Inter-Provincial Alcohol Trade Still Behind the Times

In Alberta, we are fortunate to enjoy a wide selection of craft and micro-brewed beers from around the world. It makes for an interesting and dynamic market for producers, who have to keep on top of world trends and compete with vast pricing differences and economies of scale. No complaints, we love our market and we love the selection it provides.

It astounds us that Alberta's is the only open alcohol market in Canada. We have 10 provinces and 3 territories, and only one of them, with a population of just over 4 million, allows in alcohol from anywhere to be enjoyed by the people that live there. Astounding.

We are disappointed to learn of the Supreme Court of Canada's decision to uphold interprovincial trade barriers for alcohol markets. It basically means that the transportation and trade of liquor produced in Canada cannot be sold province to province. It isn't the Federal Government's fault, it's the provinces. Alberta is the only province in the nation that has embraced an open-market when it comes to liquor trade. If you're curious about details: this is what it takes to list a liquor product in Alberta:

1. Register the product with the AGLC ($75 listing fee)

2. Distribute through an accredited warehouse in the province (there are several to choose from).

As a bit of a social experiment, we attempted to register our product in several other provinces. The easiest one was Saskatchewan, because a client there is requesting our product, so they actually approached us! (Cool). In BC, we can't get our product into the province because of warehousing fees that would price us out of the market, and the BC government's requirement to list our product with a BC agency, instead of with the government agency itself. Essentially: it would be easier for us to open a brewery in BC (and cheaper) than to export our product into Kel's home province, which is a bit of a bummer.

Ontario is even worse: You can list your product with the AB-Inbev owned Beer Store chain, and the LCBO, but a single listing can cost in the tens of thousands of dollars. Once you ship your product there, it can hang out in limbo, a quarantine warehouse, for months before hitting store shelves, which means that the product will not be fresh, and could have quality issues.

In Quebec, it is very similar to the Ontario situation, some breweries we have talked to have cited 10+ months of wait time to get their product to store shelves, and tens of thousands of dollars per sku for listing their products in that market (compared to $75 in Alberta).

What we were hoping for: was a Supreme Court Decision that says these exhorbitant fees and trade-blocking practices would be ruled as unconstitutional. The decision, beyond logical comprehension, went the other way-- and our current practices were maintained. That essentially means that while breweries across Canada can list in Alberta and dump product into our province, there is no mechanism for Alberta breweries to sell product in other Canadian markets because of those markets being so closed off.

So with the courts basically saying "status quo is go", it comes down to the consumer to demand better of their governments and open up inter-provincial markets. Keeping the status quo as is, actually only hurts the craft-producing market Canada Wide, because it keeps those avenues closed to craft producers. Keep in mind, Domestic Producers like Molson, Coors, Labatt's, and Pilsner are all owned by multi-national conglomerates and operate their own warehouses in each province (set up at the end of Prohibition in 1924-26 depending on what province you are looking at). This essentially means that those trade barriers between the provinces (conveniently) don't apply to them as they have already established their own networks of moving product outside of those barriers. It must be nice to make up and play by your own rules.

By creating a greater market inter-provincially for regionally and locally produced craft alcohol products, small craft producers have a better chance of surviving market fluctuations. By keeping them closed: the courts are basically assuring that small craft producers stay small, and the big domestics maintain that beautiful 90% market share that they have enjoyed since the mid 1920s.

So: make it a talking point in your province, ask your governments to open up borders and stop with the shenanigans. It's time to let Canadian Craft Beer flow, province to province, territory to territory, across the True North. Cheers.

Kelti Baird