Alberta Government Loses Agreement on Internal Trade Appeal, Must Repeal or Amend Brewery Rebate Program

CALGARY, ABCBC News reports that the Government of Alberta has lost its appeal against an earlier ruling by the Agreement on Internal Trade (AIT) regarding its Alberta Small Brewers Development Program (ASBDP), and has been ordered to repeal or amend the program within six months.

The roots of the case extend back to October 2015, when the Government introduced a graduated markup for breweries in the New West Partnership region (British Columbia, Alberta and Saskatchewan) that ranged from 10 cents to $1.25 per litre depending on the size of the brewery, while beer from outside of the region was subject to the $1.25 per litre rate regardless of brewery size.

The government changed the policy in July 2016, and implemented a standardized rate of $1.25 per litre for all beer sold in the province regardless of the size or location of the brewery. However, this was quickly followed by the introduction the ASBDP, a rebate scheme which essentially reduces tax rates for Alberta’s small breweries back to those in the previous structure.

Beer importer Artisan Ales filed a complaint with the AIT about the original markup structure, and remained opposed to the ASBDP once it was introduced. In July 2017, an AIT panel ruled in Artisan Ales’ favour, and the Government announced an appeal the following month, leading to today’s similar ruling which states the following:

The ASBD program provides a direct incentive to produce beer in Alberta, thereby putting producers of beer from other provinces at a competitive disadvantage in the market for beer in Alberta. For these reasons, we uphold the determination of the panel that the ASBD Program is inconsistent with Article 403 of the AIT.

In a statement posted on Facebook, Artisan Ales says that they “now call on Minister [of Economic Development and Trade Daron] Bilous and the Alberta government to follow through on their commitment to abide by the AIT’s panel ruling, and implement a beer policy that does not contravene trade agreements.”

The Alberta Small Brewers Association also released a response to the ruling, with chairman Neil Herbst stating, “We are confident that future actions by the Government of Alberta will be taken with our industry and with the continued growth and development of the local industry in mind. The Government clearly wants to see this industry grow and we look forward to partnering with them to ensure that continues to happen.”

At time of writing, the Government of Alberta had yet to release a response to the ruling.

UPDATE: The full report of the ruling is now available in PDF format on the AIT website.

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