Rebel News Podcast - Artisan Ales’ bitter-sweet victory against Notley NDP is a win for Alberta (Guest： Bo Vitanov)

00:00:00.000 Craft Beer in Alberta is about to get a whole lot cheaper and tonight I'm joined by the woman 1.00

00:00:05.580 who fought the Alberta government and won and she's saving you a bunch of money.

00:00:11.840 I'm Sheila Gunn-Reed and you're watching The Gunn Show.

00:00:30.000 We've been covering the story of how the NDP started tinkering with the liquor prices in Alberta from the very beginning.

00:00:39.760 Right after they got elected, they started enacting protectionist policies against beer imports

00:00:45.700 and then they started subsidizing Alberta microbrewers every single month with Alberta tax dollars.

00:00:52.900 It was a poorly thought out plan to bolster Alberta's brewers

00:00:56.560 that had the unintended consequences of harming Alberta beer importers.

00:01:01.620 The protectionist policies and tax hikes spawned trade disputes between provinces

00:01:07.340 and legal challenges from Alberta small businesses against the government.

00:01:14.380 And instead of backing off and admitting that they were wrong and that they made a mistake,

00:01:19.320 the NDP government persisted, even trying to punish those Alberta small businesses

00:01:24.100 who dared challenge their bad policies with frivolous appeals after trade tribunal

00:01:30.160 and trade tribunal ruled against the NDP's policies.

00:01:34.420 But now those small businesses have utterly defeated the NDP government,

00:01:40.160 forcing the government to go back to how things were in the beginning, before the NDP.

00:01:46.380 And a six-pack of beer is about to get a whole lot cheaper in Alberta in 2019.

00:01:51.260 Joining me tonight to tell her side of the story about how she fought the behemoth of government

00:01:58.000 and one is Beau Vittinoff from Artisan Ales.

00:02:18.440 So joining me now from Calgary via Skype is Beau Vittinoff from Artisan Ales.

00:02:24.040 Beau, I wanted to have you on at the end of the year because you've been engaged

00:02:28.700 in this ongoing David and Goliath battle with the Alberta government

00:02:32.620 and you just scored yet another major victory.

00:02:36.340 Why don't you give us a Coles Notes version of your battle

00:02:40.260 and then we'll talk a little bit about your victory.

00:02:43.880 Be happy to.

00:02:45.960 Hi, Sheila.

00:02:47.280 Merry Christmas.

00:02:48.660 You too.

00:02:48.980 So, three years ago, almost three years ago exactly,

00:02:55.500 the NDP government changed the way the beer tax or the beer markup worked.

00:03:03.720 Before that, just like pretty much every other jurisdiction in Canada,

00:03:09.260 Alberta had a graduated beer tax.

00:03:11.600 So, the tax that was charged on beer from really small microbreweries

00:03:17.740 was substantially lower than the markup that was charged on the beer from the big guys.

00:03:25.300 And what the Alberta government did was they completely upended this.

00:03:31.080 They left a graduated beer markup for beer from Alberta, Saskatchewan, and BC

00:03:38.400 because they said they were honouring the New West Partnership trade agreement.

00:03:44.240 But, of course, that meant they weren't honouring any other trade agreement.

00:03:49.260 We bring beer in from Belgium and Quebec.

00:03:52.920 So, the markup on our beers went up 525% overnight, from 20 cents a litre to $1.25.

00:04:04.440 So, our products became really expensive and uncompetitive in the market.

00:04:10.940 We, along with some other agencies and breweries, contacted the government,

00:04:18.220 explained how this was impacting us,

00:04:21.800 and basically they didn't care.

00:04:24.840 So, we knew that we couldn't afford to take them to court.

00:04:30.500 So, we took a different route.

00:04:32.540 We fought them through a tribunal system that's attached to the AIT,

00:04:41.400 which is the Agreement on Internal Trade,

00:04:43.800 which is a free trade agreement that all the provinces

00:04:46.800 and the federal government of Canada signed in the mid-90s.

00:04:52.720 And so, we took them to a tribunal.

00:04:56.400 They lost to us over a year ago.

00:04:59.840 They being the way they are.

00:05:02.640 In the meantime, they were also sued by Steam Whistle,

00:05:06.600 who were also successful against them.

00:05:09.520 In both cases, they appealed.

