Over the past few days (here and here), I have made all of you put up with long, policy-wonkish posts examining the state of Alberta’s unique beer system. It has ended up being a much larger project than I ever anticipated. And now I reach the post I dread the most – where I must stop carping and put my keyboard where my mouth is. What do I think we should do differently?

Let me start by saying that I do not see this as a comprehensive package of suggestions. It is just some snippets flowing out of my thinking on this issue. I reserve the right to change my mind in the future, to admit I was out to lunch on something. But I also reserve the right to stand by views that others in the industry may disagree with – such is the advantage of not having my mortgage depend on how much beer I sell.

So, where do we start?

Privatization, of course. Almost 20 years later, I am more convinced than ever that privatizing liquor retail in the province was a huge mistake (and creating a private distribution monopoly even WORSE). Mostly because it took away from government the most effective tools it has to promote and encourage local craft beer production. And it degraded thousands of jobs into the kind most people don’t want.

However, that horse has not only left the barn, the rider burned the barn down after leaving. There is no practical way to go backwards on this issue. The problem for me is that many of my thoughts about solutions can only be applied in a government-retail environment. Suggestions like creating boutique craft beer stores, guaranteed distribution and shelf space for local brewers, and education for store staff are irrelevant in Alberta.

So what can we do? Here is a partial list:

  1. Start enforcing anti-inducement regulations. Really, what is stopping the AGLC on this? Offering inducements is illegal. Start penalizing breweries and pub/liquor store owners who engage in it and you will see the level of this chicanery go down. I know this is really about economic power, but if we can sue Big Tobacco, I am sure we can successfully target inducements.
  2. Lower barriers to new start-up breweries. This may be one of our biggest problems. It is far too difficult to start a new brewery in this province. Lower the minimums, create a new category for “nano-breweries”, and offer incentives (in whatever form that may be) for new start-ups.
  3. Graduate the tax rate. Small brewers shouldn’t be punished for success. Apply higher rates only to production that exceeds the step-up level. This might encourage our more established craft brewers to take the next step. And increase the step-up levels. 40,000 HL is not very big. Other provinces don’t move a brewery out of the “small” category until 100,000 hectolitres or more.
  4. Create separate tax streams for in-province and out-of-province brewers. I am not saying eliminate the transitional rate for non-Alberta breweries. I am saying the current policy is incoherent. Create two tax structures. One for imported beer – which can still offer a lower rate for small brewers – and a separate (and I argue lower) rate for beer produced in Alberta. We need to privilege locally brewed beer over import if we want to build a world-class beer culture. That said, I don’t want to harm the great Canadian craft brewers who have entered Alberta’s market. I am hoping this compromise could work for both parties.
  5. In general, we need someone in the AGLC to be a craft beer champion – whose job it is to promote Alberta-produced and other craft beer. They can promote education sessions for liquor store  and bar owners, work with local producers on marketing campaigns, etc., and act as a conduit into the complex world of government regulations. I know this is a million miles from where the AGLC is now, but there absolutely nothing – other than political stubbornness – preventing them from taking on this role.
  6. Reform Connect Logistics. I am not exactly sure what can be done here, short of returning distribution to government hands, but there has got to be a way to force Connect to lower its prices and take beer more seriously. A cooled section of the warehouse would be a nice start. Governments, wary of the power of private monopolies, often more stringently regulate industries where monopolies appear (utilities, air transportation, telephone). We have created a private monopoly – which means taking extra steps to curtail and control its behaviour. Which means more regulation and enforcement.

I will stop there for now, although I could probably come up with more if I took more time. I also think other players in the beer industry could do more as well – there is plenty of room for everybody to up their game. Why don’t we have an Alberta Craft Brewers association? Where are the hearty entrepreneurs who want to invest in a new brewpub or small brewery? Why aren’t consumers demanding more from their pubs and stores? There is a lot of  work to be done to create a true craft beer culture in Alberta – we all can play a part. This series was intended to look only at the government-end of things.

I imagine my suggestions will spawn a wide diversity of responses. That is good. Discussion is good. Just remember, kids, keep it friendly, respectful and clean. We all still need to be able to drink beer together afterwards.