consult with the industry. However, the bottom line is the revenue flow to the province has to stay the same.”
With all the various local roadblocks, many B.C. distillers have started to set their sights overseas. For Shelter Point’s Evans—who ships 80 per cent of his product to Japan, with the rest being sold on the Island and at select Vancouver retailers—the economics just make more sense. “If we ship two pallets on a truck to Vancouver it costs $800, but if we ship that through the port of Vancouver to Japan, it’s $650. Canada has a brilliant name in Asia and we should be working on that; Christy Clark has been pushing us and supporting us in those export markets. There are 30 million people in all of Canada— or 30 million in Beijing alone.”
Still, that won’t stop some in B.C from trying to develop the local market and lobby the government to create a more even playing field for small-batch distillers. In 2013, Vancouver tech executive Alex Hamer saw that his province was poised for a boom in its microdistilling industry and at the same time realized that distillers faced a challenge in bringing awareness to consumers. Taking a break from his IT career, he founded BC Distilled with the goal of celebrating and highlighting B.C. distilleries. This year’s event—the only tasting festival in Canada focused exclusively on local spirits—pulled in a crowd of 600 local distillery fans to CBC Vancouver’s studios, eager to sample spirits from the 22 distillers in attendance.
“We will continue to see growth in this exciting industry, but our work isn’t done in building awareness and ensuring it remains a strong part of B.C.’s economy and culture,” says Hamer. “Look at the beer industry in the ’90s. Most bars only served big brands, and now even the most mainstream place has a microbrew on tap. Not every bar will carry dozens of local spirits, but I think most will carry a few.”