Taxes account for 46% of the price of beer in Canada, according to the brewing industry. One of the culprits is the automatic indexation of the federal excise tax, which is singled out by Molson Coors. The brewer got a break on 1er last April, but the fight has to be started again for next year.
“In the price consumers pay everywhere, 46% are taxes,” said Frederic Landmeters, President of Molson Coors Canada, on the sidelines of an event organized by the Board of Trade of Metropolitan Montreal (CCMM). Friday midday.
According to the boss of the company, Canada is one of the countries that tax beer the most with the United Kingdom. Canada taxes beer much more than the United States, in particular.
This proportion of 46% is however disputed by researchers who estimated it at around 20 to 30% in 2021, as reported by journalist André Noël in the online media Pivot. last April 121.
Notwithstanding the debate over the numbers, one of the issues, according to the brewing company, is the formula for indexing the excise tax, which tracks the evolution of the consumer price index (CPI) since 2017.
PHOTO MARCO CAMPANOZZI, THE PRESS
Molson Coors Canada President Frederic Landmeters
“For 2023, we were facing an increase to the 1er April by 6.3%. We calculated the increase in dollars, in price increase in store, we went to present it to the federal government saying to them: “Help us, it does not make sense”, explained Mr. Landtmeters in a point Press.
Indexation in line with the CPI in 2022, or 6.3%, would have represented, for the entire beer industry in the country, taxes of 40 million, which would then have been passed on to consumers. These are already facing strong price increases in stores, had indicated the president of Molson Coors Canada a few minutes earlier during the lunch-conference organized by the CCMM.
Finally, the federal government limited the increase to 2%.
Since 1er April, the excise tax is therefore $2.91 per case of 24 bottles. In addition to this tax, there is notably the specific tax on alcoholic beverages from the Quebec government and provincial and federal consumption taxes.
But the fight has to be started again because we are heading for a new rise of 4% on the 1er April 2024.
The industry is therefore campaigning for the abolition of the automatic excise tax increase formula. According to the Federal Registry of Lobbyists, Mr. Landtmeters met with cabinet members of the Department of Finance last February for this purpose.
The Lesson of Bud Light
Besides taxes, Mr. Landtmeters spoke to his audience about diversity and the rise of non-alcoholic beers.
The Canadian boss touched on the subject in his chat, saying diversity is part of the company’s value of putting people first, which, he argued, means all people.
“We try to develop commercial programs, including advertisements, which are aimed at consumers, all our consumers,” he later answered a question from a journalist about the possibility of calling on a transgender person in a possible advertising campaign.
Bud Light has been the subject of controversy since mid-March when a transgender influencer, Dylan Mulvaney, posted a video on her Instagram account promoting a contest. The company had prepared a can of Bud Light with his picture on it. American conservatives have called for a boycott. The brand’s sales suffered as a result.
The Heineken 0.0 featured at the Grand Prix
Low alcohol products represent at least 10% of the market in Spain, but 1% in North America. Molson Coors sees this as an opportunity for growth. “In two weeks, we have the Formula 1 Grand Prix in Montreal,” said Mr. Landtmeters during the talk. If you watch the Grand Prix live or on TV, chances are you’ll notice that it’s the Heineken 0.0 that’s going to be featured. It’s a choice that makes no sense in relation to the size [des parts de marché] of this beer. [Mais] it makes all the sense in the world in terms of growth [attendue pour] this product. »
The brand is imported from the Netherlands. For a locally brewed non-alcoholic beer, turn to Brasseurs de Montréal, a microbrewery owned by Molson, which offers four versions.