Essentially, if brewed products get the extra excise tax hit, there could be a price change that comes about. But of more concern would be the last paragraph, which could require a brewer who's made a beer of 12%+ abv to get a distillers license. I presume they have exempted wineries given the number of 12% plus abv wines in existence, but that last paragraph makes it sound like if you want to sell anything other than wine at 12% plus, you'll need that new license - and that would include brewers outside the country who want to sell in Canada. Perhaps the fact that they specify imitation spirits would exclude a brewery, but it also sounds like they are now classifying anything above 12% as an imitation spirit, even if it is actually beer.Excise Duty on Imitation Spirits
For the purpose of applying excise duties, there are three principal categories of alcohol products: spirits, wine and beer, with different rates for each category.
Recently, high-alcohol spirit-flavoured brewed products, also known as imitation spirits, have been introduced to the Canadian marketplace. These products are derived from a brewing process, but utilize flavourings to introduce the desired spirits flavour and a secondary production process to elevate the alcohol content to about 20 per cent alcohol by volume (ABV). In contrast, most consumer beers contain about 5 per cent ABV. The new products compete against traditional spirits products, but qualify and are subject to the lower excise duty rate on beer ($0.3122 per litre) because they are derived from a brewing process.
Budget 2008 proposes to make Canada's alcohol excise taxation system fairer by treating imitation spirits like its competition, spirits, rather than like beer. Effective February 27, 2008, a maximum allowable alcohol concentration of 11.9 per cent ABV will be established for the excise duty rate on beer to apply to a product derived from a brewing process. Brewed products (including imitation spirits) above this threshold will qualify as spirits and be subject to an excise duty of $11.696 per litre of absolute alcohol. The 11.9 per cent represents the highest alcohol concentration achievable via traditional yeast fermentation processes, and thus the change will not affect most consumer beers.
As a result of this change, producers or importers of imitation spirits with an alcohol content above 11.9 per cent will be required to obtain a licence to produce spirits and report and remit the appropriate excise duty. To assist such producers or importers with the transition to the different licensing regime, their existing licence to produce or import beer will be treated as a licence to produce or import spirits until 30 days after this measure receives Royal Assent, and they will have the same deadline to apply for and receive a spirits licence.
Thoughts? Maybe someone from R&R knows if this ahs an impact on any plans for Black Albert or similar beers? Maybe someone from Trafalgar, being the only brewery I can think of that's done any beers of this abv, has an idea if this will impact them?
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