Regulations could encourage more local beer
Alberta’s craft brewers and distributors are on the fence about new beer legislation.
If you like craft beer and live in Alberta you may have noticed there’s something in the air lately — and it’s not just the piney sticky scent of hops. Alberta’s craft beer scene seems poised for big things with new breweries such as Tool Shed opening and local brewers like Village receiving national awards.
Add to that a recent change to the province’s liquor licensing laws which eliminated the minimum capacity requirement to launch a new brewery and you may think Alberta will soon be rivalling larger craft beer scenes like those in B.C. and Ontario. But some of the province’s craft beer producers and distributors are on the fence about the impact these new Alberta Gaming and Liquor Commission rules will really have on the industry.
The change in legislation last December was initially heralded by many as the launching pad to propel the growth of small nano-breweries in the province. Many pointed to Tool Shed Brewing (one of the owners drove up to Edmonton to apply for a licence the day after the legislation was announced) as a sign that the new rules would be embraced by craft brewers and provide much-needed support in a market dominated by imports.
“This change makes the growth of craft brewing in the province authentic” says Tool Shed’s Graham Sherman. “Now there’s no ridiculous barrier of entry. If a homebrewer starts making [and selling] great beer that’s fantastic.”
Sherman notes however that the new legislation won’t help Tool Shed as much as it will other microbrewers who want to take advantage of the changes since Tool Shed’s brewhouse and business plan had already been developed to meet the previous legislation.
Other craft brewers and distributors are not as confident the new legislation will change much. Alan Barrie president and owner of speciality importer Bottoms Up Beverage is among them.
“Running a microbrewery is a tough grind” says Barrie who ran his own craft brewery (Banff Brewery) in the mid-1990s. Barrie points to Alberta’s privatized market where beers compete with 2500-plus local and imported products. “The net result is a market glut of product and brands — all fighting for retail shelf space draft accounts and consumer share of mind.”
In addition he points out that the new legislation did nothing to address taxation which he calls “the key issue for microbewers in Alberta.” Currently small brewers producing up to 20000 hectolitres are charged 20 cents per litre whereas brewers producing between 200000 to 400000 hectolitres are charged 40 cents per litre. Large brewers producing more than 400000 are taxed at 98 cents per litre.
Since the cost per hectolitre of beer production is high brewers need to get their volume up to be profitable notes Barrie. He and a number of members of the Alberta Small Brewers Association have been calling on the provincial government to give craft brewers more of a tax break such as those existing in Ontario and B.C. Barrie points out that craft brewers in Ontario receive tax support under the Ontario Microbrewery Strategy while brewers in B.C. receive government support for their products such as liquor stores promoting local beer and wine front and centre.
Jim Button co-owner of Village Brewery is also lukewarm when it comes to the impact the new legislation will have on Alberta’s craft beer scene.
“At a broad glance eliminating the minimum volume required to launch a brewery makes sense” says Button. But he’s concerned that Alberta’s craft brewers are not operating on a level playing field in the province’s free market. In Alberta’s current market scheme companies outside of Alberta can benefit from the same tax relief as those within in addition to the tax breaks in their own locations.
“That’s the downside to being in Alberta” he adds. “However the last thing I would want is to get rid of the free market. I’d rather level the playing field.”
Sherman disagrees with these concerns. “When Jeff [Orr Sherman’s business partner] and I built our business plan we thought: here are the cards that are dealt to us. We can either build a brewery in Alberta or not. Now we’re maybe two of the only homebrewers in Calgary who got a brewhouse started.
“If the beer is better than the imports it will sell” says Sherman who has just quit his day job to start brewing full-time. “We want to turn heads because we’re making good beer and get people buying local beer.”
Regardless of which side of the fence they’re on both Tool Shed and Village Brewery are flourishing. Tool Shed signed the lease for its new brewhouse in late February and expects to start receiving equipment in June. Meanwhile Button and the team at the Village Brewery recently celebrated their second anniversary and received the Start-up of the Year Award at the national Air Miles Small Business Awards.
“It’s not an easy industry to succeed in. You have to do it because you’re passionate about it” says Button.