Proposed Increase of Federal Excise Tax a Serious Threat to Small Brewers Part1

**EdWort** · 06-08-2009, 02:16 PM

A message from Charlie Papazian

Dear Beer Enthusiast,
Small brewers are facing an imminent and extremely serious threat to their businesses. The consequences of remaining silent have the very real potential of reducing your choice of beer and dramatically increasing the price of any beer that you purchase.
The Senate Finance Committee in Washington, DC is currently considering a proposal to increase and equalize the excise tax for alcohol beverages as part of healthcare reform deliberations. This proposal would triple the excise tax for 4.5% ABV beer and impose even higher excise tax rates for higher ABV beers.
If such a proposal becomes reality, there is no question that many small brewery businesses will suffer, some will close and consumers will face higher prices and diminished choice in the marketplace.

The Brewers Association brewery members and leadership have been actively engaged in building the case against an excise tax increase, recently submitting a letter to the Committee outlining our opposition.

We need you to speak out now. Today or tomorrow at the latest.

If you live in the following states it is most urgent that you contact your Senator who is on the Senate Finance Committee:
Arizona Nevada Arkansas New Jersey Delaware New Mexico Florida New York Idaho North Dakota Iowa Oregon Kansas Texas Kentucky Utah Maine Washington Massachusetts West Virginia Michigan Wyoming Montana If your Senators are not members of that committee, ask them to contact their Finance Committee colleagues and express their opposition to this proposal moving forward.

Your ask of them is simple:

Oppose the Tax Increase. Let them know that you oppose, in the strongest possible terms, raising the federal excise tax on beer because of the serious consequences it would have on small brewers and the craft beer they brew. Additional talking points appear below.

Once again: If one of your Senators sits on the Senate Finance Committee (roster of members below), urge them to oppose this proposal in committee deliberations.

If your Senators are not members of that committee, ask them to contact their Finance Committee colleagues and express their opposition to this proposal moving forward.
Take Action - Call and/or email your Senators’ Washington or district offices and make your personal case against this massive excise tax increase.

As always, thanks for your support.

Charlie Papazian

President, Brewers Association
Senate Finance Committee Members:
Baucus, Max (MT), Chairman Bingaman, Jeff (NM) Bunning, Jim (KY) Cantwell, Maria (WA) Carper, Thomas R. (DE) Conrad, Kent (ND) Cornyn, John (TX) Crapo, Mike (ID) Ensign, John (NV) Enzi, Michael B. (WY) Grassley, Chuck (IA), Ranking Member Hatch, Orrin G. (UT) Kerry, John F. (MA) Kyl, Jon (AZ) Lincoln, Blanche L. (AR) Menendez, Robert (NJ) Nelson, Bill (FL) Roberts, Pat (KS) Rockefeller, John D. (WV) Schumer, Charles E. (NY) Snowe, Olympia J. (ME) Stabenow, Debbie (MI) Wyden, Ron (OR)

ISSUES OF IMPORTANCE TO SMALL BREWERS EXCISE TAXES

Small brewers are small Main street businesses, typically employing 10 to 50 employees.

Small brewers represent only 4% of the entire U.S. beer market by volume, with 95% of them being very small businesses (producing 15,000 barrels or less per year).

We strongly oppose proposals to increase the excise tax on beer.

Proposals to increase and equalize the tax among all types of alcohol will tax small brewers at the highest rates because our specialty, gourmet and innovative beers typically have higher alcohol contents.
Brewers already pay a disproportionately higher share of taxes compared with other products – federal, state and local taxes represent over 40% of the retail price for beer while the same taxes equal nearly 24% of the price for all other purchases.

**EdWort** · 06-08-2009, 02:17 PM

Higher taxes will worsen the economic recession – resulting in less competitive products, reduced sales and revenues, lost jobs and, for some small brewers, business closures.

