GrainsWest Winter 2017

30 / 44

Winter 2017 GrainsWest 30
little bit longer,” Berard said. “You just
have to be a little bit more aware of the
accounting practices, and where and
when things are coming in, and what
you’re spending.”
Bredo also mentioned the cash
flow problems introduced by the
monthly grants, but added, “it’s not a
massive downside.” However, he did
acknowledge that “for small businesses,
‘monthly’ can be a long time.”
Alberta beer commentator Jason
Foster, who operates the
beer blog, pointed out one potential
complication of the new tax arrangement
in a post on his site when news of the
changes first broke. While consumers
pay for the increased markup, the
small brewer grants go directly to the
breweries. In theory, this makes sense,
as long as brewers use the grant money
to keep their retail prices constant.
However, since this is not a requirement
of the grant program, the door is
technically open for breweries to hike
their prices slightly while still collecting
the full grant amount. As Foster
elaborated, this would allow a brewery
to increase its profit margins while still
keeping its prices lower than those of its
imported competitors who are subject to
the full $1.25 markup rate.
Despite this potential loophole, most
Alberta breweries have no plans to raise
the price of their beers as a result of the
new policies.
“We kept our pricing as is, we didn’t
alter anything,” Berard said. “We didn’t
really want to pass it on to the customer.”
Bredo shared a similar sentiment. “Our
pricing stayed the same, because to me,
the intention isn’t for us to make more
money,” he said. “It’s to give us a bit of an
advantage in the market.”
On the whole, most of Alberta’s
brewers agree that the government’s
latest strategy for promoting local beer
isn’t perfect, but it’s an excellent step
toward a prosperous and sustainable
craft beer industry in Alberta for many
years to come.
“The industry is evolving and I
think Alberta’s evolving with it. The
government’s doing its best to make us
competitive, help us out and get some
growth started in the industry here,”
Berard said. “So is it perfect? No. Is
anything perfect? No.”
Rock said that until all the other
provinces open their borders and
embrace true competition in the beer
sector, the new system here in Alberta
is necessary in order to fully develop the
potential of the province’s craft brewing
industry.
“We’re ready to compete. We want
open markets. We want fair competition
across the country,” Rock said. “That’s
where we need to put in effort. In the
meantime, let’s grow the industry here,
and the program that’s in place will
do that.
“There’s no reason that brewing
couldn’t be a signature industry for
Alberta. It’s that notion of thinking
about value-added agriculture and
focusing on that as part of our economic
diversification strategy for Alberta. So I
think that’s one of the reasons that it’s so
important and interesting to see what we
can do with this industry.”
CHEERS FOR ALBERTA BEERS: Banded Beak Brewing co-founder Matt Berard applauded the provincial government’s new beer markup and
grant system and said it should help make small breweries in the province more viable.