Court deals Alberta new setback in beer battle

EDMONTON A court has ruled against the NDP’s beer markup regime, the government’s latest setback during a drawn-out battle over beer pricing.

In its ruling Tuesday, the Court of Queen’s Bench determined the markup of $1.25 a litre on beer and a related rebate program were unconstitutional. The court also handed down more than $2 million in combined restitution payments to breweries that launched the case.

The bulk of the cash — more than $1.9 million — will go to the Great Western Brewery Co. in Saskatoon, with the rest to Toronto-based Steam Whistle. The companies argued Alberta Gaming and Liquor Commission (AGLC) policies violated the Constitution by creating interprovincial trade barriers.

In response, the province is considering all its options, including possible court action, Finance Minister Joe Ceci said Wednesday.

“I want small brewers and liquor manufacturers in this province to know that we’ll continue to have their backs,” he told reporters. “We believe that diversification is critical and they’re part of that whole initiative to see Alberta get off the oil-and-gas roller-coaster.”

The Great Western Brewery Co. experienced a 166 per cent increase in its markup under the rules, said a company news release.

“We look forward to a new beer markup structure that will be fair and equitable to all brewers,” said president and CEO Michael Brennan in a statement.

The court ruling follows ongoing disputes over changes the Alberta government put in place in late 2015, when it overhauled the beer markup system. Initially, the $1.25 a litre markup was placed on beer with the exception of breweries in Saskatchewan, British Columbia and Alberta. But in summer 2016, that exemption ended, and Alberta brewers were eligible for a grant program instead.

Earlier this month, a trade panel found the grant “distorts the playing field and, as such, results in ‘less favourable treatment’ of beer produced in other provinces.”

The case was launched by Calgary-based Artisan Ales Consulting, which claimed the program cut into its beer import business by unfairly raising the cost of products brewed outside Alberta.

A three-member appeal panel agreed and concluded the grant wasn’t trade compliant May 29. Alberta was granted six months to change the program.

Tuesday’s court decision found the markup and grant were intended to operate simultaneously and created a trade barrier.

Ceci reiterated Wednesday that the government will revisit its small brewers development grant.

“We’re going to be taking our time,” he said. “We have the most open liquor system of any province in this country,” he added. “We know that other provinces put barriers in place for our beer and alcohol getting in ... with tasting panels and onerous application processes ... and limited shelf space.”

UCP finance critic Drew Barnes chastised the NDP for what he called protectionist beer policies.

“The finance minister should spend less time at the pub and more time developing thoughtful policies that are in the interest of all Albertans,” he said in a statement.