SA should not get the same breaks a small-time breweries. They are huge, they are publicly traded, they are mass marketed, and they are lobbying for legislation that will only effect them. It may effect other "craft" breweries in the future, but isnt that the way it should be if a company becomes that huge and is making that much money? Just because their beer doesn't suck as bad as BMC doesn't make them "small time craft". I think its great that they helped to pioneer "craft" brewing, but they are raking in plenty of $$$ now, and they just want to make more. They are making money off the marketability of being "small scale craft beer".....ironically this is "small scale craft beer" that you can find in nearly every grocery store and at every bar in the country... Sorry SA, but you are BMC junior as far as I'm concerned... Time to pay up if you're going to keep chasing the dollar. Good thing I've never been a huge fan or your beer.
Sam Adams to lose craft beer status
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JJL
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The articles I've been reading say barrels.
r_flagg
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While I agree that SA should not get the same break, I do feel that old standards need to be updated. It has been 20-some years since the craft brewery designation was created in the US. Perhaps the whole structure should be revamped where local microbrews pay the least, regional/semi-national breweries like Dogfish Head pay a bit more, and companies like SA pay the most (besides BMC of course). Up the amount of barrels they can produce, because I still don't think that 150,000 barrels a year is on par with BMC, but is still triple the current amount of what is considered a craft brewery.
EDIT: Nevermind, my numbers are wrong. Still, maybe the tier system would be better.
EDIT: Nevermind, my numbers are wrong. Still, maybe the tier system would be better.
r_flagg
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JJL
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This is something I could reasonably get behind. We were discussing earlier in the thread what breweries besides SA would be impacted by the change to the 2MM barrel hurdle. We couldn't come up with any. Nothing even close. Although, the current law appears to protect truly small craft brewers. The first hurdle in the tax code is 60k barrels. The new bill actually proposes a reduction in the tax from $7 to $3.50 per barrel for the first 60k barrels produced. So, in effect they are taking some steps to revamp the system.
Really though, if they are going to truly revamp the system, there needs to be a tier somewhere between 60k and 2MM barrels, and possibly something below 60k, like 5k or 10k. You could increase the 2MM barrel mark to 25MM and you would still only be impacting SA.
shanecb
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I don't see why we have to use the term "craft beer" in the sense that we are. Regardless of the size of Sam Adams I'd still call it craft beer, but not a "microbrewery". I think microbrewery/macrobrewery should be the size designations, with craft brewery not having anything to do with size. I don't see any reason there can't be a very large, very successful craft brewery. Craft to me is more about quality, attention, process, etc., and not about amount of output.
motobrewer
I'm no atheist scientist, but...
goose island is publicly traded. so is kona.
Why is Sam Adams opposed to being in the same category as BMC? I seems to me that they could spin that just as well as they could spin the "We're just a little, harmless, craft brewery." bit. I say lump them with BMC and let them bring up the perceived quality of American Beer.
As for the taxes, if they can lower them, then good for SA. Also good for BMC though. That 2M barrel ceiling has been giving SA a small advantage over BMC for a while now. If they have to pay the additional tax, we'll see how much momentum the American demand for better beer really has.
As for the taxes, if they can lower them, then good for SA. Also good for BMC though. That 2M barrel ceiling has been giving SA a small advantage over BMC for a while now. If they have to pay the additional tax, we'll see how much momentum the American demand for better beer really has.
a10t2
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Well said, shanecb. Couldn't agree more.
Actually Yuengling produces 2 million: http://www.yuengling.com/n_yuengling_180_anniversary.htm
BBC currently produces ~1.4 million, so they won't be affected for several years.
Actually Yuengling produces 2 million: http://www.yuengling.com/n_yuengling_180_anniversary.htm
BBC currently produces ~1.4 million, so they won't be affected for several years.
beerchemist
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yeah, Yuengling, which is still family-owned, is just around the 2-million barrel mark:
http://www.yuengling.com/n_yuengling_180_anniversary.htm
http://www.yuengling.com/n_yuengling_180_anniversary.htm
Exactly what I was attempting to get at. This whole thing seems like a good deal for craft beer. Any non-BMC brewery needs some help if they want to compete with the big guys.
a10t2
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AB pays about $17.99 a barrel in federal taxes, and BBC pays about $17.51. It isn't nothing, but I doubt it makes a difference to their bottom line. Hence the desire for a reduction in taxes between 60,000 and 2,000,000 barrels.
edit: It's actually a difference of 0.3% in their FY2009 profits.
