Chambly (Québec), April 24, 2002 - André Dion, Unibroue president and CEO, and president of the Association des microbrasseurs du Québec, says that he is dismayed and outraged by the lack of vision shown by some of the commission's members. Dion was reacting to the Finance Committee's refusal to amend Bill C-47 and reduce excise taxes for microbreweries.

"To refuse to provide us with fiscal conditions that are similar to those in most industrialized countries, is, in essence, leading us to slaughter," says Dion. "Over the last few years we have repeatedly demonstrated the inequity of the current system. What we are looking for is a situation similar to that which can be found in Belgium, Germany, France, Austria, the Netherlands, Denmark, Finland, the United States and Britain. In these countries, beer duties for small regional breweries are reduced in recognition of their distinctiveness. In our case, the government seems to prefer to turn a blind eye, and give in to pressures by large breweries to maintain a system that will guarantee our demise in short order."

The statistics are revealing. Thirty-eight of Canada's 86 regional breweries have been forced to shut down in the last five years.

"Obviously," continues Dion, "extremely fierce competition in our market, combined with intense lobbying by American breweries, weighs heavily in the balance and puts us at a huge disadvantage."

The microbreweries have requested a significant reduction in excise taxes that currently sit at 0.28 cents per litre of beer produced, regardless of production volume.

For example, an American consumer pays $1.21 Cdn. in beer tax on a case of 24 bottles, while Canadians pay $4.09 for the same case bought at a grocery store, and $6.72 when the product is consumed in an establishment.

Measures currently in effect in the United States, who signed the Free Trade agreement with Canada, require the payment of a mere 0.09 cents Cdn. per litre in excise tax for a brewery producing less than 1,000,000 hectolitres per year, while the base rate is 0.23 cents per litre for larger breweries. This 60 per cent reduction of the base rate is applied to the first 72,000 hectolitres produced by small breweries.

Without measures such as these, it is obvious that Canadian microbreweries cannot be competitive. Their market share has eroded considerably over the years, dropping to 1995 levels, or barely 4.1 per cent, in the last two years, while the volume of beer imported, mostly by large Canadian breweries, has increased by 175 per cent over the same period and now holds more than 8.1 per cent of the market!

The microbrewery association president does not understand why the federal Minister of Finance continues to refuse microbreweries the fair and necessary conditions that would allow them to compete with foreign breweries.

According to Dion, "It is time that the federal government open its eyes and respond to the needs of its constituents. The requests that we have repeatedly made over the years are merely to obtain parity with American breweries with a reduction of 60 per cent of the current rate of 0.28 cents per litre to 0.12 cents per litre, so that we can compete on even footing with American breweries. This change would apply only to Canadian breweries producing less than 300,000 hectolitres.

It should be noted that this request has been endorsed by the Canadian Federation of Independent Business and many of the concerned ministers and elected officials. Finally, Mr. Dion reiterated the microbreweries' intention to take whatever political measures are necessary to obtain the kind of treatment that is vital to their survival.