Province to appeal ruling that quashed markup on beer

‘It is ridiculous’: Alberta must stand up for its liquor industry, Notley says

Alberta will appeal a court decision that found the NDP government’s beer markup to be unconstitutional, Premier Rachel Notley said Monday.

Last month, the Court of Queen’s Bench found that the province’s $1.25-a-litre markup on beer — in concert with its grant program for small brewers — acted as a trade barrier to out-of-province breweries.

The court ordered the province to pay over $2 million in restitution to the companies that brought the case, Saskatchewan’s Great Western and Ontario-based Steam Whistle.

But Notley told reporters at her Stampede breakfast that the government will appeal and seek a stay during the course of court action.

She said it was important to stand up for Alberta’s liquor industry.

“When you lose, you appeal,” said the premier.

Notley said Alberta brewers face a hard time accessing markets outside the province because of barriers thrown up by other provinces, such as the product restrictions from government-owned liquor stores.

“It is ridiculous we have been able to get to this point where every other part of the country can protect its liquor industry and Alberta hasn’t,” she said.

Great Western CEO Michael Brennan said he “was not surprised” by Alberta’s position but his company will continue its legal fight with confidence it will win again.

“It’s not a constitutional tax and it needs to be repealed, so our stance will remain the same regardless of whether they appeal or not,” he said.

The province was ordered to pay Great Western $1.9 million in restitution.

The court ruling followed 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.

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

Derek From, a lawyer with the Canadian Constitution Foundation who helped with the complaint brought to the trade panel by Calgary business Artisan Ales, questioned on what grounds the government would appeal.

He said the NDP has run afoul of the law because it’s been clear that its beer policies were overtly aimed at brewers from other provinces.

It’s clear that the NDP just can’t admit their policy has failed, so now they’re throwing more money at the problem.

“This was all about discrimination right from the start,” said From in an interview Monday.

“What they did was egregiously illegal.”

From said the government does have a legitimate beef that other provinces keep Alberta liquor companies out of their markets by various means.

But the NDP’s actions to help the Alberta industry can’t violate the rules around interprovincial trade, he said.

The government has said it will revisit the small brewers grant to find ways to make it compliant with internal trade regulations.

In a statement, the United Conservative Party also criticized the government’s plan to appeal.

“It’s clear that the NDP just can’t admit their policy has failed, so nowthey’rethrowingmoremoney at the problem,” said finance critic Drew Barnes.