00:05:12.400 So, we went to appeal very early this year.

00:05:17.120 They lost to us again.

00:05:19.020 That ruling came out in May.

00:05:23.000 So, the way that it works with the AIT is,

00:05:30.600 once they lost that, they were done.

00:05:33.500 They had no more recourse.

00:05:35.640 And they were given six months to become compliant with the trade agreement.

00:05:41.200 And so, that compliance date was November 29th.

00:05:47.920 They actually were not compliant on November 29th.

00:05:53.500 But three days prior to that,

00:05:56.440 they announced that they were changing the policy.

00:06:00.100 And they became compliant a couple of days back,

00:06:07.540 basically on December 18th.

00:06:10.200 The system went back pretty much to where it was three years ago.

00:06:18.000 In fact, we, being Mike and I, the owners of Artisan Ales,

00:06:22.800 while we've been fighting this,

00:06:24.420 have said several times in the media,

00:06:27.300 when we were asked what we wanted from the government,

00:06:31.280 we wanted them to go back to a graduated system,

00:06:36.360 which they've done.

00:06:37.400 And we also said that because their reasoning for what they had done in the past

00:06:46.480 was that Alberta beer was being treated unfairly in other jurisdictions,

00:06:51.260 we had said at the time that they should spend their time fighting what they thought was wrong

00:06:58.460 in other provinces through the AIT because it's really set up more for government-to-government.

00:07:04.500 And that's, in fact, what they are now going to do.

00:07:09.220 They are launching a complaint against Ontario.

00:07:13.640 So, we feel fully vindicated.

00:07:16.840 It's kind of bittersweet because our business has been devastated in the meantime. 0.99

00:07:22.360 But, yeah, we kicked their butts. 0.95

00:07:26.640 You know, it really was a David and Goliath story 0.97

00:07:29.940 because you're just this little beer importer in Calgary

00:07:34.340 and you found yourself taking on the whole of the Alberta government

00:07:37.800 just for free trade, something that the provinces are supposed to do.

00:07:42.860 That's why we exist as a confederation.

00:07:45.300 Now, something else was happening in the middle of all of this.

00:07:48.340 While they were forcing a markup on imported beers,

00:07:53.220 they were also cycling that money back to Alberta microbrewers

00:07:57.940 and giving them a grant every single month to produce beer in Alberta,

00:08:03.960 which, again, put you at an even greater disadvantage.

00:08:08.300 Yeah, so what happened was, and I kind of failed to mention it before,

00:08:14.260 so they realized after we filed our complaint

00:08:18.200 and after Steam Whistle filed for the injunction in court

00:08:23.480 that they really were offside by giving, you know,

00:08:29.940 special treatment to Alberta, B.C. and Saskatchewan breweries.

00:08:33.500 So what they did about a year, actually less than a year

00:08:38.140 after they instituted that, you know, the change that I talked about,

00:08:45.120 they made a second change and they jacked up the markup of all beer

00:08:52.220 to $1.25 a litre, so where the big guys were

00:08:56.300 and where everybody from outside of the New West Partnership was.

00:08:59.980 But as you mentioned, they basically set up a grant program

00:09:06.240 through the Ministry of Agriculture where they were in effect

00:09:10.340 getting the Alberta breweries back to the $0.10 a litre

00:09:15.640 or, you know, the $0.15 a litre, wherever they were.

00:09:19.240 So we were successful in our complaint in basically saying

00:09:29.580 that what you can't do directly, you also can't do indirectly.

00:09:34.140 So just because you've made it a two-step process

00:09:36.840 instead of a one-step process, it really amounts to the same thing.

00:09:41.800 And obviously the tribunal agreed with us

00:09:46.100 because they ruled in our favour twice.

00:09:49.400 And then subsequently that was reinforced in court

00:09:53.020 through the steam whistle decision.

00:09:55.700 Yeah, they just ended that program.

00:09:58.920 I believe it was the Small Brewers Development Program,

00:10:02.500 which was basically a monthly welfare check

00:10:05.100 to micro-brewers in Alberta with money taken from everybody else.

00:10:09.420 I mean, it's just unreal.

00:10:10.420 Now, the Alberta government tried to do something else to you.

00:10:16.580 They instituted an unconstitutional beer markup.

00:10:21.740 You appealed it and won.

