Canada: During the past decade, the annual value of imported beer has increased five-fold

Canada is very much a nation of beer drinkers. Beer is by far the most popular alcoholic beverage among Canadian consumers, Statistics Canada communicated on February 15. However, beer drinkers are increasingly swinging more and more to imported brands to quench their thirst.

Imported beer had captured only about 9% of Canada's beer market by 2002. However, this was three times the market share imported brands had just 10 years earlier. Imports of beer have increased at a pace far exceeding the growth in the domestic market. In 2003, the nation imported beer from 61 countries.

During the past decade, the annual value of imported beer has increased five-fold. In 1994, imports were worth just under $69 million; by 2003, the value had jumped to more than $335 million.1 Preliminary data for 2004 show that annual imports have continued their upward trend, reaching $348 million. However, it should be noted that 2004 data are subject to revisions.

With annual beer sales in Canada at nearly $8 billion in 2003, this growing trend has implications for Canada’s domestic beer industry, which makes a significant contribution to the economy. The industry accounts for more than 200,000 jobs and directly adds more than $2 billion to gross domestic product.

The combination of changing preferences, demographics, and economic forces has been reshaping the industry. Canada's drinking age population has risen steadily over the past decade. More recently, the strengthening Canadian dollar has contributed to the growing affordability of imports.

Furthermore, trade agreements and provincial beer marketing practices, which led to falling trade barriers, facilitated the increase in imports.

This paper explores trends in Canada's beer trade over the past decade, particularly the extent to which imported beer has made its way into Canada. It also examines the countries that are Canada's main sources of imported beer. In addition, it analyzes developments in Canada's beer exports south of the border and the resulting trade balance with the United States.

Note that trade data understate the amount of foreign labelled beer sold in Canada as such beer brewed and sold in Canada is not included.

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