Beer Cans

Conway lawyer Ben Grant achieves success in interprovincial beer dispute

An appellate panel has affirmed a determination that Alberta has contravened its obligations under the Agreement on Internal Trade (AIT) in its treatment of craft beer produced in other provinces.

Ben Grant of Conway Litigation represented the complainant, Artisan Ales, in the initial proceeding and the appeal. Artisan Ales imports high-quality craft beer from Quebec and around the world for sale in the Alberta market.

The complaint stemmed from measures introduced by Alberta in October 2015 (see previous post). These measures imposed higher mark-ups on beer produced in some provinces than beer produced in Alberta. In some cases, Artisan Ales paid mark-ups over five times higher than those charged on equivalent Alberta products.

In August 2016, after Artisan Ales launched its complaint, Alberta began applying an equal mark-up, but also began providing an offsetting grant to Alberta brewers. The grant effectively restored the previous mark-up structure for Alberta beer.

Alberta brought this appeal after a panel constituted under the AIT found that Alberta’s program was discriminatory and constituted an impermissible obstacle to trade (see previous post).

The appellate panel dismissed the appeal, finding that Alberta’s new grant program “distorts the playing field”, resulting in less favourable treatment of beer produced in other provinces (contrary to Article 401 of the AIT). The appellate panel further found that the grant program prevented entry of beer into the Alberta market, therefore creating an obstacle to trade (contrary to Article 403 of the AIT).

As a consequence of the decision, Alberta must now modify its programs to comply with the AIT within approximately six months or face fines of up to $5 million. Further coverage of the appellate panel’s decision can be found in the Calgary Herald and the CBC.

Since the beginning of this proceeding, the AIT has been superseded by the new Canadian Free Trade Agreement, which contains similar obligations. For questions regarding the Agreement on Internal Trade, the Canadian Free Trade Agreement, or other interprovincial trade issues, please contact David Wilson or Ben Grant at Conway Litigation.

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