Hotels, restaurants and their offsale outlets will be able to buy their alcohol for 10 per cent below retail prices beginning Feb. 2, it was announced Thursday afternoon.

Stacey Hassard, the minister responsible for the Yukon Liquor Corp., said the decision to create a wholesale discount for 140 licensed establishments provides the businesses with a stronger financial base to operate from.

Assisting the hospitality sector with its bottom line makes for a healthier Yukon economy overall, Hassard said in his first public announcement since being elevated to the territorial cabinet last Friday.

Hassard said many other sectors benefit from government incentives but this is the first for restaurants and bars, which employ an estimated 870 Yukoners.

“To be clear, the goal is not to reduce the retail price of liquor,” Hassard told a gathering inside Earls Restaurant.

“The goal is to assist small business operators with a wholesale pricing schedule similar to how other businesses purchase and re-sell products.”

Mark Hill, the liquor corporation’s vice-president, said the new policy will cost $1.6 million in lost revenue in sales to licensed establishments.

Peter Turner, president of the Yukon Chamber of Commerce, said the announcement comes at a good time with the approaching Sourdough Rendezvous winter festival and the peak summer tourism season.

It provides the hospitality sector with more ability to compete with other jurisdictions such as B.C., where the wholesale price for businesses is 12 to 13 per cent below the regular retail price, he said.

Earls co-owner Justin Munro told those gathered the new pricing scheme will not necessarily mean less expensive drinks with your meal.

Rather, it gives individual businesses greater flexibility in managing their business plan and determining how best to use the additional revenue, he explained.

Munro, also a vice-president of the Whitehorse Chamber of Commerce, said the announcement is particularly timely and helpful given the current state of the local economy.

For the Royal Canadian Legion, more revenue means more benefit for the community, Legion representative Daryl Kormos said in an interview following the announcement.

The Legion’s manager of bar services said by reducing costs and increasing revenue, the organization can direct more money to the veterans it serves and the local organizations it supports.

“This government has a vision of a prosperous and diversified Yukon economy, and introducing wholesale liquor pricing for the hospitality sector will help their financial position which translates into a healthier Yukon economy,” Hassard said.

“Wholesale liquor pricing is a small but significant adjustment to a sector that employs approximately 870 Yukoners.”

The liquor corporation is estimating net revenues of $13 million this year, with $8.8 million generated through profits and another $4.2 million collected in liquor tax, according to the annual territorial budget.

The $1.6 million in lost revenue would be equivalent to a 12 per cent reduction in the corporation’s profits if it were to apply to the 2014-15 fiscal year.

Mark Davey, acting president of the liquor corporation, explained this morning the new wholesale price will still cover the corporation’s cost of transporting and handling the goods.

There will be no impact on existing social programs directed toward services related to alcohol abuse because profits from the corporation are part of the government’s general revenue stream, and are not dedicated to specific programs, he explained.

“It is logical to provide those buying product in volume, with a wholesale discount,” Yukon Chamber chair Rich Thompson said Thursday in a written statement.

“This is consistent with many other jurisdictions and is an overdue and welcome change for Yukon food and beverage operators.

“We applaud the Yukon government for making this move and we are heartened by the fact that the government heard our appeals and quickly responded to deliver this change at a time when it is particularly tough to do business in the Yukon.”