Province reduces tax on spirit, wine producers
Province: Mark-up rate dropped for sales at markets, manufacturing facilities
Wednesday, Dec 13, 2017 10:28 am
Alberta liquor producers got a big boost from the provincial government last week.
The Province reduced the mark-up rate paid by small producers of spirits, ciders, meads and cottage wines when selling their products either at their manufacturing facility or at farmer’s or artisan markets.
“This will allow liquor producers to invest in staff, expand production and reinvest in their businesses – things they want to do,” said Alberta Finance Minister Joe Ceci in Turner Valley on Dec. 8. “This program is an incredibly valuable step to ensure this industry not only continues to grow, but thrives for many, many years in the future.”
The mark-up rate, a tax paid by alcohol producers on the amount of product they create, will drop from $13.67 per litre to $2.46 per litre for spirits and from $1.49 per litre to 32 cents per litre for refreshment beverages such as ciders or coolers. The new rate will apply to sales of all products by small producers that produce up to 1,500 hectolitres of spirits.
The reduced mark-up is expected to return approximately $1.4 million to manufacturers next year.
Alberta’s small liquor manufacturing sector is growing, with 21 spirits manufacturers in 19 communities.
He said Alberta is well positioned to be a leader in the field of spirits and beer making and eliminating “prohibition era” regulations will create an environment for the industry to grow.
Eau Claire Distillery owner David Farran said the change is important for the industry and puts Alberta producers on a level playing field with their counterparts in other provinces.
“The industry was held back for many years because we weren’t allowed to produce less than a very high threshold of production,” he said. “It created a climate where only the international, mega distilleries were able to operate in Alberta.”
Farran said it likely won’t translate into lower prices at the Turner Valley distillery. Instead, he said the move will allow him to invest back into the business, hire employees and grow. He said there could also be spin off benefits.
“This is not just an investment in distilling, it’s an investment in agriculture, it’s an investment in tourism, it’s an investment in all those related industries that come with the distillery,” said Farran.