B.C. distilleries still waiting on government support after supplying hand sanitizer

Distillers in the Okanagan and across British Columbia are still waiting for government support after they spent the early months of the pandemic turning their craft spirits into emergency hand sanitizer.

While they’ve been waiting, they’ve had to swallow news that Ottawa purchased $375 million worth of the product from overseas, and the province skipped the bidding process to sign a contract with Vancouver-based brewery Parallel 49 Brewing.

Tyler Dyck, CEO of Vernon-based Okanagan Spirits Craft Distillery and head of the province’s distillers guild, says he knew multinational corporations would be waiting in the wings to sign big contracts with the federal government, but given the calls for help he was fielding from frontline workers in March, he decided to do “the right thing.”

Since then, the distillery has produced about $700,000 worth of sanitizer, about half a million of which was donated during a period of global shortages.

Parallel 49, the largest brewery in Vancouver, secured a contract for 660,000 litres of hand sanitizer from the province.

“During a time of high demand, supply uncertainty and competition from private retailers for hand sanitizer, the province was fortunate to be able to make a purchase of the product from a local distributor within a tight timeframe,” a spokesperson for multiple B.C. ministries said in an email Friday, Dec. 11.

“Parallel 49 Brewing had access to most of the production requirements and provided the opportunity to make a single bulk purchase. This was more efficient than procuring from multiple, smaller sources,” the email stated.

Mike Sleeman, owner of Parallel 49, said once a contact was made with the province things went smoothly, in part because the brewery already had regulatory approval and a supply chain for ethanol from the Prairies in place.

However, he says now that governments have started procuring sanitizer from multinational corporations, he’s left with a stockpile he can’t get rid of.

“We’re sitting on about 30,000 four-litre jugs of it and I can’t move it, nobody will buy it,” Sleeman told Black Press Media on Tuesday, Dec. 15. “It’s insane how much sanitizer I have and I cannot sell it.”

Sleeman said when the contract was in the works, governments were scrambling to get sanitizer supply chains moving.

“This was during the whole panic mode when nobody could make it,” he said. “I locked up all the ethanol in Canada at the time, took a big gamble, took out a bank loan and purchased about $300,000 worth of alcohol.”

At the federal level, Sleeman says the government’s $375-million contract for hand sanitizer with China-based car maker BYD Canada Co. makes little sense, given the amount of the product his brewery and other Canadian distillers were already producing.

“I don’t get it because, I mean, I’m still sitting on a ton of sanitizer… I could have provided sanitizer for the entire country,” he said. “The provincial government was great… the federal government didn’t give us the time of day.”

Sleeman said Parallel 49 secured a contract for about $1 million from the provincial government in May, two months after distilleries in B.C. had begun making and donating sanitizer.

Sleeman said the contract was signed without a bidding process.

According to Dyck, it was around the same time the province was telling distillers to bid on contracts.

But as Sleeman points out, Health Canada regulations may have steered the province away from the distillers.

He says about 50 recalls have been made due to various standard issues.

According to Health Canada’s website, Sicamous-based After Dark Distillery had three batches of its alcoholic hand rub recalled in late August, due to “missing risk statements” and a product “not authorized to contain technical-grade alcohol.”

In an emailed statement, the B.C. government said Parallel 49 was “one of the few brewing companies that had pre-existing regulatory approval and supply arrangements to neutral grain spirit (ethanol).”

But Dyck says that wasn’t the case. As the head of the distillers guild, he said arrangements were made weeks prior to remove the red tape in the way of distilleries, eliminate excise on distillery-made hand sanitizer, and to fast-track Health Canada approval for distilleries to produce sanitizer.

“The government had been dealing with me and the distillers since mid-March, and we had already donated tens of thousands of litres between the distilleries,” he said, adding it was the province that reached out to him to ask what it would take to get B.C. distillers on board with producing sanitizer.

“I came back to them and said all it will take is covering the cost of production, but you’re far better to pay the cost of actually producing it here because it keeps the money in the province. It powers jobs and that money goes back into the economy.”

The fact that Parallel 49 was given a contract without a bidding process was “shocking,” Dyck said, since it came months after distilleries had started producing sanitizer.

Many of the 50-plus distilleries in the province are struggling financially after contributing to the emergency sanitizer supply, Dyck said.

And while the guild president didn’t sign a contract with the province, he said the onus is on the government to support those who donated hundreds of thousands to keep Canadians safe. “That is just wrong…and I think British Columbians will see that as being wrong, too.”