Two weeks ago, Victoria Spirits earned $29 for every $50 bottle of gin sold in its tasting room on Vancouver Island. Now, the distillery makes just $19.

That drop in revenue is a result of one of the many changes to B.C.’s liquor policy introduced on April 1.

Even though the liquor is made on site and never leaves the premises, some micro-distilleries are still required to pay a large percentage of their proceeds from tasting room sales to the Liquor Distribution Branch. They do receive a commission for this, much like a car salesman receives a commission for selling vehicles, above what they would get if their product was sold in a liquor store. But as of April 1, that commission has been slashed from 30 per cent to seven per cent.

That means a substantial hit of more than 20 per cent of Victoria Spirits’ revenues, according to distiller and manager Peter Hunt.

“We’re fine with paying a markup for sales through the B.C. Liquor Board, because they’re providing a service for us, but when we make it and sell it on site … they don’t even see the product. They don’t do any distribution for us or any sales for us,” Hunt said.

The Liquor Distribution Branch argues that the distilleries can always set their tasting room prices higher if they want to increase their revenues.

The change in commission reveals a stark divide between small distilleries that have earned a “craft” licence and those, like Victoria Spirits, that haven’t.

Craft distilleries take home 100 per cent of the proceeds from sales in their tasting rooms, and can sell directly to restaurants without paying a markup to the Liquor Distribution Branch. To be designated as craft, a distillery must produce small amounts, ferment and distil on site and use only raw materials from B.C.

According to Liquor Distribution Branch spokeswoman April Kemick, the designation is meant to promote B.C. agriculture, tourism and small business.

But for a handful of distilleries — particularly those that specialize in gin — the craft criteria are nearly impossible to meet because of the requirement for local raw materials.

“We would have to essentially completely change the formulation of our gin, which is made in the traditional way, using a neutral grain spirit that we get from outside B.C.,” Hunt said.

“We’ve tried to get it from a closer location, but it’s not something we’ve been pleased with, product-wise.”

Anyone who wanted to make rum would also likely forgo craft designation, since B.C. doesn’t produce sugar beets in significant numbers. The same goes for tequila, distilled from the agave plant.

Another challenge for some distilleries is the province’s new wholesale pricing model, also introduced on April 1. Peter Kimmerly of Island Spirits Distillery on Hornby Island said his revenue on sales through the Liquor Distribution Branch are set to drop by 17.25 per cent.

“That puts me out of business, and that offends me, so I’m reacting,” he said.

“I make this stuff … and they tax the living daylights out of it.”