At Nine Locks Brewery in Dartmouth, N.S., the climbing price of fuel has driven up transportation and shipping expenses, taking a major bite out of their bottom line.
“Shipments out of the U.S. with cans are coming in and we are seeing a couple of hundred dollars a truckload,” said co-owner Danny O’Hearn, who helps operate the company that opened 10 years ago. “Locally we are also seeing small increases, but they all add up over time.”
O’Hearn and his staff are now scrambling to trim other expenses and hopefully save money to offset the increased cost.
“We decided to look for savings within,” said O’Hearn who prefers to not pass on the rising price to produce craft beer. “You can’t take advantage of customers and if we do that, our volume and business could continue to drop.”
O’Hearn is not alone.
In Halifax, Garrison Brewing Company’s overall transportation cost has jumped by 30 per cent.
“We haven’t passed any cost onto our customers yet. But if this continues to go on, it’s going to be difficult to not,” said Meg Brennan, who is the vice-president of sales and marketing.
Good news on the horizon
Gas analyst Carol Montreuil believes the federal government suspending the gas tax, should bring some relief at least in the short-term.
“Any reduction in taxes is good news for consumers and depending on which city we are talking about in Canada, some consumers pay up to seven taxes at the pumps,” said Montreuil. “Last year we saw the carbon tax be removed by Prime Minister Mark Carney, and now this excise tax removal is notable, and it should have a positive impact.”
However, Montreuil is also watching the war with Iran closely and fears if it continues long-term, fuel prices could increase even more, regardless of tax relief.
“If the conflict in the Middle East continues, and the price of crude goes up more, it will negate any tax reduction,” he said. “So, we hope things will stay as they are today, and that tax reduction turns into a direct benefit for consumers and businesses.”
As Brennan waits for fuel prices to drop, she is also changing some marketing strategies and targeting new customers.
“We are looking at working smarter, not harder,” said Brennan, who hopes to see a reduction in the high cost of gas and diesel that is spilling into craft brewing industry.
