Manitoba breweries are weighing in on Ottawa’s decision to scrap a planned beer tax increase.
Over the weekend, the federal government announced a 4.7 per cent alcohol excise tax increase, originally scheduled for April 1, won’t be moving ahead.
Instead, a two per cent cap, already in place for a year, will be extended for two more years, and Canadian breweries will see a 50 per cent excise duty rate cut on their first 15,000 hectolitres of production.
Matthew Sabourin, president of Nonsuch Brewing Co., said this this half-off discount will be big for Manitoban brewers, as there aren’t many that produce more than 15,000 hectolitres. ‘I would be surprised if anyone in this province is producing more than 15,000,” he said.
While it’s all welcomed relief, he said the measures won’t counter other financial challenges like rising import material costs and inflation.
“Price increases have come in a big way. But again, every penny counts, right? We’re all just trying to get through, and we’re trying to do what’s right. This will help us inch towards that, but it is not the solution,” he said.
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Sabourin said heavy regulations also have a piece to play, though he understands why they’re in place. “No matter what, we have to sell through certain channels and we have to give certain taxes that folks that are (not as) regulated don’t have to deal with,” he said.
Sabourin also said the pandemic left its mark on the industry. “What used to be norms are no longer the norm,” he said, adding brewers are “all scratching our heads. We’re wondering what the heck is happening.”
Taras Manzie, CEO of Lake of the Woods Brewing Co., said even with the decreases and caps, “unfortunately, there is an automatic escalation tax that’s just applied every year to the cost of beer.”
He said 45 per cent to 50 per cent of the cost of beer comes from federal and provincial taxes.
“(I’m) happy it’s being limited, although we’d all, I think, like to see lower prices in beer and less tax,” Manzie said.
Both Manzie and Sabourin said to help keep costs reasonable, it’s important customers shop locally for craft brew.
“Behind (higher costs) is greater quality, greater freshness, and people,” Sabourin said.
“When you come to our brewery, you can see the people that are working. You can see the people that put, pride into their work. I’m a firm believer that you honestly taste it as well. When that love is put into the product, you taste it.”
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