As of Aug. 5, Alberta craft beer brewers will no longer be able to take advantage of lower markup rates – but under a new grant program unveiled by the Alberta government, the financial impact to local small businesses should be offset.
“This change will ensure consistency for producers and consumers,” said Leah Holoiday, spokesperson for Alberta Finance in an email to the Rocky View Weekly. “This program will foster new local jobs, while ensuring small brewers are able to grow their business. This is an important step in supporting the Alberta Jobs Plan and a strong a resilient Alberta economy.”
The move reversed a previous initiative announced by the Alberta government as part of its 2015 provincial budget – which saw beer originating from small breweries in Alberta, British Columbia and Saskatchewan taxed lower than the $1.25 per litre on beer originating elsewhere.
Under the new regulations, all tax is set at $1.25 per litre regardless of the size or location of the company.
“When they initially talked to us brewers about it, the expectation was that it would be a grant that would pay us back the difference,” said Chris Heier, president of the Cochrane-based Half Hitch Brewing Company. “It was more of a manner of how it was implemented. Now that we do have the details, there’s not much for surprises.”
The government will disperse a maximum of $20 million per year under the program to Alberta’s small brewers. Heier said he anticipated that grant program would nullify any need to unload additional costs to consumers.
“Most Alberta brewers shouldn’t have to increase costs to make up for the cash flow,” he said. “Some breweries may have to foot the additional cash flow through a line of credit, and the interest charges might be carried through. But that’s up to the brewery.”
Other concerns were raised by Progressive Conservative Interim Leader Ric McIver.
“This is consistent with the NDP’s pattern of adding taxes everywhere and rebating some of them back,” he said. “I’m glad they’re doing something for the small breweries, but what every Albertan should remember is when beer costs you more for the rest of the summer, this is the NDP’s additional tax on many beers that you’re buying.
“The NDP pattern is attempting to create dependency, which they have now done with Alberta brewers – they now have a dependency on a rebate from the Alberta government. So it’s completely counter to having a free market economy.”
