‘Death by 1,000 cuts’: B.C. brewery closes after 27 years in business

Lighthouse Brewing says increased cost pressures, market saturation, and changing consumer preferences contributed to its closure.

After nearly three decades in business, one of the pioneers of Vancouver Island’s craft brewing scene is closing.

Lighthouse Brewing is shutting down its operations in Esquimalt, B.C., effective Jan. 25.

The company’s brand and beers have been bought by another local legacy brewer, Phillips Brewing.

“There’s certainly a lot of pride in our history and our legacy and the place we’ve had in the community,” Lighthouse Brewing co-owner Ben Thomas told CTV News.

The company rolled out the first kegs of its flagship beer, Race Rocks, in 1998.

“There are (former) Lighthouse people all over the country right now working in other breweries, so that’s pretty cool,” Thomas said.

Thomas described the company’s demise as “death by a thousand cuts” since the pandemic, pointing to increased ingredient and canning costs as major contributing factors.

“If we charged what we should be charging for our beers and someone has to pay $13 for a pint, that’s not going to go over too well,” he said.

“We absorbed a huge amount of the increased costs and obviously that didn’t work out.”

Market saturation and a shift in consumer preferences to non-alcoholic beverages also took a toll, Thomas said.

In recent years, the company reduced its staff from roughly 25 to 10 people. The brewery was only making what it could sell, Thomas said.

“At a certain point, it didn’t matter how efficiently we were operating or how good the beer was. Sometimes it’s just not enough,” he said.

Phillips Brewing Company is taking over the brewing, packaging, marketing and selling of Lighthouse beers.

“It’ll stay and remain Lighthouse. We’re going to honour those brands, let them be what they are and build on that,” Phillips Brewing president Jim Lister told CTV News.

‘You’ve got to chase the crowd’

The BC Craft Brewers Guild said over 20 of roughly 220 B.C. breweries closed last year.

The non-profit has long lobbied the provincial government to reduce the tax rate on small breweries.

Ken Beattie, the guild’s executive director, said he expects the province to review the proposal within the next few months.

“Give us some tax breaks, so we can reinvest that money and we can diversify and give the population what it wants as the market continues to ebb and flow,” Beattie said.

Despite recent closures, he said some breweries have made a successful pivot in the competitive market.

“If you have a vibrant taphouse, a good distribution network and great staffing service, you’re going to be great,” he said.

“You’ve got to chase the crowd. So if the crowd is going to be better quality food and non-alcoholic offerings, then you’ve got to be part of that mix.”

Phillips has done exactly that, offering sodas, spirits, and zero-proof beverages. It’s also in the middle of a kitchen renovation, so it can offer more food options in its taproom.

“The beer landscape is not what it once was. It’s very competitive,” Lister said.

“We’re doing okay. It’s for sure a battle, but we’re definitely doing okay.”