In a news release today (which you can read here) the Alberta Gaming and Liquor Commission (AGLC) announced it is lifting the ban on beer higher than 11.9% alcohol, which was imposed just 20 days ago. Once again beer of any alcohol content can be sold in Alberta liquor stores.

Instead, the AGLC will tax high alcohol beer at the same level they tax spirits. Beer between 12 and 16 will be taxed at $4.05 per litre, while 16-22 percent beer will be at $9.90. Over 22 percent will be taxed at $13.30. There is no change to the tax structure for beer under 12%, which is between $.20 and $.98 per litre, depending on the brewery’s production level (Alberta-based small brewers receive a preferential tax rate). Most beer in Alberta is taxed at the $.98 level.

Without question these are big jumps. Taxes on the next batch of Glenn Sherbrooke, just to take one example, would be 4 times higher, likely almost doubling the cost per bottle. The price impact on high end imports is harder to calculate, given the variable of transport costs and import fees, but I can imagine they will be noteably higher.

Still Legal - Just More Expensive

The speed of the turnabout suggests the AGLC felt a lot of heat over this decision. The mixture of recurrent media coverage, lobbying from liquor agents, breweries and liquor stores and angry emails from consumers. To get out from under the deluge, they flip-flopped, hopefully recognizing that the original policy was poorly thought out. The new policy is far from perfect, but does seem to more appropriately get to the legitimate problem of the alcoholic energy drinks in the States – adding $10 per litre to those low-priced products might kill the buzz pretty quickly – without preventing beer lovers from sampling a bottle of Sam Adam’s Utopia or BrewDog’s latest squirrel beer (see here if you miss that reference).

In a way the policy has a logic to it. The new tax rate looks at alcohol content rather than ingredients list, meaning tequila, rye, flavoured vodka, etc. all sit on a level playing field with big beer. Ultimately government liquor policy can’t prevent unhealthy alcohol consumption. That is a broader societal issue. All the AGLC can do is make sure its policies don’t unfairly target one particular group. On that level, the new policy may succeed.

What will the new policy achieve? Well, a couple of things. First, I think it will delay the introduction of the dastardly beer-based energy drinks, although I imagine someone, someday will figure out a loophole. Second, the price of boutique beer will go up, potentially a lot, further entrenching Alberta’s reputation as the most expense province to buy beer (read here for more on that).There may be a small dampening of demand for high alcohol beer, but it won’t be huge as most high end beer drinkers have sufficient disposable cash to weather an extra $5-$10 on a bottle of something rare and special. Theoretically it might reduce the availability of these kind of beer, as agents might be nervous about the higher price point, but I think that will wear off quickly and things will return to normal.

Some folks will be angry at the extra taxes and the price hike that ensues, arguing government should get out of the business altogether. They have a right to feel that way, but I don’t share that particular opinion. Taxes are necessary and, most of the time, deliver important things to our society. We all want taxes to be lower on things we like and higher on things we don’t like. I like beer. Of course I would like to save a few bucks through lower taxes. But at what expense? I don’t want health care or education funding cut, and some of the things I want to see taxed more – cigarettes for example – affect other people in our society.

But enough politics. I think it is a time for each of us to pull out a bottle of our favourite 12%+ beer and (responsibly) celebrate this reversal. This is a nice, albeit small, example of how public mobilization can work. We should remember that the next time the government tries to privatize Medicare (Oops. Snuck some politics back in there, naughty me.)