$1 per case excise tax increase will typically cost the consumer at least $1.69 due to successive mark-ups as the case moves from brewer to wholesaler to retailer.
Many small brewers are struggling to deal with the consequences of the 2008 spike in ingredient and operational costs.

**Homercidal** · 06-08-2009, 03:40 PM

I wrote my senator and let her know that increasing taxes on the mass-produced beers of lower ABV will likely yield more $$ and help protect the small business people brewing quality beers with care and concern.

**EdWort** · 06-08-2009, 03:43 PM

Yes, in the "Spread the Wealth" mantra going around these days, a hefty tax increase on brewers who have at least a 10% market share is in order. Perhaps only tax foreign owned brewing conglomerates?

Of course that tax would be passed on to the BMC swilling consumer.

**olllllo** · 06-08-2009, 04:00 PM

The craft industry in AZ is particularly vulnerable. This morning, I wrote to Jon Kyl (R-AZ) who is on the finance committee. AZ sells a tremendous amount of craft beer, most of it originating from out of state.

We cannot afford to be foreign beer dependent.

Seriously. We can't lose another brewery here.

Here is how to reach your Senator:
http://www.senate.gov/general/contact_information/senators_cfm.cfm

Here is who is on the Finance Committee:

Senate Finance Committee Members:
Baucus, Max (MT), Chairman
Bingaman, Jeff (NM)
Bunning, Jim (KY)
Cantwell, Maria (WA)
Carper, Thomas R. (DE)
Conrad, Kent (ND)
Cornyn, John (TX)
Crapo, Mike (ID)
Ensign, John (NV)
Enzi, Michael B. (WY)
Grassley, Chuck (IA), Ranking Member
Hatch, Orrin G. (UT)
Kerry, John F. (MA)
Kyl, Jon (AZ)
Lincoln, Blanche L. (AR)
Menendez, Robert (NJ)
Nelson, Bill (FL)
Roberts, Pat (KS)
Rockefeller, John D. (WV)
Schumer, Charles E. (NY)
Snowe, Olympia J. (ME)
Stabenow, Debbie (MI)
Wyden, Ron (OR)

Arkador · 06-08-2009, 05:02 PM

Proposed Increase of Federal Excise Tax A Serious Threat to Small Brewers and Your Beer Choice —Contact Your Senators Now

We received the following action alert from Support Your Local Brewery, a national, grassroots partnership of beer enthusiasts, professional trade associations and brewers dedicated to supporting and protecting the legislative and regulatory interests of small, traditional and independent craft breweries. Most action alerts are state by state and this is the first national one I’ve seen. They’re asking for everyone to contact their U.S. Senator, but especially those of you living in the following states:

Arizona, Arkansas, Delaware, Florida, Idaho, Iowa, Kansas, Kentucky, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, New York, North Dakota, Oregon, Texas, Utah, Washington, West Virginia and Wyoming.

The reason these states are so important is that’s where the Senate Finance Committee members are from, so it’s most important that they hear from constituents in their home states.

Here’s the information from the action alert.

Small brewers are facing an imminent and extremely serious threat to their businesses. The consequences of remaining silent have the very real potential of reducing your choice of beer and dramatically increasing the price of any beer that you purchase.

The Senate Finance Committee in Washington, DC is currently considering a proposal to increase and equalize the excise tax for alcohol beverages as part of healthcare reform deliberations. This proposal would triple the excise tax for 4.5% ABV beer and impose even higher excise tax rates for higher ABV beers.

If such a proposal becomes reality, there is no question that many small brewery businesses will suffer, some will close and consumers will face higher prices and diminished choice in the marketplace.
The Brewers Association brewery members and leadership have been actively engaged in building the case against an excise tax increase, recently submitting a letter to the Committee outlining our opposition.

We need you to speak out now. Today or tomorrow at the latest.

If your Senators are not members of that committee, ask them to contact their Finance Committee colleagues and express their opposition to this proposal moving forward.

