While there is a lot that's right in Alberta's liquor industry, there is also still room for big improvements. When I joined the Alberta Craft Distillers Association in summer, there were three big priorities on my radar: changes to markup, more member engagement, and finding resources to promote the incredible industry our members are building. I'm sorry to say that the member engagement piece has been a little underdeveloped. This is something we're changing, but we went quiet for a little while for good reason.
Over the last three months, we have been directly engaging with the government of Alberta on our proposals to change markup. You may recall, our three key asks are:
Harmonizing markup rates for refreshment beverages (ready-to-drinks like hard seltzers and canned cocktails) with the rates for beer.
Adjusting markup on spirits, ideally harmonizing the Connect markup with the farmgate markup.
Changes to the annual worldwide production framework to remove benchmarks as barriers to growth.
We're realistic. We know that engaging with any government on regulatory changes is a slow, hard process. When the changes might impact revenues, the process gets that much harder. We believe that what we're asking, long-term, will lead to more revenue - for the government and distillers - while reducing the cost of accessing distribution. What we also know, and what we've been telling Minister Dale Nally, MLAs, AGLC officials, and department staff, is that craft distillers will use the extra money in their pockets to grow their businesses, create jobs, and expand product lines.
Now, we can't say for certain what kinds of changes might be coming down the pipe. What we have heard though, is that there are changes coming. Minister Nally, who leads Service Alberta and who is now the minister responsible for AGLC, has done a lot of due diligence over the course of the summer. We give him a lot of credit for taking the time to get out into the province and meeting with stakeholders across the liquor industry. His team has been clear that they are trying to balance a number of priorities - creating revenue for the government, reducing red tape and regulatory burden on businesses, and creating a more equitable environment for Alberta-made products in Alberta.
What we are hearing - all off the record, of course - is that there are some proposals that will be coming forward that will address some of our markup issues, that will attempt to showcase Alberta products, and mitigate some of the head winds our members have been facing in recent years. It has been suggested that these changes will be announced before the end of 2023, although this is mostly speculation at this point. We are trying very hard to get a peek at what's being proposed and to get a firmer sense of timing.
Normally, I wouldn't provide comment on something like this until I knew for certain what was going to happen. I have to caution here again that while we are optimistic that we will see some of our advocacy priorities addressed, nothing is real until it's public. The reason I wanted to provide this update now is to loop our members into the process. We hear the feedback, we understand the challenges and concerns out there, and we have been working very hard to make change. Government relations is a grind. It takes sustained, consistent engagement to make even the smallest changes. But we are doing exactly that. Staying focused, regularly engaging with elected officials, department staff, the AGLC, and others to keep attention on the file.
We need to be organized, we need to invest in our collective success, and we need to have patience. As frustrating as the process can be, sticking with it is the only path to achieving our goals.
As the fall legislature session starts, we have developed a robust advocacy plan. We will be meeting with MLAs from all corners of the province, continuing to communicate with Minister Nally and his office, and cultivating champions in the government caucus for Alberta's incredible, homegrown distilling industry.
As always, if you have questions or concerns, or if you have ideas and just want to chat, please reach out to me anytime.
Dan St. Pierre
Executive Director
Alberta Craft Distillers Association