00:10:23.000 Then you appealed it or then they appealed it and you won again.

00:10:27.440 But in the meantime, the Alberta government tried to put you on the hook

00:10:31.480 for their legal fees, even though their law was unconstitutional.

00:10:34.480 Yeah, I mean, throughout this process,

00:10:39.640 because this isn't court, when you go through the AIT,

00:10:45.340 it works slightly differently.

00:10:47.460 Like, you know, in court, if you win,

00:10:49.500 then I think you can basically have the opposite side

00:10:54.580 have to repay your legal fees.

00:10:57.040 So it doesn't work quite that way through the AIT.

00:10:59.660 The lawyers for both sides basically submit their perspective

00:11:09.260 on how the fees should be allocated.

00:11:12.420 And, yeah, they tried to pretty much stick us with most of the fees

00:11:16.420 in the original tribunal,

00:11:18.140 but the one that was particularly ridiculous

00:11:21.660 was after they lost the original complaint

00:11:25.800 and filed the appeal,

00:11:28.480 they basically said,

00:11:32.160 even if we lose this appeal,

00:11:34.160 you should, you know,

00:11:35.560 stick artisan ales with costs from this tribunal.

00:11:41.880 Because we're, you know,

00:11:43.780 we're not just filing a frivolous appeal,

00:11:47.680 which they actually were,

00:11:48.840 because they had no new evidence or arguments to make.

00:11:53.840 So, yeah, it was pretty frustrating, irritating.

00:12:01.320 I could go on.

00:12:03.720 I'd call it sleazy,

00:12:05.260 because it sounds like the government was hoping

00:12:07.240 that you would run out of money and help.

00:12:10.340 And they obviously have the deep pockets

00:12:12.840 of the Alberta taxpayer to help them.

00:12:15.420 Absolutely.

00:12:16.540 I don't doubt for a moment

00:12:19.280 that that was part of the approach.

00:12:21.660 Um, and, you know,

00:12:24.180 they, just the fact that they've still appealed

00:12:29.400 the decision with respect to steam whistles.

00:12:32.220 So, they, yeah, they're, you know,

00:12:35.020 they're using taxpayer money.

00:12:36.660 They don't care.

00:12:37.520 They're using when they,

00:12:39.720 their representatives at the AIT

00:12:42.080 are from basically an internationally known law firm.

00:12:46.540 So, they're top-end, very expensive lawyers.

00:12:50.900 So, yeah, no expenses spared to keep fighting

00:12:55.960 and, you know, try and basically just run out the clock

00:13:01.720 and, and stomp us into the dirt. 0.93

00:13:05.940 It's true.

00:13:06.500 I think they were trying to ruin you.

00:13:08.480 Now, all this beer markup business

00:13:11.840 and these tinkering with Alberta liquor laws,

00:13:14.700 it's had some real consequences,

00:13:16.680 unintended ones maybe,

00:13:18.560 um, for government revenues from the AGLC,

00:13:22.220 the Alberta Gaming and Liquor Commission.

00:13:24.600 That's right.

00:13:25.500 Um, I've actually done a fairly extensive,

00:13:29.480 um, because this is my background.

00:13:32.760 I'm an accountant.

00:13:34.060 I used to kind of run financial analysis

00:13:38.480 in the oil and gas industry.

00:13:41.040 So, the geek in me, uh, went through,

00:13:44.140 uh, the last six years' worth of financial statements

00:13:49.160 from the AGLC.

00:13:50.820 And, basically, um, the AGLC year-end is March 31st.

00:13:58.840 So, it's really interesting.

00:14:00.860 If you look at what's happened since March 31st, 2015,

00:14:07.960 because that's kind of the, you know,

00:14:10.300 two months later, uh, the NDP took over government.

00:14:14.640 So, since that time, beer volumes are down almost 10%.

00:14:20.400 Beer volumes are less than 91% of where they were on.

00:14:27.700 On, so, on March 31st, 2018,

00:14:31.200 the volumes were down to 90.9%

00:14:35.400 of where they were on March 31st, 2015.

00:14:39.860 So, all of this jimmying

00:14:43.360 and all the money that they've spent on the grants,

00:14:48.900 on lawyers, on bureaucrats,

00:14:51.580 and they're actually further behind than when they started.

