N.S. craft brewers say Alberta subsidy ruling good for industry, more work to be doneJune 13, 2018
HALIFAX—After the Alberta craft beer subsidy program was ruled to be in violation of inter-provincial trade agreements Monday, players in the Nova Scotia craft brewery industry say that type of protectionist measure hurts the whole Canadian craft beer industry.
A panel with Agreement on Internal Trade ruled that Alberta’s system of non-repayable grants issued to eligible breweries gave them an unfair advantage in Alberta’s beer market, after a small beer import business filed a complaint.
Alberta had previously tried to levy higher taxes against brewers from outside of western Canada, but that was struck down by a panel after a complaint from the same small import business.
“I’m sure a lot of provinces are looking now saying, ‘Gee what does this mean for us?’” said Kirk Cox, executive director of the Craft Brewers Association of Nova Scotia.
“If a province does have rules that restrict other breweries from out of province coming in, because that’s all that Alberta thing was, it was a way to make it more difficult for breweries from out of province to come into Alberta … provinces out there that have similar rules are going to have to look at that.”
Cox says he would like to see governments supporting the industry as a whole not just particular breweries in their own province.
“As a general rule, we would prefer that governments bring in a suite of policies that support an industry as a whole … rather than a subsidy to specific breweries,” he said.
“We’ve never asked for that and we don’t think that providing subsidies or handouts to specific breweries makes us any more competitive.”
Cox says that the biggest issue facing the Nova Scotian craft beer industry is antiquated parts of the Liquor Control Act that were put in place when the province was only dealing with a few large breweries — which has now drastically changed with over 50 small producers in Nova Scotia.
“You know, in most of our provinces, we still have rules that were made when there were a couple of large breweries in town and that was it. The industry’s just changed so much that a lot of these simple things could just be modernized,” Cox said.
“Another rule is that is changing in this province … is that in order to get on a NSLC shelf you need to have enough capacity in your brewery to provide beer for 35 stores. Which, for smaller breweries, it’s a challenge … Individual stores, NSLC stores, will be able to pick up their own lines or their own product, providing flexibility in the system.”
Although progress is being made, Cox says there’s always more that can be done. In Nova Scotia, craft breweries are only allowed to serve beer that is made on premises, something Cox would like to see changed so breweries can carry each other’s beers.
“Something progressive might be for us to be able to sell other breweries’ beer on our premises or be able to sell beer from other provinces on our premises … Those actually open up the market, they’re not designed to shut anybody out,” he said.
The owner of Propellor Brewing, which was one of the first to start lobbying the Nova Scotia government for better beer rules when it opened 20 years ago, agrees that improving the climate for the craft beer industry is always a work in progress.
“It’s easy to put, you know, a couple of broad recommendations and then maybe not so simple to implement them,” John Allen said.
“We have been working with the provincial government and the NSLC to improve the business climate for the breweries. This has been going on for years and it’s, you know, it’s been moderately successful.”
Allen agrees that protectionist policies hurt craft beer in Canada and sees a lot of frustration from fellow brewers over some of the rules in the Atlantic region.
“One of the frustrations is we are charged a remittance on beer that we’re selling to New Brunswick that is not reciprocally charged. The NSLC does not put a surcharge or a remittance fee on New Brunswick kegs that come in,” Allen said.
“We need freer access to other provinces, and to be treated in the same manner as the other provinces. We’ve got a small market down here, a small crowded market. In order for us to be able to grow, we have to be getting beer on the shelves in other provinces with fewer barriers. It’s gotta go both ways.”