Your ask of them is simple:

Oppose the Tax Increase. Let them know that you oppose, in the strongest possible terms, raising the federal excise tax on beer because of the serious consequences it would have on small brewers and the craft beer they brew. Additional talking points appear below.

Once again: If one of your Senators sits on the Senate Finance Committee (roster of and links to members below), urge them to oppose this proposal in committee deliberations.

If your Senators are not members of that committee, ask them to contact their Finance Committee colleagues and express their opposition to this proposal moving forward.

Take Action: Call and/or email your Senators’ Washington or district offices and make your personal case against this massive excise tax increase.

*

DEMOCRATSREPUBLICANS MAX BAUCUS, MT
JOHN D. ROCKEFELLER IV, WV
KENT CONRAD, ND
JEFF BINGAMAN, NM
JOHN F. KERRY, MA
BLANCHE L. LINCOLN, AR
RON WYDEN, OR
CHARLES E. SCHUMER, NY
DEBBIE STABENOW, MI
MARIA CANTWELL, WA
BILL NELSON, FL
ROBERT MENENDEZ, NJ
THOMAS CARPER, DE
CHUCK GRASSLEY, IA
ORRIN G. HATCH, UT
OLYMPIA J. SNOWE, ME
JON KYL, AZ
JIM BUNNING, KY
MIKE CRAPO, ID
PAT ROBERTS, KS
JOHN ENSIGN, NV
MIKE ENZI, WY
JOHN CORNYN, TX

Arkador · 06-08-2009, 05:05 PM

ISSUES OF IMPORTANCE TO SMALL BREWERS — EXCISE TAXES

Small brewers are small Main street businesses, typically employing 10 to 50 employees.

Small brewers represent only 4% of the entire U.S. beer market by volume, with 95% of them being very small businesses (producing 15,000 barrels or less per year).

We strongly oppose proposals to increase the excise tax on beer.

Proposals to increase and equalize the tax among all types of alcohol will tax small brewers at the highest rates because their specialty, gourmet and innovative beers typically have higher alcohol contents.
Brewers already pay a disproportionately higher share of taxes compared with other products – federal, state and local taxes represent over 40% of the retail price for beer while the same taxes equal nearly 24% of the price for all other purchases.

Higher taxes will worsen the economic recession – resulting in less competitive products, reduced sales and revenues, lost jobs and, for some small brewers, business closures.

$1 per case excise tax increase will typically cost the consumer at least $1.69 due to successive mark-ups as the case moves from brewer to wholesaler to retailer.
Many small brewers are struggling to deal with the consequences of the 2008 spike in ingredient and operational costs.

If you want some background on what’s going on with this, here’s where it started with a Senate Finance Committee roundtable in mid-May which then escalated to a written proposal on May 20. This increase is in addition to state excise taxes that breweries have to pay. There’s also additional information at Don’t Tax Our Beer and the Brewers Association’s Excise Tax Resources page.

If you care about the beer you drink and the many small breweries that make it, please take a few minutes out of your day to help keep it affordable and also keep some of them from possibly going out of business. Please reach out to your elected official in the U.S. Senate. They’re supposed to work for you, after all, let them know how you feel.

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More...

TomInMaine · 06-08-2009, 05:23 PM

I Did my part just emails and called Senator Snowe (R) Maine she is usually pretty business friendly I told her staffer of my concern, and she will get the message today. I also emailed her with my concern. She is on the finance committee. let hope she and all the others get the message.

**AZ_IPA** · 06-08-2009, 05:28 PM

I wrote my Senator this morning as well....

I hope Kyl listens to us.

**olllllo** · 06-08-2009, 05:30 PM

Quote:

Originally Posted by AZ_IPA

I wrote my Senator this morning as well....

I hope Kyl listens to us.

He will, or at least his office will. Got a 10 minute call from Jim Swift of Kyl's office. He says that Kyl will oppose the tax. Send in a letter anyways. Let's prime the pump for any other beer issues.