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Court Grants Injunctions in Mark-Up Cases

scalesofjusticeEarlier today (Nov 10) a Calgary judge granted injunctions to Great Western Brewing and Steam Whistle as part of their ongoing legal challenges to the Alberta government’s  beer mark-up policy (read the CBC story here). For background on the issue read my previous posts here and here.

Officially, Steam Whistle’s injunction is an extension on their previously granted injunction at the time of the first policy change. The Great Western injunction is new. In both suits, the breweries are alleging the mark-up policy combined with a grant to Alberta breweries is unconstitutional because it is a trade barrier.

The narrow upshot of this is both breweries will, for now, apply their previous mark-up rates. For example Great Western’s previous rate was 48 cents a litre. Actually, it is a bit more complicated than that as the breweries would be obligated to repay the government for the difference if they lose their lawsuit, so the breweries will need to make a decision about how much to hedge on the case. My guess is Great Western will try to lower its prices as much as it can to regain a competitive price point.

As for the broader issue, today’s decision doesn’t really change anything. The injunction was expected (given the previous Steam Whistle decision). Temporary injunctions are not indicators of the relative strength or weakness of the parties’ cases.

It sounds like the actual hearings in the cases will be heard in May. So, kids, we’ve got a long way to go before this one is over. I will do my best to keep you posted.

 

 

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