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Alberta's Liquor Markup Review: What It Means for the Industry

In April, the Alberta Craft Distillers Association sent a letter to the Honourable Dale Nally, Minister of Service Alberta and Red Tape Reduction, proposing a framework and timelines for a comprehensive review of Alberta’s liquor markup regime. In May, the Minister responded and indicated that such a review is being conducted and will include stakeholder engagement throughout the summer. The review, which began earlier this year, aims to address the priorities of various member organizations within the liquor industry, with a particular focus on simplifying and enhancing transparency.

Summary of Key Points:

  1. Engagement and Communication: Minister Nally acknowledged the valuable input from industry members and emphasized the importance of continued communication. This follows the productive discussions at the Alberta Craft Distillers' Reception in March 2024.

  2. Liquor Markup Review: A comprehensive review of Alberta’s liquor markup regime is underway, led by Service Alberta and Red Tape Reduction, with support from the Treasury Board and Finance, and Alberta Gaming, Liquor and Cannabis.

  3. Holistic Assessment: The review will consider all liquor product categories, production volumes, distribution, and production requirements. This includes a thorough assessment of Alberta’s craft spirits producers.

  4. Guiding Principles:

  • Simplification and transparency of the markup regime.

  • Ensuring the sector remains attractive for investment.

  • Facilitating better market access for Alberta’s producers, both domestically and internationally.

  • Maintaining current government revenue from markups.

  1. Industry Engagement: Industry stakeholders are encouraged to continue providing input to ensure a balanced and comprehensive review. Contact Joffre Hotz, Assistant Deputy Minister, for further contributions.

Implications for the Liquor Industry:

The implications of this review are significant for Alberta’s liquor industry, particularly for craft distillers:

  • Transparency and Simplification: Simplifying the liquor markup regime will likely reduce administrative burdens and make the regulatory environment more predictable. This could enhance operational efficiency and foster a more business-friendly climate.

  • Investment Attraction: By enhancing transparency and simplifying the regime, Alberta can position itself as an attractive destination for new investments in the liquor sector. This could lead to increased competition, innovation, and overall growth within the industry.

  • Market Access: Improving access to domestic and international markets is crucial for the expansion of Alberta’s craft spirits. Enhanced market opportunities can drive growth and increase the global presence of Alberta’s liquor products.

  • Revenue Implications: While aiming to support industry growth, the review also needs to ensure that current government revenues from liquor markups are sustained. Balancing these financial aspects is critical for the long-term sustainability of the sector.

  • Industry Collaboration: Ongoing engagement with industry stakeholders will ensure that diverse perspectives are considered. This collaborative approach is essential for developing a balanced and effective liquor markup regime that addresses the needs of all players in the industry.

ACDA will be active in these conversations and engagements. While we appreciate that Minister Nally and team want to maintain the revenues they generate from markup, we know many of our members are struggling to make ends meet under the current framework. We need to see movement on rates that will allow our members to access Connect logistics without forfeiting huge amounts of money due to an unreasonable differential in markup between self-distribution and Connect distribution. We welcome an opportunity to work with the government on modernizing markup.

Stay tuned for further updates on this important initiative and continue to engage with the process to ensure your voice is heard.

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