Big Rock Brewery blames layoffs on provincial taxes

Calgary-based company says management forced to take immediate cost-cutting measures

Mario ToneguzziCalgary-based Big Rock Brewery plans significant cost-cutting measures, including laying off staff, in response to what it describes as “the persisting regulatory environment for brewers of its size in Alberta.”

In a news release, the company did not say how many people were being let go, nor how many people work at the brewery.

“The 104 per cent increase in the net Alberta beer markup (provincial tax) imposed on Big Rock by the previous government of Alberta in late 2018 (being a 160 per cent increase since 2016) has forced the corporation’s senior management to take immediate cost-cutting measures as the increase in the tax on Big Rock’s beer in Alberta has eroded the profitability achieved by Big Rock in 2018,” said the company.

“If the current provincial tax framework for beer in Alberta persists through year-end of fiscal 2019, Big Rock’s net Alberta provincial liquor tax charges of $10.7 million for fiscal 2018 are estimated to increase to greater than $21 million for fiscal 2019 (based on 2018 Alberta sales volumes).”

Big Rock was founded by Ed McNally in 1985.

“Our ultimate goal is to allocate our resources in a manner that will ensure the success of the future business and maximizes shareholder value,” said Wayne Arsenault, president and CEO, in a statement. “We are creating a sustainable business model by accessing new ways to grow revenues, reduce expenses and improve margins, despite the current tax regime and regulatory environment for beer in Alberta.

“This process can be painful, and we recognize that personnel reductions are difficult for our employees, their families and the community. We value the dedicated team at Big Rock for working hard towards this goal. We will continue to work with the new government of Alberta to establish a positive regulatory environment for small brewers in the province that is predictable, stable and supports growth.”

The company has brewing operations in Calgary, Vancouver and Toronto, and sales in five Canadian provinces and two territories.

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Big Rock Brewery

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