U.S. Beer Exports to Canada Soar

By M. L. Bailey

While domestic beer sales in Canada were slipping in 1995, beer imports as a whole jumped 25 percent. U.S. beer exporters maneuvered a 34-percent sales increase in 1995, from 34.6 million liters to 46.2 million liters.

U.S. brewers have had a roller coaster ride in this northern market since the late 1980s. Following the Free Trade Agreement between Canada and the United States in January 1989, U.S. beer exports to Canada spiraled up.

However, from mid-1992 through mid-1994, both Canada and the United States imposed levies on imported beer, which resulted in falling sales.

On May 5, 1994, Canada and the United States concluded consultations under a Memorandum of Understanding on Provincial Beer Marketing Practices. Trade barriers came down.

After bottoming out in 1993 with only 29.7 million liters in sales, U.S. brewers made a big comeback. In 1995, U.S. sales were up almost 50 percent from 1993.

Domestic Sales Down: Imports Up

The Beer Association of Canada, representing national companies, regional brewers and many micro-breweries, reports per capita consumption of beer in 1995, based on retail sales, dipped 2.5 percent to 66.5 liters, down from 68.2 liters in 1994. Total Canadian beer sales in 1995 were 19.2 million hectoliters (1 hectoliter = 100 liters).

Although beer imports account for only 3.3 percent of total beer sales in Canada, 85.9 million liters of imported beer were sold in 1995.

Packaging and Labeling Important

U.S. brewers wanting to pursue sales in Canada must comply with Canada’s Federal packaging and labeling regulations outlined in:

• The Food and Drug Act and Regulations (Order #H41-1-90E).
• The Consumer Packaging & Labeling Act (Order # YX55-1985-C-38).
• The Consumer Packaging and Labeling Regulations (Order # RE910).

Copies of Canadian Federal packaging and labeling regulations are available from:

Canada Communications Group
45 Sacre-Coeur Blvd.
Hull, Quebec K1A 0S9
Tel.: (819) 956-4800
Fax.: (819) 994-1498

Labels must be in both English and French (name and address of the manufacturer/dealer in either English or French) and indicate quantity expressed in metric units of volume. If over 1.1 percent, alcoholic volume and common name must be declared as follows:

Canadian taxes account for 53 percent of the average retail price of beer, compared to 18 percent in the United States. The price of U.S. canned beer in Canada reflects the tax advantage enjoyed by U.S. brewers:

Canned Beer Prices in Top Four Importing Provinces, 1995
6-pack in Can.$1

1) Can. $1 = U.S. $1.36

Resolution of trade conflicts that ended unfair trade practices set the stage for the current expanding market. An improving Canadian economy also has contributed extra impetus to imports.

Trade associations attribute the declining domestic retail market in part to an increase in the number of "brew-your-own-beer" facilities; it is believed that overall consumption remains stable. U.S. beer exporters wanting to enter the expanding Canadian import market can expect continuing favorable market conditions.

Provinces Control Beer Imports

Each provincial government has its own liquor board, with differing requirements. Some provinces allow sales only through a brewer’s retail store; others allow purchases from a corner store, supermarket or provincial liquor store. Only Alberta has privatized retail alcoholic beverage sales.

Addresses follow for the top four provincial importers:

M. L. Bailey is an agricultural assistant with the FAS Office of Agricultural Affairs in Ottawa, Canada. Tel.: (1-613) 238-5335, ext. 267; Fax.: (1-613) 233-8511.

Last modified: Thursday, October 14, 2004 PM