CALGARY – Independent craft beer producer Muskoka Brewery has announced it will pull out of Alberta, British Columbia and Saskatchewan by the end of 2015, saying a recent tax increase by the Alberta NDP government has created “unacceptable conditions.”
The three provinces established an agreement called the New West Partnership in 2010 in an effort to reduce trade, investment and labour barriers. Within the last few weeks, two of the partnership provinces started giving preferential treatment to companies within the trade zone: Saskatchewan started limiting some Crown corporation contracts to businesses within the zone, and the Alberta government changed its liquor pricing so that craft beer from the partnership provinces is much less expensive than beer from elsewhere.
READ MORE: Beer companies clash with Alberta, Saskatchewan over western trade deal
“Up until this new legislation was announced, we had no intention of leaving. In fact, we had plans to widen our footprint based on the growing demand for our beers,” Muskoka Brewery president and founder Gary McMullen said in a statement. “We’re sorry to leave our friends and supporters, but with this new tax increase it’s now unsustainable to sell our beer in these provinces.”
The Canadian Taxpayers Federation’s Alberta director said her organization’s calculation suggests the new tax means an extra 24 cents per bottle for Muskoka, and called it a hit to craft brewers who want to compete in Alberta, and a hit to Alberta consumers.
“By implementing a protectionist measure of hiking taxes for out-of-western-region small brewers, you’re just making it more difficult for people to be able to come sell their product in Alberta,” Paige MacPherson said. “In Alberta, we really value our choice and selection when it comes to our alcohol—and our low prices.
“This is making it so when we want to support the little guys, who are creating interesting beers…it’s making it more difficult, and in this case, it’s making it impossible.”
Toronto’s Steam Whistle brewery and Scottish brewer Innis & Gunn have also criticized Alberta’s increased tax for craft brewers.
READ MORE: Liquor taxes go up, but Alberta ‘shifts the beer playing field’
With files from The Canadian Press
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