'Small business, my ass': Bar owners blast Yukon gov't over rising booze costs

The owners of a Whitehorse bar and restaurant are taking Yukon Premier Sandy Silver to task over planned increases to liquor prices in the territory.

CBC News obtained an email sent on Saturday to Silver, as well as the minister responsible for the Yukon Liquor Corporation (YLC), John Streicker, and YLC president Matt King. It was sent by Katja Schmidt and Christine Kent, who own the Dirty Northern and The Miner's Daughter, a joint bar and restaurant.

Schmidt and Kent were responding to a letter sent by the liquor corporation to all wholesale licensees the day before, explaining that the YLC will bring in a new pricing structure on July 1.

According to YLC's letter, the new prices "will reflect current supplier pricing, freight, excise, duty, revised mark-up, cost of service differential, liquor tax and other fees and deposits."

The letter was written by Steve Cummings, director of operations at the YLC. 

Scathing reply from business owners

Schmidt and Kent responded with a blistering message to Silver, Streicker and King, questioning the planned increases.

The changes "just cost our business about $3,000/month on draught beer alone," Schmidt and Kent's email says. 

"Don't try and pass it off as an effort to maintain compliance with trade agreements while underhandedly increasing costs on the businesses that create jobs and drive the economy," they wrote.

The email was copied to about 60 other Yukon bars and restaurants.

The CBC requested an interview with the president of the Yukon Liquor Corporation, but did not receive a response before the close of business day Monday.

'You don't make a lot of money'

Schmidt told CBC News that bars and restaurants operate on razor-thin margins, and she worries that some will be forced to close.

"Even being extremely busy, you don't make a lot of money. So you're looking at a margin of three to nine per cent [as] your profit. Here is an industry where I'm employing, let's say, 50 people. Now I have to run my [business] even tighter or lay people off to try to compensate for this price increase."

The YLC's letter shows planned increases to all alcohol — retail and wholesale — with the exception of a very slight average decrease (13 cents per bottle) to table wine. Hard liquor will see an increase of an average of $2.40 per bottle.  

James Maltby, owner of Woodcutter's Blanket cocktail bar in Whitehorse, said price increases will have a "significant" impact on businesses like his.

He estimated the hikes could add about a dollar to his drink prices. Meanwhile, he'll have to figure out how to manage the "substantial construction" his business is undergoing, at the same time.

"The actual profit margins are so thin," he said. "To be honest, I've had to have another job for three years and haven't taken any profit from my business, I've just put [money] into it. And only recently have I been able to sort of expand to grow the business in order to realize a profit."

Maltby said there was some consultation last summer, but little was known about the impact any changes would have on businesses.

'Mining is not the only industry'

Schmidt and Kent's email urges the government to "learn something about the industry before you implement an increase like this."

"Mining is not the only industry in this territory. You'd have to be daft not to have noticed the businesses in this sector that have closed in the last three years. Is it just that we don't matter?"

Schmidt told CBC the increase came out of the blue, with no consultation with affected businesses.

"No warning, no nothing. I'm not looking for handouts — I'm just not looking to get screwed over."

Schmidt says she's particularly disappointed because Silver made a commitment in the 2016 election campaign to protect small Yukon businesses.

"Small business my ass, Sandy," the email concludes.