Welcome to UK420

Register now to gain access to all of our features. Once registered and logged in, you will be able to contribute to this site by submitting your own content or replying to existing content. You'll be able to customize your profile, receive reputation points as a reward for submitting content, while also communicating with other members via your own private inbox, plus much more!

This message will be removed once you have signed in.

Sign in to follow this  
Followers 0
Simple Jack

Fearing cannibalization, beer companies ask Canada for higher cannabis taxes

Fearing cannibalization, beer companies ask Canada for higher cannabis taxes

Luke Harford, president of Beer Canada, addresses the Standing Committee on Finance over Bill C-74.

Canada’s beer industry is expressing concern that the recreational marijuana market is going to cut into its profits, and it wants the government to raise the proposed tax to level the playing field.

“The potential for legal marijuana to cannibalize beer (in Canada) is much more significant compared to the U.S. because of our higher beer taxes and high prices,” Luke Harford, president of Beer Canada, told the Standing Committee on Finance over Bill C-74.

His statements give a rare glimpse into the anxiety the alcohol industry has about the pending legalization of marijuana.

Beer Canada, a trade group, represents 50 beer makers.

Part of Bill C-74 lays out the excise taxes for recreational marijuana sales.

Harford urged the committee to recommend a higher level of taxation for adult-use cannabis sales before the law goes back to parliament for a vote.

“Domestic brewers are concerned that legal recreational marijuana is going to have a negative impact on beer sales, which on a per-capita basis have already declined by 10% in the last 10 years,” he told the committee.

“The implication is clear. Low cannabis taxes will increase cannabis sales, while high beer taxes will decrease beer sales.”

Industry insiders say the concern over “market cannibalization” may prompt more alcohol companies to make forays into cannabis – or marijuana companies to start buying liquor producers.

In October, New York-based Constellation Brands – which owns, distributes and markets 100 beer, wine and spirits brands, including Corona and Robert Mondavi – acquired 9.9% of Smiths Falls, Ontario-based Canopy Growth for 245 million Canadian dollars ($190 million).

In a recent interview with Marijuana Business Daily, Sundial Growers CEO Torsten Kuenzlen – former executive for The Coca-Cola Co. and Molson Coors – said “virtually all alcohol companies are very carefully looking at the cannabis space and looking to partner in some shape or form.”



Share this post

Link to post

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  
Followers 0