Yahoo Finance Saskatchewan, Alberta premiers discuss their beer beef
Saskatchewan Premier Brad Wall is meeting with Alberta Premier Rachel Notley today in Whitehorse to discuss Alberta's new beer markup and grant policy.
Wall has criticized the plan calling it against the spirit of inter-provincial trade and even threatened retaliation.
"We'll have to look at Saskatchewan's interests and perhaps that could mean retaliating but that would be a last resort," Wall said this week.
The new policy introduced by the Alberta government last week will charge brewers regardless of size $1.25 per litre. It will also offer grants to Alberta's smaller craft breweries to help stimulate the industry.
Notley said if the premier had a problem with the policy, he should pick up the phone. Wall told reporters on Tuesday that his officials reached out to their Alberta counterparts and told them they would be speaking out.
"I will not be lectured about any efforts that our government might take in the future in order to support our small brewers, our economic diversification, our workers and our industries," Notley said on Tuesday.
Great Western CEO disappointed by Alberta policy
Saskatchewan's biggest brewery, Great Western Brewing in Saskatoon stands to lose money if the new beer markup goes ahead on August 5.
"We were pretty shocked and disappointed with what they announced last week," said Great Western CEO Michael Micovcin.
The Alberta market represents 60 per cent of Great Western's business.
As of August 5, the markup will go to a flat rate of $1.25 per litre, representing a 78-cent-a-litre increase to Great Western products.
It means a six-pack that currently sells for $11 in Alberta will soon cost about $12.66. For a case of 24, the increase would be around $6.65.
"I think the consumers of Alberta are going to be the big losers," Micovcin said. "I expect to see a lot of out-of-province beers pulling out of the province because they simply can't compete with the higher tax rate."
500 beers versus almost 5,000
Great Western currently pays $0.47 per litre, which will rise to $1.25 per litre. However, they pay a significantly higher cost in their home province of $1.94 per litre.
Alberta is the only province with an open border for liquor. It has a full private liquor retail system, Saskatchewan has mix of public and private.
Jason Foster, an Edmonton-based beer blogger studied regulations in the two provinces.
"If you want to sell beer in the province of Alberta you fill out a two-page form, pay $50.00 and you are in," Foster said.
"Saskatchewan has a gate-keeping process. You file your application, it goes to some civil servants in Regina who make an evaluation of whether they are going to let the product into the province or not," Foster said. "They often will turn down applications and they don't have to give any reasons why."
"Currently at the SLGA there are 571 listings for beer. In Alberta, that number is almost 4,600," said Foster.
He predicts Saskatchewan and B.C. brewers will have to raise prices slightly but will not leave the market if they have a sizable share.
