Achi news desk-
The number of micro-distilleries in Quebec has grown in the last decade, growing from less than a dozen to about 70.
But a decision by the Quebec liquor corporation to cut up to 200 house-made products from its stores is a sign of the growing pains felt by an industry struggling with strong competition, onerous regulations and a tough economy, distillers say.
The Société des alcools du Québec, or SAQ, announced last week that it plans to pull 150 to 200 inferior Quebec spirits from store shelves by winter 2025. The SAQ currently stocks over 600 Quebec spirits.
“The space they currently occupy on the shelves will be freed up for products that customers demand but have difficulty finding a place in too large a selection,” said the District Crown Corporation in an email. She added that she is working with the Union québécoise des microdistilleries, a group representing distillers, to come up with new rules in the coming months.
Paul Circa, president of Montreal-based Circa Distillers, said the situation at the SAQ is the result of an industry that has expanded rapidly, with no more available shelf space and almost no other sales opportunities. The result, he said, was that some manufacturers were “throwing products” at the SAQ, who he said put them all on the shelves indiscriminately to see what resonated.
“To some extent the SAQ created this problem, and now they don’t know how to manage it because they don’t have a clear creative or management view that looks at a solution,” he said in a telephone interview. He fears that the SAQ lacks vision about what products to stock and where, which could result in some promising products being cut because they didn’t get enough visibility or publicity.
And even if distilleries sell their products directly to consumers from their premises – the only other way allowed – they still have to pay about half of the selling price to the SAQ, not including taxes. He said this amount is much higher than what other districts collect from small distilleries.
“If they’re pulling products off the retail shelves, and they’re still viable products that you can sell from your distillery, there’s no reason to give the SAQ the mark,” said Cirka, whose distillery makes gin, whiskey and vodka sold by the SAQ.
Samuel Gaudet, co-founder of Commont Distillery in Quebec’s Eastern Townships, said the SAQ made a mistake by not regulating which spirits it stocked in the first place.
However, he said that suddenly reducing products, without allowing manufacturers an additional store, “will definitely stifle smaller players and especially those who are just starting out.” He said it would also stifle creativity.
“By essentially wanting to remove more niche products that necessarily have fewer sales, the message they are sending to distillers is simple: they are looking for mass products to maximize sales and satisfy the general public,” Gaudet wrote in an email.
Joelle Bolduc, co-owner of micro-distillery les Esprits Tordus in l’Assomption, north of Montreal, says she’s cautiously optimistic that SAQ’s plan to be smarter about what it carries could create more room for new, innovative products.
“There are distilleries that offer six different types of gin,” she said. “Do we really need so many gins from one distillery? Beyond that, do we really need 300 types of Quebec gins?”
But she says adjusting the SAQ’s proposals won’t be enough to solve the industry’s problems.
She notes that several well-known distilleries have closed or filed for bankruptcy protection in the past year. She said the COVID-19 pandemic, an economic downturn and an “explosion” in the number of distilleries didn’t help, but neither did Quebec’s restrictive sales model.
She points out that she has to pay half of her sales to the SAQ even though they don’t stock her bottles.
“Our products are only sold at the distillery, but I still have to send the SAQ 52% of the price of my bottle, even if they don’t offer me a single service in marketing it,” she said.
Boldock and her husband, who have been in the business for two years, produce an eau de vie, similar to brandy, made from grapes, elderflowers and raspberries they grow themselves, as well as a whiskey-like spirit made from leftover beer. They collect from local breweries.
It would like to get its products on liquor store shelves, but it would require a significant increase in their operations to generate the volume that Crown Corporation requires.
“Our business model is that we are a small line in an agricultural environment, we want to stay on a human scale,” she said. “Such a business model is very difficult in the current environment.”
All three distillers say the easiest way for the province to help small distilleries — and free up shelf space at the SAQ — would be to give distillers more freedom to sell their products, including to restaurants, farmers markets and directly to customers online. . They also believe distillers should get a break in the amount they have to remit to the SAQ for bottles sold without the corporation’s help.
The SAQ says it is exploring the possibility of establishing “alternative channels” for sales as part of its changes, but did not elaborate.
This report by The Canadian Press was first published on April 28, 2024.