00:14:58.320 They, um, I did a calculation,

00:15:01.900 and, basically, if the volumes were where they were in 2015,

00:15:07.940 and the markups were distributed the same way

00:15:13.480 as they were in 2015,

00:15:16.120 they'd be making 10 to 20 million dollars more

00:15:20.780 in beer markup than they made this last year.

00:15:26.600 Unbelievable.

00:15:27.920 You know, from a consumer standpoint,

00:15:30.520 if you make something more expensive,

00:15:32.080 we'll naturally buy less of it.

00:15:33.860 Um, but, I think people need to realize

00:15:37.780 that the Alberta Gaming and Liquor Commission,

00:15:41.980 they control the beer and booze sales in the province,

00:15:45.300 and, you know, those are government revenues

00:15:48.240 at the end of the day.

00:15:49.660 So, not only have they spent, likely,

00:15:52.240 millions of dollars

00:15:53.420 fighting Alberta small businesses in court,

00:15:56.360 but they've also managed to cost the government

00:15:58.640 anywhere from 10 to 20 million dollars

00:16:00.780 in their own revenue from liquor sales.

00:16:03.400 It is absolutely unbelievable.

00:16:06.420 Yeah, I don't, um, actually think

00:16:08.860 that anybody's kind, or, I don't know,

00:16:11.940 maybe they've looked at it, um,

00:16:14.600 but it's, it's, it's a little difficult

00:16:18.140 to figure this stuff out

00:16:19.580 because of the way that the numbers are presented,

00:16:21.820 but it's, the, the volume issue

00:16:26.860 is completely obvious.

00:16:29.140 And, I actually think that

00:16:32.280 maybe they have realized it,

00:16:34.940 and that's why they're,

00:16:36.300 they've gone back to the graduated system.

00:16:39.800 And, if I could,

00:16:41.560 one of the things that I want to point out

00:16:43.480 that I think is kind of disappointing

00:16:46.640 is this win that we've had

00:16:52.640 and the changes that they've made

00:16:54.580 are going to make a significant difference

00:16:57.500 in the price of craft beer products.

00:17:00.580 Basically, craft,

00:17:03.380 a craft beer six pack

00:17:05.020 is going to go down by a good $3,

00:17:09.080 maybe even more than $3,

00:17:11.100 in the store

00:17:12.540 once, you know, the,

00:17:15.160 this lower price inventory,

00:17:18.580 uh, carries through.

00:17:20.200 And, it's, it's really interesting to me

00:17:23.660 that, I think that's really significant,

00:17:26.940 and there's almost been, like,

00:17:29.520 nothing about that in the media

00:17:31.460 or the press.

00:17:32.540 And, I think that the government

00:17:34.060 has been very successful

00:17:37.000 in, in announcing,

00:17:40.860 you know, to me,

00:17:42.080 this, this complaint

00:17:44.840 that they're filing against Ontario

00:17:47.220 is kind of like,

00:17:48.620 hey, look,

00:17:49.160 a squirrel over there.

00:17:50.920 And, the fact that they had

00:17:53.100 to completely revamp

00:17:54.500 the beer markup

00:17:55.480 seems to not be

00:17:57.260 the predominant thing

00:17:58.800 that's talked about

00:17:59.840 in the media.

00:18:01.000 But,

00:18:01.640 we feel like

00:18:03.780 we've managed to make

00:18:05.720 craft beer affordable

00:18:06.960 for every,

00:18:08.280 for all consumers

00:18:09.320 in this province.

00:18:10.020 And, it's not just

00:18:11.200 our beer,

00:18:12.400 it's all craft beer.

00:18:14.540 All craft beer

00:18:15.580 from, you know,

00:18:17.040 eligible breweries

00:18:18.520 is going to go down

00:18:20.120 significantly in price.

00:18:22.000 And, so,

00:18:24.120 and we have said

00:18:25.400 all along

00:18:26.260 that that was

00:18:27.060 one of our goals.

00:18:28.980 So, we, you know,

00:18:30.460 we feel really

00:18:31.500 pretty chuffed

00:18:32.580 about that.

00:18:34.780 I think you should be

00:18:35.940 really proud of that.

