By: Forrest Scharf (PAg) Provincial Specialist, Fruit Crops
In 2015, the need for new alcohol control regulations became evident through discussion with Saskatchewan's craft alcohol producers, the Saskatchewan Liquor and Gaming Authority (SLGA) and the Saskatchewan Ministry of Agriculture.
The "buy local" trend that had been increasing over the past several years resulted in increased consumer demand for locally crafted alcohols, but the old regulations set a 50,000 litre per producer production limit. If production exceeded 50,000 litres, producers faced disincentives to increase production. This prevented investment in infrastructure, such as larger equipment, required to profitably serve greater demand. In addition, prior to 2015, other provinces had less restrictive alcohol control regulations, leading some Saskatchewan producers to consider leaving the province.
Since the industry and corresponding legislation is complex and competitive, the SLGA made the decision to hire MNP to conduct a review and provide recommendation on how best to regulate the industry. MNP submitted their Craft Alcohol Producers Industry Review on Nov. 13, 2016.
Features of that report helped SLGA craft new regulations. The much-anticipated Alcohol Control Regulations, 2016 came into effect on October 9, 2016.
The expanding value-added production of craft alcohol has served as a lucrative market for many fruit producers. Some advantages this market holds over other forms of fruit sales are that it requires less labour, distribution, storage and packaging. Fruit growers should analyze costs when considering pricing, as reduced input expenses can result in better margins at the lower prices typically desired by alcohol producers.
The SLGA is attempting to make entry into the craft alcohol industry as problem-free as possible. Entrepreneurs interested in becoming alcohol producers are encouraged to communicate with the SLGA as early as possible when business planning starts. In regard to apple producers, there is an interesting partnership opportunity with a cidery located near Saskatoon. For more information, please contact Forrest Scharf, Provincial Fruit Crops Specialist, at email@example.com or 306-787-4666.