Great Western Brewing, Steam Whistle, win latest battle in Alberta beer war

Ontario-based Steam Whistle Brewing and Saskatchewan-based Great Western Brewing were granted injunctions against Alberta’s rebate program for the province’s small brewers.

Breweries allege rebate program for small Alberta brewers is unconstitutional

The Alberta government's efforts to help this province's small craft brewers has raised the ire of out-of-province brewers. (Colin Hall/CBC)

An Alberta court granted an injunction Tuesday to Ontario-based Steam Whistle Brewing and Saskatchewan-based Great Western Brewing Company against Alberta's rebate program for the province's small brewers. 

Both breweries allege the Alberta Small Brewers Development Program, introduced by the Alberta government in August, is unconstitutional because it creates a barrier for out-of-province breweries.

The companies are pursuing separate legal actions but both cases were heard in a Calgary courtroom on Tuesday. 

For Great Western Brewing Company, the injunction means the markup will revert to the 48 cents a litre the company was paying  prior to Aug. 5, said president and CEO Michael Micovcin.

"For us, Alberta represents 60 per cent of our sales and business has been hurt quite badly since the new markup went into effect in early August," he said. "So we're obviously very pleased with the decision."

Micovcin said the temporary relief won't result in the company going back to pre-August prices.

The company will be back in court to argue the larger constitutional case in May. If the company loses, it will be obligated to pay back the difference in the markup to the Alberta government. 

"It's going to certainly help us be more competitive but we won't be able to completely roll the clocks back," he said. 

Greg Taylor, one of the founders of Steam Whistle, said in a news release that his company is fighting back to make beer taxes "fair and equitable" across the country.

"We want to help create a climate that cultivates the fledgling craft beer industry which is creating much-needed manufacturing jobs in cities and towns across Canada," Taylor said.

This is the second injunction granted to Steam Whistle. In January, the company went to court over the previous attempt by the government to help Alberta's small brewers.

Finance Minister Joe Ceci, minister in charge of the Alberta Gaming and Liquor Commission (AGLC), would not comment on the court case. The program has been well-received by Alberta's small brewers and will continue, he said.

"We're going forward with what we have set in place," Ceci said. "It's diversifying our beer industry, and it's helping out."

Last fall, the AGLC instituted a new graduated markup based on volume produced that favoured small brewers. The smallest producers were given a markup of just ten cents a litre, while producers from out of province were levied a markup of $1.25/litre.

After the industry complained, the AGLC instituted a markup of $1.25/litre for all beer regardless of its origin. Alberta craft brewers that produce and sell less than 300,000 hectolitres each year could then apply for a monthly rebate.

Steam Whistle still wasn't happy. Neither was Great Western Brewing, based in Saskatoon, which filed its own court challenge.

The Alberta government maintains the province has the most open beer market in Canada, which has benefited out-of-province brewers and made it hard for Alberta brewers to compete.

Saskatchewan and Ontario have liquor commissions that operate stores in those provinces. The Liquor Control Board of Ontario gives preference to Ontario-based wines and craft beers.

Taylor, of Steam Whistle, said he is offering to help Alberta brewers get into the Ontario retail market and wants to feature them at a winter craft beer festival in Toronto next year.