Beer War: Sask. slashes markups for small breweries in battle with Alberta
The Saskatchewan government is drastically cutting the markup it charges smaller breweries.
Jeremy Harrison, minister responsible for the Saskatchewan Liquor and Gaming Authority, said the move is a shot back at the Alberta government’s decision to raise markups on Saskatchewan beer sold in that province, a move the Wall government has called protectionist.
“Our response, as opposed to massively increasing taxes and imposing new regulations, was to significantly reduce taxes and to cut regulation so that our producers could compete in a free-market environment,” Harrison said during an announcement at the 9 Mile Legacy brewery in Saskatoon.
Under the old markup structure, brewers were charged $0.74 per litre on beer sold through the SLGA’s distribution centre if they produced under 5,000 hectolitres a year, equivalent to about 10,000 50-litre kegs.
Once a brewer hit that threshold, the markup nearly doubled to $1.415 per litre. Harrison said this amounted to punishing successful brewers who wanted to expand.
Effective Nov. 1, the old two-stage markup structure will be replaced with a seven-stage scale of increases.
At the lowest end, producers brewing less than 2,500 HL per year will pay $0.40 per litre.
The scale slides up to $0.75 per litre for producers brewing between 20,001 and 200,000 HL per year.