Manitoba brewers left feeling flat after province cancels fund

Manitoba brewers are frothing after a planned capital funding project was poured down the drain by the province.

The Manitoba Craft Liquor Opportunity Fund intended to helplocal craft brewers get off the ground and continue growing will be cancelled, according to a letter distributed to brewers by Manitoba Liquor and Lotteries.

Jason Kang isthe owner of Capital K, Manitoba's only craft distillery. He said Capital K was counting on getting money through the fund.

"We are literally facing bankruptcy right now," he said.

The $5-million fund, approved by the previous NDP government, was intended to issue loans of up to $250,000 to local craft brewers and distillers. Under the province's Supporting Manitoba Craft Brewing Strategy, the program was supposed to be implemented last spring, but instead was placed under reviewby the Progressive Conservatives.

• Manitoba brewers frothing over lack of government support
• Manitoba craft brewers get boost from province

Kang said when he contacted Manitoba Liquor and Lotteries in September, officials saidthe program was moving forward as planned.

"What they told me exactly was the program was going and they were just finalizing their lawyer and paperwork, application forms and all that information, and we just need to wait for that for a few weeks,"Kang said.

"And then it became a few more weeks, and a couple of months, and then there's nothing in between until this morning."

On Tuesday, a letter went out to brewers saying the program fell flat.

"These types of programs are outside our core mandate and expertise, and therefore we will not be proceeding with this program," the letter from Manitoba Liquor and Lotteries said.

"We support the board's decision to focus its business activities within its core mandate," said Ron Schuler, Manitoba's minister of Crown services.

But Kang said Capital K was counting on the fund to help with marketing, and to add some cushioning to cash-flow issues while the distillery got off the ground.

'Cancelled all my Christmas'

The letter encouraged local brewers to go to other agencies like the Business Development Bank of Canada (BDC) but Kang said Capital K, and the other breweries he knows, have already taken out those loans.

"We're already getting a loan from BDC because BDC is the only bank we can get a loan from as a new business," he said.

Kang said he's not counting on a Christmas miracle.

"I just cancelled all my Christmas. It's not that I'm not in the mood, we're sitting there waiting for all kinds of possibilities which is not really there anymore," he said.

• Craft brewers want simple best-before dates on beer
• Booze wars: Premiers squabble over free trade of alcohol in bid to protect bottom line

However, Dave Rudge, president and CEO of Half Pints Brewing Co., said he wasn't surprised by the end of the fund, particularly with the change ofgovernment.

"We're in business 10 years now, so it's one of those situations where we don't count our chickens before they hatch," Rudge said.

While Half Pints will keep brewing, Rudge said the loss of the fund could hamper the growth of the industry in the province.

"This would have been more beneficial for the guys that are brand spanking new. It would have made a big difference," he said.

"For the industry as a whole, the guys that were small who could have used it, it would have gone a long way."