Local breweries say LCBO service fee increase on beer will end up hurting consumers

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Small breweries in Ontario say razor-thin margins are making it tougher to serve up their beloved beers and with higher fees from the LCBO and looming U.S. tariffs, your next cold one could cost a little more.The LCBO is set to increase the fee it charges brewers on April 1, a 4.4 per cent jump in what the liquor agency refers to as the ‘cost of service’ across all beer products, imported or domestic.Local breweries say it’s going to hurt their wallets and that it will likely trickle down to the consumer.“It’s already hard enough to compete against the big guys and this is going to further impact how viable it is for a small producer like myself to even bother working with the LCBO,” said Carl Pratt of Beaches Brewing Company.“There’s only so much we can absorb. I think a lot of breweries will have to pass that along to the consumer, and there’s only so many price increases the consumer can take with everything going on in the economy and every price increasing in a person’s life, it makes it tough for us and it makes it tough for our guests,” added Eastbound Brewing Company co-owner and brewmaster Dave Lee.Both Pratt and Lee say their businesses amount to passion projects, making beer for beer lovers. They have to stock with the LCBO to get their products in front of Ontario consumers but add it’s not a big source of income.“You’re already making like a quarter for every beer you sell, and the beer is like $3.50. So if that’s your take home then it makes it less and less attractive to work with the LCBO,” explains Pratt.The brewers CityNews spoke with on Wednesday say this will just make it that much tougher to stay afloat in a pond with some pretty big fish.“We employ more people per litre, per dollar sold, than a big company could, they just have way more power and way more efficiency,” said Pratt.“Craft beer is notoriously inefficient and we employ a lot of people, and the margins get tight and we try to offer incentives and specials but it makes it harder,” added Lee.CityNews reached out to the LCBO for comment but they have yet to respond to our request.The next Ontario government could decide to intervene and scrap April’s price hike.In the Progressive Conservatives platform released on Monday, there was a proposal to get rid of the minimum retail price for liquor.Doug Ford has not made any public announcements about his alcohol promise, unlike in 2018 when he made setting the price floor for beer at $1 – or Buck-a-Beer – a central part of his campaign. Few breweries took part in Buck-a-Beer after it was implemented.Craft brewers say the best way to support them is to come in and get a draft beer which goes straight from their tanks to their barroom taps.