Further to a recent post updating matters around the Alberta government’s review of beer mark-up policy (found here), yesterday I received a press release from a new interlocutor. This increases the number of distinct positions being advocated to four, which really is something when you think about it. How any political issues have FOUR different sets of interests?
It comes from a group calling themselves the Alberta Craft Beer Alliance and includes, at least, five of the more noted beer importers in the province and one beer-oriented liquor store (at least this is who attached their name to the release, which states there are other signers on a letter to the Minister).
You can read the full release here (I pdfed it as is, except for deleting the email address lines and the contact information for the six signed names, for reasons I trust you understand). It puts out the position of craft beer importers, which I have summarized here in the past and a number of comments have articulated.
The core of the argument is straightforward. They argue increased mark-ups on beer produced out of province to the full rate will cripple the beer import business, reducing consumers’ access to a diversity of craft beer. Behind their argument is price-point: “A regular 6-pack of craft beer could cost you soon up to $2.50 more. If you think about going for an after work drink with some colleagues or friends, the price for a standard 16-oz. pint in your friendly neighbourhood pub would increase by up to $1.50 per pint.”
I fully admit that I don’t know the economic models for selling beer in Alberta. However, by my, admittedly simplistic, math, I calculate that moving imported beer from 40 cents to 98 cents per litre (as proposed) would lead to an increase of about $1.20 per six-pack and about 30 cents per pint. There may be add-on effects I am unaware of (some of which might be retailers who tend to mark-up based on percentage of cost price), but I wouldn’t mind seeing some details behind this figure.
They also take aim (gently) at Alberta’s brewers who have been advocating the change, arguing that while some reduced rate for Alberta beer is justified the proposal goes too far:
The changes have been proposed by Alberta beer producers that feel that they are at a great disadvantage on the free Alberta beer market and that they do not benefit by producing in Alberta. Certainly, everyone would agree that Alberta producers should have some kind of home advantage. But not to the disadvantage of the consumers ability to make choices and certainly not to the extent where the consumer has to pay excessively more for his choices.
They state “the great selection of hundreds of craft beer might disappear very soon” if they are subject to the full mark-up rate. They also claim the changes “would leave several thousand Albertans at a great risk of losing their jobs, from a truck driver that delivers the beer to and from the warehouse to the waitress that serves you the delicious cold pint at the pub”.
The latter claim, clearly aimed at countering the arguments of the other sides, seems somewhat dubious. Even if many dozens of beer disappeared from Alberta shelves, it is hard to see how that would lead to significant job loss. Yes, consumers might lose variety and range (and that is a real issue) but the downstream staff would deliver and sell other brands that gain from the market hole. The agents would find other product to represent, although I appreciate they would take a big hit in their income in the short term. Most of the breweries would find other markets for their beer. That said, I can see how it might be a big hit to smaller western Canadian brewers for whom Alberta is a large portion of their sales. It seems their argument is more nuanced than they put forward.
I have written enough about my take on this issue, so will refrain from repeating myself. I will just remind that I recognize how complicated this issue is. The entry of the fourth legitimate viewpoint on this issue makes it even more complicated. I will leave it to you, the reader, to consider which side makes the best case.