After business growth, Quebec distilleries battle for house on liquor retailer cabinets

Beginning with regionally grown corn, Samuel Gaudette transforms grain into alcohol, then provides elements resembling juniper berries, Labrador tea and customary prickly ash to supply agave sprite and gin at his boutique distillery in Quebec’s Jap Townships.

Gaudette, one of many founders of Comont distillery, based mostly in Bedford, Que., sells ready-to-drink cocktails and spirits in Quebec’s government-owned liquor shops, the Société des alcools du Québec, often known as the SAQ.

It is one of many solely methods Quebec distillers can promote their merchandise. However the SAQ is making an attempt to chop down on a glut of regionally produced spirits amid a downturn in gross sales and a crowded market, and some producers are nervous. They’re asking the province to permit them to promote their items elsewhere, together with on to prospects on-line and at farmers’ markets.

“We by no means know when the phone will ring,” Gaudette stated in a latest interview in his distillery’s tasting room. 

He is nervous the SAQ might name him and say they may now not carry his gin, or different merchandise.

“Now I am form of scared.”

The variety of producers making spirits has exploded. There have been simply two within the province in 2011, whereas there are practically 70 right now, in line with the Quebec Union of Microdistilleries.

A growth within the manufacturing of Quebec spirits

Quebec spirit gross sales grew by 75 per cent between 2019 and 2022, in line with the SAQ. 

“Nevertheless, the decline over the previous yr reveals a sure slowdown in native buying in our community and on-line on, mixed with the tougher financial context,” the SAQ stated in an announcement.

Now, with greater than 600 Quebec spirits obtainable, the SAQ says its cabinets are overrun and gross sales have declined total because the peak of the COVID-19 pandemic. It plans to chop again what’s on provide by withdrawing as much as 200 merchandise.

“The withdrawal of those merchandise will permit us to redistribute 15 per cent of the shelf house towards merchandise extra sought-after by prospects,” a spokesperson for the SAQ stated in an e mail. 

The change has left producers resembling Gaudette nervous about which merchandise shall be lower, and what they may do if their gins, whiskeys or vodkas are pulled from retailer cabinets.

“We’re form of hitting a wall now with the legislation and the federal government,” he stated.

WATCH | Does the SAQ’s monopoly on alcohol nonetheless make sense?

Does the SAQ’s monopoly on alcohol nonetheless make sense?

Whereas some are calling on Quebec to comply with different provinces in liberalizing their guidelines for alcohol gross sales, the federal government has some clear incentives to keep up the established order.

Few choices past the SAQ

Because it stands, Quebec distillers can solely promote their merchandise in SAQ shops, from their very own amenities, or by exporting them to different provinces or nations. In contrast to a number of different provinces, they don’t seem to be allowed to ship on to Quebec prospects by way of on-line gross sales.

With the SAQ now planning to restrict merchandise, calls are mounting for the provincial authorities to vary the principles and give producers extra pathways to promote their items resembling to eating places, at festivals and farmers’ markets, and thru direct gross sales on-line.

“None of those channels exist in Quebec, and this downside is exclusive to Quebec,” stated Vivek Astvansh, an affiliate professor of quantitative advertising at McGill College in Montreal.

A man looks slightly off-camera, standing in front of a shelf holding bottles of clear alcohol with red and turquoise labels and the logo for the distillery Cirka.
Paul Cirka, founder and grasp distiller at Cirka Distilleries, says Quebec distillers want extra pathways to promote their merchandise. (CBC)

Paul Cirka, founder and grasp distiller of Cirka Distilleries, which produces whiskey, vodka and gin, stated these alternate gross sales channels are essential to maintain the business that the federal government helped construct alive.

Cirka stated whereas the SAQ has used native producers to its benefit prior to now to drive gross sales and herald prospects, it’s now ready to depart a few of them behind.

“They have been encouraging us to supply merchandise as a result of they have been attention-grabbing, top quality and shoppers could not get sufficient,” stated Cirka.

“And now they are going, ‘Effectively, we’ve too many.’ So guess, you recognize, guess who’s going to endure? It is native producers.”

Claudia Loupret, a spokesperson for the workplace of Quebec’s finance minister, stated in an e mail that the federal government has already granted lodging to producers by permitting them to promote their merchandise from their manufacturing amenities. 

Producers, nonetheless, say that pathway is restricted as a result of they nonetheless have handy over greater than half of the sale value to the SAQ.

The Quebec Union of Microdistilleries stated it’s working with the SAQ to find out which merchandise will go and which of them will keep on retailer cabinets. The SAQ stated its plan includes withdrawing these with fewer gross sales, leaving room for remaining merchandise to get observed. 

The union’s vice-president, Madeleine Dufour, stated if the federal government does not change the legal guidelines, the business may very well be in danger.

“Let’s open up different methods to promote our merchandise. That is what we have been ready for a protracted, very long time for,” stated Dufour.

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