Great Western Brewing Company files court challenge of Alberta beer markup
Higher beer markup challenging company's viability, says Saskatoon-based brewer
Another brewery is taking the Alberta government to court over last summer's decision to charge the same markup for all beers, regardless of their place of origin.
The Great Western Brewing Company from Saskatoon announced Tuesday it has filed an action in court seeking to have the markup declared unconstitutional.
Steam Whistle Brewing from Toronto is also pursuing a similar action against the Alberta government.
Though the $1.25 per litre markup is uniform for all products, the Alberta government is offering monthly grants to small Alberta breweries that produce and sell up 300,000 hectolitres a year.
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The CEO of Great Western Brewing Company, Michael Micovcin, said his brewery used to be charged a markup of 47 cents per litre.
When the new prices came into effect on Aug. 4, the cost of a 24-can case of beer went up by $6.67, he said.
He wants the court to declare the markup and grant program unconstitutional.
"It is creating a tariff or a barrier for free trade between Alberta and other provinces," Micovcin said.
Alberta is responsible for 60 per cent of his company's sales. He said the markup has had a significant impact on his company's sales.
"That's why we felt compelled to pursue this legal challenge, because it certainly jeopardizes the future viability of the company."
Steam Whistle Brewing from Toronto was granted an injunction in January after the Alberta government introduced lower markups for Alberta small brewers in the October 2015 budget.
Micovcin said the decision to move to a uniform markup while offering grants to Alberta brewers was a "thinly veiled attempt to circumvent the previous court challenge."
Alberta's open liquor market
Finance Minister Joe Ceci is responsible for the Alberta Gaming and Liquor Commission, which sets liquor and beer markups.
Leah Holoiday, a spokeswoman for Ceci's office, said it was inappropriate to comment since the court action by Great Western Brewing is before the courts. But she pointed out that Alberta has the most open liquor market in Canada.
"The current markup system ensures a level playing field for all beer producers, no matter the region of origin or size of brewer," she said in an emailed statement.
Under Alberta's privatized liquor system, producers who want to sell their products in Alberta simply have to fill out a form to be listed with the AGLC.
The Alberta government thinks the open liquor market has made it harder for local craft brewers to compete with the thousands of products available from other producers.
Saskatchewan and Ontario have liquor control boards that critics say favour products from their own province to the detriment from those from other parts of Canada.
But Micovcin said the 1,400 private liquor stores in Alberta make it harder to compete because the market is fragmented.