A grant announced last week will see small local breweries, such as Cochrane's Half Hitch, benefit by enabling them to continue with a low mark up.
Alberta Jobs Plan says starting Friday August 5, Alberta based brewers who produce/sell no more than 300,00 hectolitres in Alberta annually, will be eligible to participate in the Alberta Small Brewers Development Program.
Chris Heier, President of Half Hitch Brewing Company, says the NDP government has been supportive of small brewers in Alberta and what they are trying to achieve.
Heier shares the grant is a measure being put in place, but it does have it's history.
"There has been some concerns over the fact that breweries outside of the US and elsewhere in Canada were taking advantage of the brewers mark up we had in Alberta. Alberta is unique with the privatization system, it is very easy for breweries outside of the province to get beer into the province where it is no where easy to try to get beer into other province's."
The long history of the NDP attempting to change the system in which beer was taxed and marked up will once again face change, currently Alberta brewers are taxed at $0.10.
"Essentially, what is going to happen this week the mark up on all beer coming into the province is going from whatever we are paying currently to $1.25/L no exceptions whether you are in Alberta, BC, Saskatchewan everyone is paying a $1.25/L; in order to allow Alberta brewers to still take advantage of a lower mark up, Alberta Gaming Liquor Commission (AGLC) as well as Alberta Agriculture and Forestry are working together to be able to provide information about what our production is, so that they grant us back a $1.15/L based on what we sold for that month."
In the end, Heier says essentially a small brewer will be paying the same tax and although revenue should not be affected, a cash flow concern could be felt.
"Effectively our revenue is going to be the same. Let' say I sell a 50L keg, that's only $5 in markup that the AGLC takes. Right now that goes from $5 to $62.50 come Friday. So I will see the difference come back at the end of the month, so $62.50 minus $5 that's how much less money I will make at the end of every week but I'll get it back at the end of the month."
There are pros and cons to the grant, says Heier, but luckily with Half Hitch just starting up, they may not feel the pinch like some other brewers in Alberta who will have to adjust how they do purchasing etc. and effectively managing their monthly expenses.
"We don't really have a history working with the current administration and regime as far as invoicing and wholesale costs so it's going to be relatively easy for us to try and get things figured out on the newer system. We get to plan accordingly."
Heier says the intentions are good, as the NDP diversifies and looks to help industries outside of oil and gas. While the grant won't necessarily provide aid in new ways, it will enable smaller Alberta breweries the opportunity to maintain their revenue
Heier says while Half Hitch will not be changing their prices on the wholesale level, consumers could see a change in price from other breweries.
In the end, Heier adds they will be watching how everything plays out.
"It will be an interesting few months to see how things go."
On a positive long- awaited note, Half Hitch is just in the process of canning and will be available for retail purchase shortly.