00:18:37.100 And, I think it, 0.90

00:18:38.080 I mean, it's ridiculous, 0.80

00:18:39.660 but it seems as though 0.93

00:18:40.620 the government

00:18:40.960 is pretty effective

00:18:41.860 in selling it right now,

00:18:43.080 or at least playing

00:18:44.120 the politics of distraction,

00:18:45.620 that you must be

00:18:47.860 a good Albertan

00:18:48.700 if you're willing

00:18:49.340 to spend

00:18:50.120 three dollars extra

00:18:52.040 on a six-pack

00:18:53.220 of beer.

00:18:54.140 I mean,

00:18:54.480 it's crazy,

00:18:56.380 but it is,

00:18:57.720 it's working.

00:18:59.380 It's working

00:18:59.940 because nobody

00:19:00.560 is talking about

00:19:01.320 the fact that

00:19:02.080 you guys nearly

00:19:03.000 lost your business

00:19:04.200 and were dragged

00:19:05.420 through

00:19:05.980 legislative purgatory

00:19:08.440 for three years

00:19:09.720 just to save everybody

00:19:11.420 a bunch of money

00:19:12.440 on beer

00:19:13.000 and, like you said,

00:19:13.980 make craft beer

00:19:16.240 more affordable

00:19:17.760 for everybody

00:19:18.820 who wants to buy it.

00:19:20.800 Yeah.

00:19:21.820 So,

00:19:22.880 I will,

00:19:24.400 I will say

00:19:25.140 that if I can

00:19:26.280 that I really

00:19:27.340 want to thank

00:19:28.940 Ben Grant,

00:19:31.100 who was our lawyer,

00:19:32.200 who represented us

00:19:33.380 in,

00:19:34.040 in these

00:19:35.320 tribunals,

00:19:37.040 and I think

00:19:37.680 he did

00:19:38.280 a fantastic job

00:19:39.660 and is

00:19:41.120 maybe the main

00:19:42.740 reason why

00:19:43.580 we won

00:19:44.140 and I'd also

00:19:45.700 like to thank

00:19:47.020 the Canadian

00:19:48.880 Constitution Foundation,

00:19:50.820 in particular

00:19:51.500 Derek Frum,

00:19:53.140 who supported us

00:19:54.580 in,

00:19:55.240 in this endeavor

00:19:56.340 and,

00:19:57.040 frankly,

00:19:57.600 I,

00:19:58.100 I really don't

00:19:59.860 know that

00:20:00.740 we could have

00:20:01.460 soldiered on

00:20:02.200 for the three years

00:20:03.200 without their support

00:20:04.780 and,

00:20:06.020 and also

00:20:07.020 to steam whistle

00:20:08.000 for,

00:20:08.720 you know,

00:20:09.280 fighting the fight

00:20:11.240 as well

00:20:11.780 in a different

00:20:12.380 venue.

00:20:14.060 Bo,

00:20:14.560 how do people

00:20:15.360 find out more

00:20:16.460 about the

00:20:17.780 tribunal decision

00:20:18.680 or how do they

00:20:19.700 support Artisan Ales

00:20:20.920 or find out

00:20:21.580 what you guys

00:20:21.980 are up to?

00:20:23.940 Well,

00:20:24.340 they can certainly

00:20:25.100 visit our,

00:20:27.500 our Facebook page

00:20:29.420 and our website,

00:20:30.480 it's

00:20:30.860 artisan-ales.com

00:20:33.140 and,

00:20:34.540 we would love it

00:20:35.920 if they would

00:20:36.460 particularly buy

00:20:37.700 our beer

00:20:38.680 now that it's

00:20:39.900 much more

00:20:40.560 affordable

00:20:41.040 because

00:20:41.940 we're

00:20:43.200 really

00:20:43.920 a very

00:20:45.500 beer geeky

00:20:46.580 agency,

00:20:47.380 so we're all

00:20:48.320 about representing

00:20:49.460 some really

00:20:50.860 incredible

00:20:51.520 microbreweries

00:20:52.480 and,

00:20:53.180 um,

00:20:53.500 I'm really

00:20:53.940 hoping that,

00:20:55.180 you know,

00:20:55.520 with these price

00:20:56.240 changes,

00:20:57.320 that,

00:20:57.960 that means that

00:20:59.140 people who are

00:20:59.800 interested in beer

00:21:01.020 have an opportunity

00:21:02.500 to really sample

00:21:04.260 a much,

00:21:05.480 uh,

00:21:06.540 wider array

00:21:08.040 of craft beer.

