Al­berta launches beer trade chal­lenge against On­tario, can­cels small brew­ers grant pro­gram

Fort McMurray Today - - ALBERTA NEWS - CLARE CLANCY [email protected]­

Al­berta has taken the first step in a trade chal­lenge against On­tario over what cabi­net min­is­ters de­scribe as un­fair liquor poli­cies that dis­ad­van­tage brew­ers.

The govern­ment also can­celled the Al­berta Small Brewer De­vel­op­ment pro­gram, which was part of a drawn-out bat­tle over beer pric­ing af­ter the NDP over­hauled the beer markup sys­tem.

“To put it sim­ply, it doesn’t make sense that it’s eas­ier to sell Al­berta beer in Tokyo than it is in Toronto,” said Eco­nomic De­vel­op­ment and Trade Min­is­ter Deron Bilous at a news con­fer­ence held at Blind En­thu­si­asm Brew­ing Com­pany in Ed­mon­ton. “It’s ridicu­lous and it’s un­ac­cept­able.”

The trade chal­lenge aims to ad­dress bar­ri­ers that Al­berta pro­duc­ers face putting bot­tles onto On­tario shelves, he said. Al­berta lists 3,700 prod­ucts from other places in Canada, in­clud­ing nearly 750 from On­tario.

“Yet we can only find about 20 Al­berta liquor prod­ucts listed for sale in On­tario,” Bilous said. “We are ask­ing for eq­ui­table mar­ket ac­cess in On­tario.”

The chal­lenge was launched Mon­day with a let­ter sent to On­tario’s trade min­is­ter, trig­ger­ing a con­sul­ta­tion pe­riod be­tween pro­vin­cial gov­ern­ments un­der the Cana­dian Free Trade Agree­ment. There’s 120-day dead­line.

Bilous said though other prov­inces also have un­fair liquor rules, On­tario was tar­geted be­cause it has the largest mar­ket and is “the most egre­gious.”

“They’re un­will­ing so now we’re go­ing to go through the courts,” he said. “It doesn’t mean that will be the only trade chal­lenge Al­berta is­sues.”

Neil Herbst, co-owner of Al­ley Kat Brew­ing Com­pany and chair­man of the Al­berta Small Brew­ers As­so­ci­a­tion, voiced his frus­tra­tion with the cur­rent rules.

“We’ve sold beer in South Korea but we can’t sell beer in On­tario, or B.C., or pretty much any other prov­ince,” he said, adding that non­tar­iff bar­ri­ers in­clude stor­age fees, re­ceiv­ing fees and lab fees.

“It seems like any time you think you can get in … there’s some­thing new that is ap­plied.”

Markup sys­tem re­vamped

Fi­nance Min­is­ter Joe Ceci said the con­tro­ver­sial small brewer grant pro­gram will end Dec. 15.

In its place, the prov­ince is launch­ing a uni­ver­sal small brewer markup for pro­duc­ers who make less than 50,000 hec­tolitres of beer an­nu­ally. El­i­gi­ble brew­eries will be sub­ject to markups of be­tween 10 and 60 cents per litre, much less than the stan­dard $1.25 markup.

“Small brew­ers in the Al­berta mar­ket, re­gard­less of where they’re from, will now be able to ap­ply for a re­duced markup rate on the sales of their prod­uct,” Ceci said at the news con­fer­ence. “Brew­ers will be able to use their ad­di­tional funds to rein­vest in their busi­nesses, hire staff and bring for­ward new prod­uct of­fer­ings.”

It’s a re­turn to sim­i­lar rules adopted by the Al­berta govern­ment in 2002, which had a grad­u­ated sys­tem whereby the markup in­creased de­pend­ing on the size of the pro­ducer. Brew­eries mak­ing less than 20,000 hec­tolitres of prod­uct each year were sub­ject to a 20 cent markup com­pared to 40 cents per litre for pro­duc­ers mak­ing up to 200,000 hec­tolitres. Higher markups ap­plied to even larger brew­eries.

Ini­tially, the NDP in­sti­tuted the $1.25-per-litre rate 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 the soonto-be-de­funct grant pro­gram in­stead.

The Great Western Brew­ery Co. in Saska­toon and Toronto-based Steam Whis­tle chal­lenged the markup sys­tem ar­gu­ing that it cre­ated in­ter­provin­cial trade bar­ri­ers. In a June rul­ing, they won the suit and were awarded more than $2 mil­lion in com­bined resti­tu­tion pay­ments.

In a sep­a­rate case, Cal­gary-based Ar­ti­san Ales Con­sult­ing claimed the pro­gram cut into its beer im­port busi­ness by un­fairly rais­ing the cost of prod­ucts brewed out­side Al­berta.

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

The de­ci­sion gave the prov­ince six months — with the dead­line this week — to change the pro­gram.


Head brewer Spike Baker checks his still in­side Wood Buf­falo Brew­ing Com­pany in Fort Mcmur­ray, Alta., on Thurs­day June 9, 2016.

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