The Real Impact of Alberta’s Ad Valorem Wine Tax on Restaurants
Framed as a tax on luxury, the province’s new ad valorem wine markup is quietly driving up costs on bottles you’d find at everyday restaurants across Alberta. It’s not high-end steakhouses or elite cellars feeling the squeeze, it’s your favourite neighbourhood spot, the one working to serve quality food and drink at accessible prices.
This isn’t just a tax on wine. It’s another weight added to already overburdened small business owners, putting jobs, livelihoods, and the future of Alberta’s dining scene at risk.
What is the Ad Valorem Wine Tax?
The recently introduced ad valorem tax adds an additional percentage-based markup on wine bottles that exceed a certain wholesale price, starting at $11.25 per bottle. This price includes a large portion of the wines sold in restaurants. And unlike other taxes in Alberta’s liquor system, this one targets only certain wines, breaking from our province’s long-standing flat markup model. These changes are making Alberta wine pricing the most expensive in North America. Alberta has been the best wine market outside of New York, San Francisco and LA for three decades. These decisions are destroying Alberta’s vibrant market.
Why This Hits Restaurants Hard
For restaurant owners, wine isn’t a luxury, it’s a standard offering on the menu, and often one of the only ways they can improve razor-thin margins.
One independent restaurateur shared:
They won’t be able to pass these costs onto guests, meaning they’ll be forced to absorb the impact.
This tax represents the single largest cost increase on their books, greater than food inflation or tariffed imports.
Why It Matters for Everyday Albertans
This isn’t about fine dining for the elite. The wines impacted are often mid-tier bottles enjoyed by everyday Albertans when they go out to support their local eateries.
And it’s not just wine prices that are going up. Restaurants are already struggling with:
Rising costs across food, labour, and utilities
Guests spending less due to inflation and shrinking disposable income
Profitability at risk – 2024 saw record restaurant bankruptcies in Alberta
In fact, a recent survey from AHA shows:
52% of restaurants cite reduced consumer demand as a major issue
81% say food and beverage costs are hurting their business
The Competitive Disadvantage for Canadian Wines
The tax also undermines efforts to support Canadian producers. There are virtually no Canadian wines priced below the $11.25 threshold. This means restaurants trying to support Canadian wineries, many of which are already struggling, are hit even harder.
What the AHA Is Asking
The Alberta Hospitality Association, representing over 700 restaurants (77% of them independently owned), is urging the government and AGLC to reconsider this policy and replace it with an across-the-board flat tax markup increase on all liquor products in keeping with Alberta’s flat tax liquor markup system and level playing field commitments that meets the government’s liquor revenue needs.
This would:
Preserve Alberta’s competitive, transparent liquor pricing
Support Canadian wine producers and small businesses
Avoid unfairly penalizing guests and restaurant operators alike
The Bottom Line
Policy decisions ripple. When they hit small businesses, especially restaurants already on the brink, the consequences are real: job loss, business closures, and an even tougher economic recovery.
We’re simply asking for fairness and a seat at the table before changes are made that affect thousands of Albertans.