A new survey of Saskatchewan craft breweries highlights the hardships brought on the by the novel coronavirus pandemic.
Roughly 65 per cent of craft brewery staff have been laid off since COVID-19 struck the province. Half of the 12 respondents expected April 2020 revenue to be down by 50 per cent or more compared to April 2019.
“We’ve already had one brewery that has reported that they have closed and ceased operations,” said Mark Heise, Saskatchewan Craft Brewers Association president.
“Several others are right on the brink right now.”
Saskatchewan beer-makers have been forced to innovate, including through an online ordering and delivery system. They have also launched collaboration beers and shared packaging and ingredients.
More than 40 per cent of breweries stated they won’t qualify for the Canada Emergency Wage Subsidy. The subsidy formula is based on revenue in January and February — two of the slowest months for beer sales.
Cash flow continues to be a major issue. Four out of 12 surveyed breweries said they only have enough cash to keep business going for less than two months.
“It’s a very new industry, it’s a very capital-intensive industry and it’s a very grassroots industry,” said Heise, who is also the president and CEO of Rebellion Brewing Company.
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He said initially, Saskatchewan craft brewers were ineligible for the province’s Small Business Emergency Payment Plan because operations weren’t forced to close entirely. However, with taprooms, restaurants and bars shuttered, the province changed course.
As of Thursday, 17 breweries had received a total of $79,000 under the program, according to the Ministry of Trade and Export Development. SLGA has deferred the production levy for all craft alcohol until the health emergency has ended and the authority’s operations return to normal.
“The government recognizes the challenges facing many businesses and will continue to engage with the business community and consider further options,” said a statement from Ashley Schoff, spokesperson for the trade and export development ministry.
Nationally, breweries are seeking a three-month deferral on excise duties – essentially a sin tax breweries pay based on their production levels.
“It’s not really a handout. It’s just to help with our cash flow,” said Rick Dalmazzi, executive director of the Canadian Craft Brewers Association (CCBA).
Dalmazzi said Canada’s Department of Finance is not considering a deferral at this this time. A request for comment to the department was not returned by deadline.
Some breweries have converted to make hand sanitizer, and Dalmazzi said those products also deserve an exemption.
“There are tweaks out there. Generally speaking, we think the government has done a good job. They’ve been responsive,” Dalmazzi said.
Over 90 per cent of Canada’s 1,100 craft breweries opened in the last decade, according to the CCBA. Dalmazzi said the country could start seeing permanent closures if current conditions extend into the summer.
Questions about COVID-19? Here are some things you need to know:
Health officials caution against all international travel. Returning travellers are legally obligated to self-isolate for 14 days, beginning March 26, in case they develop symptoms and to prevent spreading the virus to others. Some provinces and territories have also implemented additional recommendations or enforcement measures to ensure those returning to the area self-isolate.
Symptoms can include fever, cough and difficulty breathing — very similar to a cold or flu. Some people can develop a more severe illness. People most at risk of this include older adults and people with severe chronic medical conditions like heart, lung or kidney disease. If you develop symptoms, contact public health authorities.
To prevent the virus from spreading, experts recommend frequent handwashing and coughing into your sleeve. They also recommend minimizing contact with others, staying home as much as possible and maintaining a distance of two metres from other people if you go out.
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