Markup on cider in Alberta is higher than for craft beer, local producers want that changed

A Calgary cider shop wants to see change in how the province's liquor regulator marks up their product, saying they want to be more in line with the markups that small craft brewers are levied in Alberta.

Dennis Scanland owns SunnyCider in northeast Calgary, and is behind a local petition to revisit markups on cider. 

In Alberta, unlike most other provinces that have a provincial liquor tax, liquor retailing is privatized, but the province's liquor regulator, Alberta Gaming Liquor and Cannabis, adds a markup to any liquor product sold in the province.

That markup price varies depending on factors like alcohol content, type of beverage and how big an operation is.

For cider, that markup ranges from $0.32 a litre to $1.81.

By comparison, small craft beer brewers in Alberta pay a markup of between $0.10 a litre to $0.80 a litre.

"When you're paying $13 a flat more as a liquor store or something like that, nobody looks at the product. They're like this is too expensive, I can't move this product in my liquor store or restaurant," said Scandland.

Stunting growth of industry, say cider producers

Scanland says beer and cider both have similar alcohol content but consumers must pay significantly more for cider than for beer.

He thinks these higher markups deter growth in the local cider industry, and lead to less ciders on the shelf at Alberta liquor stores.

"That's why I want it to change, I think it would would increase the amount of ciders on the market and it would also help establish a little bit more growth in Alberta."

In a statement, Alberta Gaming, Liquor and Cannabis (AGLC)  said under Canadian Food and Drug Regulations "cider is considered a different product than beer ... and therefore is categorized differently."

The AGLC went on to state that "markup rates have traditionally been set by category," but that the AGLC regularly reviews markup rates.

They also noted that small brewers are eligible to receive a reduced markup rate (the standard rate is $1.25 per litre) but that other small refreshment manufacturers, including cider, only have a reduced markup for product they self-distribute.

Scanland says he is not always able to self-distribute his product and that leads to higher markups. 

Adrian Di Marino would also like to see the markup on cider equivalent to beer.

He serves beer and cider out of his taproom at Elite Brewing and Cidery on Edmonton Trail in Calgary.

Di Marino keeps prices on both products the same so that customers don't discriminate, but says the margins for the product are distinctly different.

"Out of everything that we produce, cider is the most expensive," he said. 

Di Marino says cider is significantly more expensive to produce than beer, and part of that is because of the cost of its base ingredients. 

Elite normally sources its apples from B.C. but last year's dry conditions impacted the harvest and they've had to shift to importing apples from Washington, which has led to additional transportation costs and cross-border taxes.

"The cider business in Alberta isn't where it should be and I think it's because the margins aren't there."

Di Marino would like to see a grant program developed in Alberta to help expand the handful of cider producers that do operate in the province.