Basically, I’d like to run down the levels of regulation from top to bottom to clarify our situation as best I understand it. Again, legal counsel might see it otherwise.
First, the federal government only cares about excise tax, but they are also the one that actually permits you to manufacture beverage alcohol. They give you an “Excise Licence.” They are also the only ones that actually inspect your setup. Everything has to be in place (no tanks in shipping or not fully installed), but they really only care about volumes. It’s a hold up, but they give you a general excise licence to brew. No size requirement, but everything gets rounded to the nearest hl at the end of the month, so for us that puts a lot of our volume within rounding.
Second, provincially the AGCO gives you a licence to sell the things you brew. Most breweries in Ontario operate under a “Manufacture’s Licence” which allows for sales through the LCBO, a bottle shop, off-site sales (to, like, other bars), and freedom on alcohol percentage. The AGCO also offers a “Wine and Brew Pub Endorsement,” which is quite different from the manufactures license. It states:
Now, the long and the short of this is that this endorsement coupled with the Canadian “Excise Licence” means you can brew on premises and sell (only) on premises.6. Wine and Brew Pub Endorsement
The holder of a brew or wine pub endorsement may sell and serve beer or wine that is manufactured on the premise by the licensee. The licensee must own and operate both the pub and the manufacturing facilities, the beer or wine must be sold and consumed only in the licensed area and must be manufactured in accordance with standards established under the Food and Drugs Act (Canada).
The licensee may contract out the manufacture of the beer or wine but the following must be observed:
i. The contractor may only be paid for labour costs;
ii. Payment for the contractor's service may not be based on quantity (bottles, batch, etc);
iii. The licensee is responsible for the entire manufacturing process, including spoilage;
iv. The beer or wine must be manufactured only on the licensed premises to which the brew or wine pub endorsement applies.
A notice must be posted in a conspicuous place on the licensed premises indicating the percentage of alcohol content of the beer or wine.
Brew Pub
Beer manufactured by the holder of a brew pub endorsement shall only be sold, served and consumed in the licensed premises where the draught beer was manufactured and on one premises other than the premises where the beer is manufactured if:
i. the licence holder has at least a 51% interest in the business carried on at the other premises and a valid liquor sales licence or
ii. in accordance with any caterer’s endorsement attached to the licence holder’s licence.
The beer manufactured by the holder of a brew pub endorsement shall not contain more than 6.5 percent alcohol by volume.
It is the endorsement holder’s responsibility to comply with all federal requirements. For further information about this contact your nearest Regional Federal Excise Office.
In addition, the holder of a brew pub endorsement will be subject to the Beer and Wine Tax as of July 1, 2010. The Ministry of Revenue will administer the tax program
Third, there is the question about zoning in the city of Toronto. There isn’t a lot to go on. The 2013 zoning by-laws are here, but don’t say much specific about brewing. There is some talk in the exceptions about “brew-on premises” but that’s a red herring, since it’s referring to places where people brew (like homebrew) for take home consumption. It’s not for commercial sale of beverage alcohol.
So we’re left with the question, is brewing a manufacturing use or not? What counts as manufacturing? Let’s look at the definitions:
But, under the definitions, an eating establishment is:(460) Manufacturing Use
means the use of premises for fabricating, processing, assembling, packaging, producing or making goods or commodities, and it includes repair of such goods or commodities.
Now, “beverages are prepared” for “immediate consumption” is up for debate. Clearly “Eating Establishment” blocks anyone like Bellwoods or Left Field who have a bottle shop and a separate pub. They are primarily a place where “goods or commodities” are “produced” for offsite sale. We do not. We operate under a brewpub endorsement which means all of our products are for “immediate consumption on the premises while they are seated.” I’m sure there are ramen restaurants in town that deal with larger volumes of liquid than we do.(225) Eating Establishment
means premises where food or beverages are prepared and offered for sale to patrons for immediate consumption on the premises while they are seated, and which may include an incidental take-out service
Does an East End brewery have a bottle shop? Do they brew over 6.5%? I dunno. Does anyone without special zoning variance do so? No idea.
For us, we are working on getting zoning variance in the understanding that to apply for the AGCO’s “Manufacture’s Licence” we must be zoned for manufacturing. We’d like to send kegs off site. We’d like to brew above 6.5%. And maybe have a bottle shop or offer growler fills. Using out current set of licences and endorsements, we cannot do so and I (me personally, legal counsel might say something else) believe these limitations mean we are not manufacturing. If one drop leaves the doors, you are manufacturing because it is no longer for “immediate consumption.”
Currently we are legally preparing beverage alcohol for sale under our “Wine and Brew Pub Endorsement” under the auspices of being an “Eating Establishment” where “beverages are prepared.” Nothing shifty. We are preparing for immediate consumption, not manufacturing for sale elsewhere.
I'd love to see anything else about this. Links to the documents rather than just hearsay and unnamed sources.
