East Vancouver brewery listed for sale as owners call for change to B.C.'s 'archaic' liquor regulations

Bomber Brewing, a popular craft brewery in East Vancouver, has recently been listed for sale by the hospitality group Freehouse Collective. The current owners are calling for B.C. to change its tied-house policy, which prohibits Freehouse from selling Bomber products at any more than three of its 11 businesses. (Source: BC Ale Trail)

A near decade-old craft brewery in East Vancouver is being sold, again, and its current owners says B.C.’s “archaic” regulatory framework is partially to blame.

Freehouse Collective, formerly known as The Donnelly Group, says it recently listed Bomber Brewing for sale because there isn’t enough economic incentive for a hospitality group to own a venture of this kind due to the province’s tied-house policy.

The company has owned the brewery at 1488 Adanac St. since 2018, four years after Bomber was established by teammates on a local beer league hockey team by the same name.

But as a tied house, which is defined by B.C.’s Liquor and Cannabis Regulation Branch as “a business that has an association (financial or otherwise) with a liquor manufacturer or its agent that is likely to lead to its products being favoured,” Freehouse can only sell Bomber products at three of its 11 bars in Vancouver.

“We would warmly welcome the modernization of this policy, especially in the current craft beer climate with shrinking market share and increasing costs,” Harrison Stoker, the group’s chief growth officer, wrote in an email to CTV News on Tuesday.

“It’s long overdue for a review and industry consultation. We, and many others, have expressed to the province a general lack of support for keeping this arcane rule in place,” he added.

The Ministry of Public Safety and Solicitor General tells CTV News that it recently engaged with industry stakeholders to discuss tied house rules and found the vast majority were in favour.

In a statement Wednesday, the ministry said the goal of the rules is to “prevent market consolidation, thereby ensuring greater access for entrants into the liquor industry and subsequently, greater choice for consumers.”

Under the current regulations, small to medium sized manufacturers can request up to three tied house exemptions.

“The ministry is undertaking review on how applicants are assessed and to modernize and improve the application process, a key request from the industry,” reads the statement.

THE LATEST LOSS ON THE PATH OUT OF DEBT

Stoker says Freehouse hasn’t decided whether to sell or partner on the brewery, which was publicly listed in late summer for $1.7 million.

“Our objective hasn’t been focused solely on just finding a buyer, but also the prospect of a joint venture to best utilize Bomber’s great brewing capacity. In the meantime we’re happy to continue to own and operate the brewery with its talented team,” said Stoker.

Two other Freehouse locations, The Cinema and The Butcher & Bullock public houses, are also for sale as part of the group’s financial restructuring plan.

Freehouse initiated proceedings under the Companies’ Creditors Arrangement Act back in May, and received unanimous support from its lenders to revise the terms of existing loans and restructure debt the group says was required to survive the pandemic.

The B.C. Supreme Court approved the plan on July 26, and Freehouse listed Cinema and Butcher & Bullock one month later for $1.2 million and $750,000, respectively.

Freehouse’s CCAA proceeding will be complete in Spring 2024, according to Stoker.

“Between now and then we are keeping the door open to the idea of divesting on additional locations provided it’s in the spirit of both improving our financial restructuring and best positioning our team to grow core brands,” he said.

Other businesses in Vancouver that are owned by the company include Sing Sing, Ballyhoo, Brass Fish, Three Brits Public House, Clough Club, Isabelle’s, Stock Room and Hundy.