Brewing Industry in Canada

In its early development period, the industry consisted of small, independent breweries scattered throughout the country.

Brewing Industry

Brewing began in Canada with the first settlers and traders. In the beginning, beer making was a cottage industry, but in 1668 Canada's first commercial brewery was built by the Intendant Jean Talon at Québec City. The enterprise was undertaken for three purposes: to promote temperance by offering an alternative to strong imported French liquors; to reduce the amount of currency leaving the country for the purchase of imported beverages; and to utilize the abundance of grain available in the New World.

In its early development period, the industry consisted of small, independent breweries scattered throughout the country. With the advent of modern distribution systems, technological advances to improve quality control and rising costs, production became more centralized and most local breweries disappeared. However, during the 1980s a resurgence of smaller breweries, commonly called microbreweries, began to appear in Canada. They tend to serve local or regional markets.

Today Canada's brewing industry comprises two national companies, Labatt Breweries of Canada (8 plants) and Molson Breweries (8 plants), and six regional breweries located in different areas of Canada: Big Rock Brewery and Drummond Brewing (Alberta), Lakeport Brewing Corporation, Northern Breweries and North Algonquin Breweries (Ontario), Moosehead Breweries Limited (New Brunswick), Pacific Western Brewing Company (British Columbia) and Sleeman Brewing and Malting Company Limited (Ontario and British Columbia ). Additionally, there are 40 microbreweries in every area of Canada except New Brunswick, Nova Scotia, Prince Edward Island and the Yukon and Northwest Territories.

In a little more than a decade, the Canadian brewing trade has changed dramatically. For example, there has been the emergence of the brew pub, a combined brewery and licensed pub selling beer for on-premise consumption only. These establishments enjoyed a renaissance as a result of the "real ale" movement in Europe. Brew pubs have been operating in Canada since 1983.

Types of Beer

Beer is used as a generic term and includes both lager and ale. Of the range of beer types available to consumers, today lager is preferred by most Canadians (56%) followed by ale (34%).

The difference between the two is that lager is lighter in taste and is made with a type of yeast that drops to the bottom of the fermenting tank. More hops are used to brew ale and the yeast rises to the top of the tank. Less than 1% of the market is sold as stout (heavy-bodied darker and sweeter beer brewed with roasted malt and more hops) and porter (a weaker version of stout).

Light beers, containing up to 4% alcohol by volume, were introduced in Canada in the late 1970s. Regular-strength Canadian beers contain 5% alcohol by volume. In the past several years, both large and small brewers have expanded their range of products to offer consumers more selection to meet different tastes. New brewing technologies and processes have produced the following types of beer: extra light, dry, extra dry, dry light, strong, extra strong, ice, wheat, beer coolers, packaged unpasteurized and no-alcohol beers and beer coolers.

Regulation and Taxation

The brewing industry is one of the most heavily regulated in Canada. Breweries must obtain licences to operate from both the federal and provincial governments. Generally, the provinces have control over distribution and retail systems, labelling, advertising and marketing practices, importation and pricing. They may, as well, control the number and types of beers available for sale. The federal government regulates ingredients, packaging and labelling and broadcast advertising.

Taxes represent the single largest component of the price of beer. On average 53 cents of every dollar spent on beer for home consumption is made up of federal and provincial taxes. At this level, Canada ranks with Norway as having the highest taxes of 23 leading industrialized countries. Canadian taxes are about three times higher than on beer bought in the United States, where only 18 cents on each dollar goes to taxes.

Economic Contributions

In 1996, the beverage industries produced $8.1 billion and grew at an average compounded annual rate of almost 5.3% over the 1990 to 1996 period. In 1996, the brewery products industry segment represented almost 48.8% of total beverage industries shipments. Canadian domestic exports of beer (primarily to the US) totalled $217.7 million in 1996. Over the 1990 to 1996 period, domestic exports in this industry had an average growth rate of 4.21%. Over 98% of the beer consumed in Canada is produced by Canadian breweries.

Over the 1990 to 1996 period, total employment within Canada's brewing industry declined from 12 636 to 9937, an average annual drop of 4.4%.

Revenue to all levels of government generated by the brewing and marketing of beer amounted to roughly $4.9 billion in 1994. About $3.2 billion came from federal excise duty and sales tax and provincial liquor board profits and sales taxes. The remainder represented various taxes paid to the different levels of government by the employees and companies involved.

Over 19 million hectolitres of Canadian beer were sold for Canadian consumption in 1995, or 66.5 litres per person. Beer sales have shown little or no growth over the last five years and remain down from a peak of 20.7 million hectolitres in 1987.

Brewing and the Environment

On the retail end, vendors not only sell beer but handle bottle returns. More than 78% of all beer sold domestically by the industry is in returnable and reusable bottles. Ninety-seven out of every 100 of those bottles come back for cleaning and refilling. A bottle can be reused 15 to 20 times, preventing enormous wastage. Once a bottle is spent, it is crushed and sent to glass-makers for the manufacture of new bottles.

Aluminum beer cans (which account for 15% of all sales) are also crushed and recycled, as are the beer cartons. Draught beer is sold in reusable kegs that can last 15 to 20 years before they too are also crushed and recycled. Even the husks of the spent grain used in the brewing process are recycled. After use in the brewing process, they are collected and sold as animal feed.

Responsible Use

The Canadian brewing industry was one of the first among brewers internationally to address the issue of responsible use and continues to fund a number of programs aimed at discouraging misuse. In the past decade alone, the industry has provided funding of over $95 million to raise public awareness of the risks of alcohol misuse, to mount educational programs aimed at altering risky attitudes and behaviours with respect to alcohol use and to foster bio-medical and social and behavioural research into alcohol misuse.

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