President of Cellar Maker Imports Reed White joins Alberta Primetime host Michael Higgins to discuss industry calls to scrap a provincial wine tax less than a year after it was implemented. This interview has been edited for clarity and length. Michael Higgins: The province calls this an “ad valorem” tax. It’s quite complex. As someone in the industry, how do you boil it down? Reed White: This is really a tax on the voting public and people who consume wine in Alberta. Ad Valorem is just a Latin term to keep it as confusing as possible in our circles. Essentially for government this is a tax that’s being applied to wine and only wine within Alberta. Essentially it’s a new tax that was added on April 1, 2025, and it’s a sliding scale of five per cent, 10 per cent and 15 per cent, depending on what wine you’re consuming within Alberta. MH: What does that do to the price customers are paying, and in the choices they end up making? RW: I mean, everybody has a budget. For a lot of people that didn’t even see this coming or understand that it was happening, what we’re sort of seeing is less choice in the province. You’re seeing people drink down or maybe decrease in their overall quality of what they might be drinking. Wine wise, we’re seeing escalating prices across the board in the province and I would say certainly an erosion of the value of what you might be consuming. It’s very important to note we existed in this sort of flat tax province previously, and Alberta was very competitive on that front. Doesn’t matter the value of the wine, you can drink whatever you want. Now here’s a tax where the government gets their piece, and everyone else sort of gets along with that. This is a tax on top of another tax on top of another tax. So certainly for everyone here that’s facing interest rates, inflation, spending and budgeting issues, this is just another thing that makes life a little bit more expensive for the common person in our province. MH: Your industry is obviously taking a hit here. Is there anyone who stands to benefit? RW: It’s really just the government that’s benefiting. In addition to that, you’d probably see some of the multinational corporations benefit. To really sort of run down things, they would be the ones that benefit. There’s a lot of multinational corporations in the liquor industry, in the wine industry, where that money doesn’t stay in the province. What people forget is most of the agents, importers and distributors like myself, are small business owners based here in in Alberta or within Canada. The idea is, we hire locally. We keep our money here, we invest locally, we expand locally, and do all those sorts of things. So the bigger, larger companies that were sort of either immune to the tax, they were able to sort of skip over this. Their profits leave our province and country where the rest of us are sort of caught holding the bill. You’ve got a whole bunch of small business owners now either trying to absorb some of the tax to keep things competitive, or passing it directly onto the consumer and just making life more expensive for everybody else. In some cases I think our industry might be looked at as sort of in contraction rather than an expansion. We’d rather be hiring somebody and bringing staff on and bringing new wines and wineries to the market. Instead, we’re looking at how long can we afford to do this? How long can we afford to sort of absorb these costs before it starts to affect the bottom line and whether the business is viable. That also translates into restaurants and hotels as well. This is the tax that once it’s applied on our end, that’s just the wholesale side of it. It then sort of gets doubled each time. You look at what a retailer adds on, their percentage or margin, what restaurants add on in order to stay in business, what hotels do as well. It’s a really tricky time for our industry. MH: Minister of Red Tape Reduction Dale Nally issued a statement this week saying, “Alberta is the most tax friendly and open and free jurisdiction in Canada for alcohol, including wine. Our government’s ad valorem tax applies to about 16 per cent of wine sold and after taxes, a $20 a bottle of wine at invoice prices up to 87 per cent more expensive in other provinces compared to Alberta.” It goes on to say the ad valorem tax is not a new concept and is used by many provinces across Canada. How does that position resonate with you? RW: I think there’s not a lot of truth in that. He misrepresents the facts. The truth is our province brings in approximately 18,500 different SKUs of wine, or products of wine. This tax affects 17,500 of them. That’s about 94 per cent of all the wine that comes in Alberta is affected by this tax. About 11,000 different products in Alberta see that 15 per cent tax added on to it. There may be other provinces using a structure like this, but this was an unnecessary tax to add on in Alberta. Basically, we had a very successful system that was the envy of the world, and now Alberta has quickly jumped up to being one of the most expensive liquor and wine markets in North America. For him to say we’re still competitive, I just don’t think there’s a truth there. Why target wine? I think is a big question. Why just wine? Why just wine at a certain price? We’re not talking about Copper Moon and Naked Grape. There’s no tax on those as entry level products in the market that are industrialized and made elsewhere. I just look at it as, why this? You could have maybe done a flat tax of two per cent and done it across the board of every product available for purchase.
