Anyone *legally* selling their brew?

simpig

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There is a small Scottish Pub in our small rural town (Canada, just north of Toronto, Ontario) and I was wondering about the legal requirements around them being able to sell their own home brew (they don't do this today). I've done a little bit of digging and it seems possible - most of the alcohol regulations seem to be around transportation and distribution, but since they already have a license I believe they can brew onsite and sell it. Can anyone point me to some legal info around this type of idea? Also thinking that (since they don't have a lot of onsite space) maybe the bulk of the brewing could be done offsite with just the "sugar water" wort transported to the pub, with the yeast pitched onsite and therefore no transportation of alcohol. I know Canada has lots of regulations on alcohol, but I think this situation is fairly straight forward - just can't find the details.
 
I can't speak for Canada, but I'm told a large proportion of it's legal system is based on the British legal system which I am familiar with.

In the UK you wouldn't be able to follow the plan you outlined because the brewing and selling licenses are independent of eachother and breweries who wish to sell commercially have to be centrally registered with the tax authorities. This is down to the tax arrangements on alcohol, which is subject to normal VAT (currently 20%) at the point of sale, but also subject to "beer duty" at the point of production. Beer duty has to be paid by the brewery and is ususally paid at the point the beer physically leaves the premesis. The beer duty rate depends on the ABV strength of the beer produced, but a typical pint of 5% beer would attract beer duty of 55 pence (about 86 cents).

In practice there's no short-cuts or legal loopholes for brewpubs. A pub wanting to brew and sell it's own beer (and there are quite a few who do...) would need to hold both a brewing license and a sale license - and tax would be collected on both the act of brewing and also at the point of sale. You'll probably find if you dig a bit deeper that the Canadian laws will be similar - i.e. for tax purposes the taxman would consider the brewery and retail activities of a brewpub to be distinct, taxable activites and wouldn't allow you to argue that because the activities are taking place within one building or location that nothing had been "transported". They may even require you to register the pub and the brewery as seperate legal entities and require that you keep seperate accounts for each which clearly show the transfer of beer from one entity to the other, and the collection of any required taxes as part of the transfer.

Don't take my word for it though - as I said, I'm familiar with the UK law, not Canadian law. Having said that, I'd be very surprised if the Canadian authorities had a noticably different set of rules which allowed the brewing and sale of beer without the payment of some sort of tax on production - for the simple reason that I know of no government in the world that would allow potential tax revenue to escape their grasp that easily.
 
As a home brewer, I am thankful the tax man doesn't consider home brewing a taxable event. What a pain that would be. Given the high taxes in Canada on alcohol products, there are many brew shops that help customers make their own beer or wine, all with the shop's equipment. This approach also gets around the taxes as I understand it.

We are lucky in Oregon to have a state level congress member who is also a home brewer! We are also a state that allows brew pubs (brew and sell on the same premises, plus restaurant). This setup was not legal in Oregon until 1985.
 

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