00:21:10.980 Well,

00:21:11.520 Bo,

00:21:11.640 I want to thank you

00:21:12.440 for coming on the

00:21:13.400 show today.

00:21:13.900 I want to thank you

00:21:14.560 for fighting this

00:21:15.440 fight to make beer

00:21:16.540 more affordable

00:21:17.660 for all Albertans

00:21:19.580 in 2019.

00:21:21.260 You've really done

00:21:22.200 something that's

00:21:22.840 quite incredible.

00:21:24.140 When taxes go up,

00:21:26.480 they're very,

00:21:27.680 very seldom

00:21:28.400 repealed or lowered

00:21:29.800 and somehow

00:21:30.640 you did manage

00:21:32.260 to do that.

00:21:32.900 So,

00:21:33.180 I want to thank you

00:21:33.880 on behalf of all

00:21:34.800 Alberta beer drinkers

00:21:36.000 for what you've

00:21:36.960 put yourself through

00:21:37.760 for the last

00:21:38.600 three years.

00:21:40.540 Um,

00:21:40.940 cheers.

00:21:41.640 We're,

00:21:41.920 we're as happy

00:21:43.760 as you are.

00:21:44.780 Happier,

00:21:45.300 probably.

00:21:47.280 Well,

00:21:47.760 Bo,

00:21:47.860 I want to thank you

00:21:48.420 for coming on the show

00:21:49.200 and I want to wish

00:21:49.840 you and yours

00:21:50.600 a very Merry Christmas.

00:21:52.460 Same to you,

00:21:53.140 Sheila.

00:21:53.800 Thanks,

00:21:54.260 Bo.

00:21:54.780 Thanks.

00:21:59.800 I'm going to do my best

00:22:09.800 to find out exactly

00:22:11.040 how much money

00:22:12.220 the Alberta government

00:22:13.640 spent fighting Bo

00:22:15.040 in court,

00:22:16.240 hiring themselves

00:22:17.300 the best,

00:22:18.140 most expensive lawyers

00:22:19.520 to try to crush

00:22:20.780 Bo and her business.

00:22:22.420 Thank goodness Bo

00:22:23.180 had the support

00:22:23.860 of the Canadian

00:22:24.480 Constitution Foundation

00:22:26.260 who took on her case

00:22:27.860 because there is

00:22:28.920 no way

00:22:29.660 a small business owner

00:22:30.660 in this Alberta economy

00:22:32.700 could afford to fight

00:22:34.300 with the finance minister

00:22:35.700 for three long years.

00:22:39.180 In the end of it all,

00:22:40.620 Bo saved her own business

00:22:42.060 but she's also saving

00:22:43.680 Albertans a pile of money

00:22:45.280 because we no longer

00:22:46.380 have to pay those

00:22:47.380 small brewers anymore

00:22:49.120 government welfare

00:22:50.840 and a bottle of craft beer

00:22:52.700 just got a whole lot cheaper

00:22:54.140 for the rest of us.

00:22:55.840 Well,

00:22:56.220 Merry Christmas everybody.

00:22:57.940 Thanks so much

00:22:58.540 for taking the time

00:22:59.480 this year

00:22:59.940 to tune into the show.

00:23:01.380 I'll see everybody

00:23:02.060 back here

00:23:02.800 at the same time

00:23:04.000 in the same place

00:23:05.240 next week

00:23:06.200 in 2019

00:23:07.140 and remember

00:23:08.140 don't let the government

00:23:09.400 tell you

00:23:09.880 that you've had

00:23:10.480 too much to think.

00:23:11.540 genugia

00:23:24.980 in the new war

00:23:26.040 as you think

00:23:26.420 is the best

00:23:27.180 the case

00:23:28.260 for a long time

00:23:29.400 to give you

00:23:30.360 the new war

00:23:30.920 and time

00:23:31.040 to serve you

00:23:31.780 as you're

00:23:32.000 asking them

00:23:32.600 in the same place

00:23:33.240 Thank you.

Rebel News Podcast - December 27, 2018

Artisan Ales’ bitter-sweet victory against Notley NDP is a win for Alberta (Guest： Bo Vitanov)

Episode Stats

Summary

Transcript