Some interesting replies.
It seems everyone is in agreement that SA is no longer a 'craft' brewery. Still, it doesn't seem fair to hold them to the same standards as AB. Maybe a sliding scale based on the number of barrels produced a year?
For example, I would hate to see Sweetwater (currently 49,000 bpy) get penalized when they quadruple their output based solely because a lot more people got tired of drinking crap.
Discuss.
It seems everyone is in agreement that SA is no longer a 'craft' brewery. Still, it doesn't seem fair to hold them to the same standards as AB. Maybe a sliding scale based on the number of barrels produced a year?
For example, I would hate to see Sweetwater (currently 49,000 bpy) get penalized when they quadruple their output based solely because a lot more people got tired of drinking crap.
Discuss.
r_flagg
Well-Known Member
Absolutely. These aren't the good old days. There are tons of breweries out there of all different sizes and a reduction by 50% would seriously help the little guys out. Does anyone have the figures on Anheuser-Busch's annual production? I mean, it must be nearing the billions right? More barrels than OPEC? There's no way SA could ever be in that league, so why not give them their own tier to stretch out in?
SkiSoloII
Splitting the beer atom since 1996
Publically traded or not, larger than many "craft-brewers" or not, SA still has the mindset of the smaller brewer.
How many people remember the hop shortage of 2008? SA had extra, and sold them to the lowly brewer class at reasonable prices. I am in their debt.
Dave
How many people remember the hop shortage of 2008? SA had extra, and sold them to the lowly brewer class at reasonable prices. I am in their debt.
Dave
jamest22
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I agree. This is exactly what I was getting at.
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In my opinion "craft" shouldn't have a legal definition.
It brings up the point why "craft" was even brought into the beer world. It's my understanding that it happened because some of these breweries got bigger than the defined "micro brewery" but still wanted a term that they could use to set them apart from the giant corps making primarily light American lagers.
It brings up the point why "craft" was even brought into the beer world. It's my understanding that it happened because some of these breweries got bigger than the defined "micro brewery" but still wanted a term that they could use to set them apart from the giant corps making primarily light American lagers.
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Holycrepe
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I have had a negative view of SA for along time, questionable marketing back in the 90's, IIRC they got kicked out of the GABF for a couple of years due to some of their claims on winning...
They also made a big deal out of freshness, but in my area you could routinely get SA beers past expiration at blowout prices. this was even after the commercials of them claiming to destroy all the old beer. It wasnt just one store or one distributor doing these blowouts, and when i personally talked to SA regional manager about it, they basically told me I had to be mistaken, as they didnt allow that, 6 months later, the practice was still going on in my area. I loved getting 22 oz SA beers for 99 cents, but it showed me the hypocrisy of marketing that SA liked to follow.
but since other beers began to emerge, i havnt had an SA in years.
They also made a big deal out of freshness, but in my area you could routinely get SA beers past expiration at blowout prices. this was even after the commercials of them claiming to destroy all the old beer. It wasnt just one store or one distributor doing these blowouts, and when i personally talked to SA regional manager about it, they basically told me I had to be mistaken, as they didnt allow that, 6 months later, the practice was still going on in my area. I loved getting 22 oz SA beers for 99 cents, but it showed me the hypocrisy of marketing that SA liked to follow.
but since other beers began to emerge, i havnt had an SA in years.
Re-read the replies. Not everyone.
To all BBC haters:
1) BA is a trade organization. Back in the day they set up some definitions to define who they were and some goals to define where they wanted to be. That way they could exert some political pressure (among other things) on legislative bodies to help them grow. Lobbies and legislative efforts are not exclusively used by AB, in fact the AHA has a lobby tio protect your damn rights as a home brewers, so get off that high horse.
2) The BA used the existing excise tax designations to exclude the largest 3 breweries. They used "independently owned" to stave off big 3 buy outs from diluting their trad organization.
