Saskatoon-based Great Western Brewing Co. announced Oct. 18 it is filing a court challenge, arguing Alberta’s rules violate constitutional protections on trade freedoms among provinces.
“The Alberta government has put in place a tax structure that clearly disadvantages any out-of-province breweries from doing business in Alberta,” Michael Micovcin, president of Great Western Brewing, said in an interview.
“A significant portion of our total company sales are actually in Alberta, so it’s something we felt we had no choice but to pursue.”
Micovcin declined to be specific, for competitiveness reasons, on the impact of the mark-up. But he said the company has seen a dramatic change in sale trends as a result of the policy.
Great Western Brewing employs 100 people, including 15 in Alberta.
Alberta Finance spokeswoman Leah Holoiday declined to comment on the issue, given that it’s now before the courts.
But in an email, Holoiday said the mark-up is fair to all producers and that “Alberta has the most open liquor market in all of Canada, with more than 7,000 beer products available to Alberta consumers.”
Alberta Finance Minister Joe Ceci implemented changes to the beer mark-up in August in a bid to help homegrown craft brewers flourish.
Previously, Alberta brewers paid less on the mark-up, with a sliding scale starting as low as 10 cents a litre. Brewers in Saskatchewan and B.C. got the same deal under the free trade New West Partnership Agreement.
The mark-up is now $1.25 a litre for all beer sold in Alberta, regardless of where it is made.
Under the program, Alberta brewers who produce less than 30 million litres per year get rebates on a sliding scale based on their sales up to a maximum of $12 million.
The Saskatchewan government has complained about the change, saying it violates the spirit of the New West Partnership deal.
However, Alberta Premier Rachel Notley has said brewery rules already have many exemptions and unfair provisions, and that she will do whatever is necessary to grow the industry her province.
Alberta has the most open beer market in Canada, with sellers simply having to fill out a form to sell. Access to shelves in other provinces is controlled by liquor boards.