Author: Jim Phelan
Liquor taxes have been in the news recently, with the freshman Alberta NDP government introducing a new set of AGLC (Alberta Gaming and Liquor Commission) mark-up rates on October 27th. To understand what that means for you, the consumer, we’d like to explain where these changes have come from and what has changed.
Alberta’s past couple years contained some dramatic political changes – ousting a conservative Premier in March of 2014 before the “Orange Crush” booted Alberta Conservatives out of office and brought Rachel Notley’s NDP into power on May 5th, 2015. During this time, many governance issues experienced some flip-flopping – including liquor mark-ups. The previous government introduced changes to the system in March – and new NDP government just released changes again with the new budget.
Overall, the changes are nothing too drastic and mostly affect the beer market. It’s worth keeping in mind that Alberta’s rates are reflected in real dollars per litre rather than a percentage and as such they need to be re-adjusted regularly. This year was a bit irregular because there were two incremental ‘inflationary’ increases within a year’s timeframe. On the face of things the most drastic changes are to the small brewer markup, which now only applies to brewers from Alberta, British Columbia, and Saskatchewan. Yet this protectionist system is not unprecedented – it is in fact a reversion back to the system in place prior to March of this year. Under the pre-March system, the low rates only applied to brewers within Alberta.
The biggest actual changes apply to smaller craft brewers from outside those three provinces. Before March of this year the mark-up for an American micro-brewery producing less than 20,000 hectoliters annually paid $0.98 per litre. At the same production rate the same brewery would have switched down to $0.20 per litre between March and October. As of the new budget, the current rate jumps to $1.25 per litre, a change which consumers will notice affect prices on the shelf.
Low ABV (alcohol per volume). High production beers experienced the least change – moving from $1.20 to $1.25 per litre. High ABV markups jumped about 20 cents per litre in each category, and ciders did the same, going from $1.57 to $1.81 for lower ABV and from $4.27 to $4.51 for higher ABV.
All in all, the changes give a significant advantage to local products, particularly those from BC and Saskatchewan, as Alberta producers were always taxed favourably, while imported and eastern Canadian craft products experience the most jumps. High ABV beer and all ciders are experiencing a more modest change.
Nevertheless, craft lovers, the revolution marches along!
Hope to see you all soon,
Your friends at deVine’s