3) The entire point of the BA is to GROW. To get big! To have a larger marketshare for craft beer. If you kick out members that make craft beer once they are successful is completely insane.
4) One of BA's stated goals is to obtain 10% marketshare. If you kick out BBC, the BA loses about 20% of it's barrelage to about 3.5% marketshare plus one of it's most prolific spokesmen and champion. If you dis' Jim Koch, I will fight you!
If you've had just a handful of BBC's beers and you are a homebrewer, then I will tell you that Jim has probably spent more money on you then you have on them.
I'll say it again.
If you've had just a handful of BBC's beers and you are a homebrewer, then I will tell you that Jim has probably spent more money on you then you have on them.
BBC is craft beer, Craft beer isn't just beers you like.
Boston Beer Company is a pretty strong supporter of homebrewing...you don't see BMC sponsoring Longshot competitions.
flyingwmelon
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Just my thought but if SA wants to be a craft brewer and not have to pay taxes outside of the current level then they need to scale back on production. If they like the revenew that their output provides them then they can pay the taxes. If I went into business making widgets then I would expect to heve to pay tax on the units I make. If there was a tax break for making under 1k widgets and it was benificial for me to make less then that I would but in the future my business couldproduce/sell more then that amount and I would make more of a profit from doing so I would be more then happy to pay the taxes. Actually I think that there should not be any difference in what BMC pay then what any craft/micro/macro brewery pays. Equal taxation should be afforded to all players in that field. Just my thoughts probably not popular but hey they are kinda like a**holes everybody has one and we all think the other guys stinks.
This thread is confusing two issues.
The two tier excise schedule already exists.
Both the BA and BBC are proposing changes to it in favor of relatively smaller beer producers (compared to AB, SAB, etc).
BBC's craft status is a matter for the BA to settle as to whether they are in the BA or out. Koch sits on that board and has been effective at kicking the can down the road but will have to gain allies w/in BA to remain given future inevitable growth.
The two tier excise schedule already exists.
Both the BA and BBC are proposing changes to it in favor of relatively smaller beer producers (compared to AB, SAB, etc).
BBC's craft status is a matter for the BA to settle as to whether they are in the BA or out. Koch sits on that board and has been effective at kicking the can down the road but will have to gain allies w/in BA to remain given future inevitable growth.
r_flagg
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I see, but what are the figures on this? What is the difference in production between BBC's highest year and InBev's lowest year? The discrepancy still must be huge! There has to be some room for growth without BBC being kicked out...
babalu87
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What are your thoughts on Sierra Nevada?
They will be approaching that status soon as well.
I'll admit, you lost me at doesnt suck as bad as BMC though, they make solid beers.
Do they have an over the top IPA........... no, I guess if thats all someone is looking for then they should brew one up or grab a Stone.
They are still TINY compared to BMC
TINY
Does anyone feel like less a homebrewer because they brew 200 gallons while those in single adult households can only legally brew 100?
beerchemist
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babalu87
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dukerutledge
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I'm surprised no one has responded to this yet.
Are you saying that good business practices make bad beer? Does this mean that all "good" breweries should hang on by a shoe string?
Sounds to me like Jim Koch is trying to defend his bottom line without cutting costs in quality. No where has it said that they will lobby for a change in taxes and cut costs in quality ingredients. Plus, the proposed bill is a boon for smaller breweries too, in fact it would cut their taxes in half! Sounds like Koch is trying to keep his business stable and drag everyone else along with him.
Koch is not the devil, he's a good business man and a all around good guy.
babalu87
Well-Known Member
Sad state of affairs when homebrewers are putting down Jim Koch and his company.
Some of you really need to look in the mirror
Some of you really need to look in the mirror
I just read this whole thread for the first time. :cross: Here's my take, for what it's worth:
I don't generally drink SA, but have no problem with them, just not my favorite. I think they are "craft", especially compared to BMC, but who cares what they're called by the Government?
For that matter, who says BMC aren't brewing "craft". Mass producing a consistent product void of ANY defects is certainly a talent. I don't drink it, but that's my choice as a consumer. I certainly don't think my opinion should determine the "quality" of beer. After all, does a microbrewery ever win the "Light American Lager" award at GABF?
