An interesting post today by Jordan about the best part of a week spent exploring good beer in the western Canadian province of Alberta. I was particularly interested in his description of the minimum requirements set out in law by the government which I am going to repeat here in a bit more length than usual:
...the barrier to entry is simply too high for there to be a rush to very small micro breweries or nano breweries. The way that licensing works in Alberta is that a Class E license (the one that lets you make beer) has a certain number of requirements, which I’ll quote here from the Licensee Handbook:
A Class E licence may be issued to a qualified applicant to manufacturer liquor in Alberta. The manufacturer must meet the following production requirements, with production capacity minimums met within 18 months of start-up:
i) 5,000 hectolitres (1 hectolitre = 100 litres) minimum annual production capacity;
ii) all beer manufactured on site;
iii) fermentation, maturation and storage tanks with a minimum capacity of 10 hectolitres each; and
iv) 50 hectolitres minimum weekly capacity for fermentation, maturation and storage, with space available for additional tanks to achieve minimum annual production capacity
Now, this is truly interesting and goes a long way to explaining why you only have eleven breweries. 5,000 hl of beer doesn’t seem like a huge amount of beer, until you realize that it’s 500,000 litres. That is to say that you have to be able to make a million pints of beer a year within 18 months of starting up. Additionally, all of your fermenters have to contain at least a thousand litres and you need at least enough of them to make five thousand litres a week. Even given those conditions, five thousand litres a week puts you at about half of your minimum annual production capacity, so you’re really talking about much larger scale equipment.
That is an one onerous commitment and one that essentially, as Jordan explains, means you have to have a sugar daddy with deep pockets on the team from the get go or you are planning to leave that province to start your start up if you are a young brewer with more dreams than cash. There may be reasons to regulate the industry in this manner. The swift expansion of new breweries in Ontario, for example, may well be a precursor to as rapid a retraction when customers move on for one reason or another - if each new brewery actual ever earns the customers in the first place. Ontario's application for new manufacturers of beer seems more focused on business plans and financial responsibility.
But is that really the process? One of the handy things about the English tradition of parliamentary democracy is that one little word - Hansard. The official record of the dealing of the legislature is there in public to be searched and studied. When we look see we find the following:
⇒ In 2012, the Newfoundland and Labrador government discussed the implementation of a class of craft brewery that produces " less than 5,000 hectolitres or approximately 120,000 dozen bottles of beer per year";
⇒ In Canada's largest province of Ontario in 2009, the legislature heard of the then 40 breweries in the province which contribute between 15% and 20% of the jobs of the Ontario brewing industry and produce about 300,000 hectolitres of beer annually" or 7,500 hectolitres each on average; and
⇒ In the late 90s, there was a special category over in the Province of British Columbia by Canada's Pacific coast for breweries under 75,000 hectolitres. In 2012, B.C. had a category of taxation upon brewing for operations under 15,000 hectolitres.
So if all these provinces are trying to find ways to particularly assist the smallest of breweries, why does Alberta bar them? Little PEI out by the Atlantic provides for a category of brewery producing under 2,000 hectolitres as does our national system of Federal excise tax on small brewers. And look, in 2007, one of Ontario's cornerstone craft brewers, Beaus', was only forecasting sales of just 1,000 hectolitres (100,000 litres) in their first year of operations. Even with their family's prior manufacturing experience, it is unclear to me that they might have taken the chance to jump over an initial minimum scale of production of multiple times that scale.
So what is it about Alberta that the threshold for small scale brewing is rather big compared to most every other part of Canada? One of the sayings that gets kicked about the law is the one about "no mischief, no law." What is the error in the community that needs addressing though raising the bar to entering the craft brewing industry so high that only those with large investments need apply? One reason might be the development of what is described as mid-sized brewers. This creates tensions with both the brewers who are both larger and smaller. Well established mid-range brewer Big Rock 220,973 hectolitres in 2011. The Hansard for Alberta shows questions related to tax and brewing capacity has been raised in the legislature back in 2002. But that does not explain the mischief. Is it cultural or in the trade? Or just habit. More research may well be in order.