Two beer-makers looking to build their craft in the Foothills say a new provincial grant will help small Alberta breweries grow.
Brewers who produce less than 300,000 hectolitres of beer each year will receive grants from the new Alberta Small Brewers Development Program unveiled last week.
Luke Wooldridge, owner of Six Corners Brew Works, said it will help small brewers get off the ground.
“They’re basically acknowledging that the smaller breweries need some support relative to the bigger guys,” he said.
Wooldridge is planning to build a brewery in the Southbank Business Park.
He said he needs to work out what the new grant will mean for his business. He currently brews less than 10,000 hectolitres, which is currently contracted to a brewery in Saskatchewan.
Alberta has 40 small brewers making more than 250,000 hectolitres of beer each year. More than 16 new breweries have been licensed to operate in the province since May 2015.
Leah Holoiday, spokesperson for Alberta’s Finance Minister Joe Ceci, said Alberta is ideally suited for craft breweries.
“Small breweries in the province are seen to have amazing growth potential by the government,” said Holoiday.
Starting Aug. 5, the grants will be provided to small brewers based on sales volume of Alberta-made beer.
“It’s a bit of a sliding scale, it starts at zero and then the dollar value varies going up to 150,000 hectolitres,” said Holoiday. “Once you hit that, then you start sliding down the other side to 300,000.”
The Province expects to hand out $12 million this year with the August start to the program, and $20 million next year.
Jochen Fahr, founder of Brauerei Fahr, said the grant will help small Alberta producers compete.
“Now we have a local price advantage over importers from other provinces,” said Fahr.
He said plans to build the brewery in Turner Valley are moving forward, albeit slowly. Fahr is looking for investors to support the project and hopes to begin work sometime next year.
He said the grant accomplishes what the provincial government was trying to do last year when it brought in new mark-up rates paid by producers outside Alberta, B.C. and Saskatchewan to encourage the growth of craft brewers.
In October 2015, the Province dropped the mark-up rate paid by small brewers in the three provinces to 10 cents per litre for those making less than 10,000 hectolitres. The rate rose depending on production levels, reaching $1.25 for brewers making more than 200,000 hectolitres. Brewers outside of the three Western provinces were to be charged a $1.25 mark-up. The Province backed away from the plan after challenges from out-of-province brewers, including Ontario’s Steam Whistle which won a court injunction against the change. As of Aug. 5, all beer producers will pay $1.25 per litre for all beer sold in the province.
Fahr said the new grant will mean he’ll end up paying 10 cents per litre.
He currently brews less than 10,000 hectolitres per year and he pays $1.25 per litre up front in mark up for every keg he produces, which works out to $62.5 per keg. Fahr will receive $1.15 per litre back for each keg sold.
Alberta Agriculture Minister Oneil Carlier said the province’s growing craft brewery sector could benefit farmers and barley producers, and open the door to grow new products such as hops.
“It’s a real opportunity for producers in the province to highlight the products they have,” said Carlier.
The new grant is not getting support from the Wildrose Party, which argues the Province is picking winners and losers among Alberta brewers.
“It’s interesting they would start taxing local breweries, all breweries for one thing, and then say they were going to give grants back or pick certain breweries they were going to give money back to,” said Highwood MLA Wayne Anderson.
