An article published on the 17th of November 2015 informs us that Alberta has increased taxes on the production of beer from 0.2$ to 1.25$ per litre. Alberta’s finance minister, Joe Ceci says “The new beer mark-up will assist the 18 Alberta Small Brewers Association members, but unfortunately it will impact our agencies negatively, and the majority of these small businesses will not be able to survive”
Canada is known for it’s local breweries and wineries. It has one of the worlds best beers, but increasing on taxes beer will discourage local production. A hike in taxes will act as a barrier to entry for the sunrise industries in Alberta. This increase in tax will not only discourage local production but also increase import of beer as consumers will now want cheaper substitutes.
The article also mentions that:-
“By eliminating the transition level of the beer mark-up, the imported beer from small breweries across the world will be taxed at the same level of multinational companies that brew hundreds of thousands of hectoliters and own over 95 per cent of the Canadian market.”
I feel that the MNC’s might survive the tax hike as they produce on a large scale and have economies of scale to reduce their costs but small breweries will not be able to survive the same tax hike. This would definitely reduce local production of beer in Alberta.
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