I run a business, and if I thought I could do it, I would totally lobby to keep a lower tax level! It's even a little honorable that he's supporting a bill that would help the really "little" guy too! Who doesn't want to pay lower taxes? And there's nothing illegal about supporting a bill.
I'm going to go drink a homebrew and not worry about Jim's business practices. I respect him as a brewer, and could not care less about how he goes about his bottom line (legally, anyway).
All said IMHO!
I don't generally drink SA, but have no problem with them, just not my favorite. I think they are "craft", especially compared to BMC, but who cares what they're called by the Government?
For that matter, who says BMC aren't brewing "craft". Mass producing a consistent product void of ANY defects is certainly a talent. I don't drink it, but that's my choice as a consumer. I certainly don't think my opinion should determine the "quality" of beer. After all, does a microbrewery ever win the "Light American Lager" award at GABF?
I run a business, and if I thought I could do it, I would totally lobby to keep a lower tax level! It's even a little honorable that he's supporting a bill that would help the really "little" guy too! Who doesn't want to pay lower taxes? And there's nothing illegal about supporting a bill.
I'm going to go drink a homebrew and not worry about Jim's business practices. I respect him as a brewer, and could not care less about how he goes about his bottom line (legally, anyway).
All said IMHO!
JNye
Well-Known Member
BINGO! Can we clarify some things?
#1 The tax break for the first 60K barrels DOES NOT currently exist correct?
if that is true then yes, He's trying to help all small brewers.
Jim Koch is still well below the current "craft" status of 2 million right? @ 600,000. He is trying to UPDATE a designation(craft) that was adopted in the 80s! Population has grown right? national beer sales have went up right?...why not up the minimum too then. Plus IF you produce 6 mil you only get the break on 1% of the beer you produce anyways! This law has the largest effect on SMALL breweries the way I undstand it.
Thanks Jim Koch and BBC for spending the money on lobbyists and the giving hombrewers and small brewers a VOICE in Washington.
OK first off let us correct some misconceptions presented in your reply:
1. The 60,000 barrel provision is already in the tax code
2. BBC produced more than 2 million barrels last year.
Both 1 & 2 are according to BBC's most recent SEC filings in their last annual report:
So, to say that Jim Koch is trying to change the tax code out of the goodness of his heart is probably disingenuous, considering BBC had to pay $18/barrel taxes on the same beer they were previously paying $7/barrel for. The difference for those first 60k barrels adds up to $660k in taxes.
JNye
Well-Known Member
Okay, I was under the impression that that tax break did not exist, thanks for clarifying. I am still in favor of updating the break. Things have changed since the 80s right, BMC has grown, so have the craft brewers.
The "doesnt suck as bad as BMC" comment was a bit out of line, my apologies...my last post was a bit "rant-esque"... A lot of people think they (SA) brew great beer, I have just not enjoyed any of them a whole lot. I like Sierra Nevada brews for the most part, but my feelings are the same. If a company is hugely successful and is brewing that quantity, and making a proportional amount of money off of it then they should pay the higher taxes on it. I dont care if BMC does it cheaper, I dont see that as an argument... They should not be that big if they cannot be supported by the consumer at an increased price. I realize that they are a tiny fraction of BMC, but my point is the same.
Its great if a company can become huge, accessible, and still retain their "craft" or "micro" roots which I think SA and SN probably have for the most part (though I think SN is pretty small in comparison). I'm not chasing an over the top IPA (though I like IPA's
) ...besides if I were to grab one it would not be a stone 
Edit: I think I misunderstood some of this... the above posts helped.
a10t2
Well-Known Member
As someone who's written a business plan for a brewpub, let me just say that halving the tax rate for small brewers is HUGE. Substantially more impact on their bottom line than what BBC would get out of the bill. (Like I said, the transition to 2M+ takes about 0.3% out of BBC's profits.)
Weirdboy, some excellent clarifications. Thank you. Still, I would do the same in their shoes. $660k off the bottom line is significant, and generally if taxes go up, so do prices! Although rarely the other direction, at least they wouldn't go up. If, of course, you drink SA in the first place.
PTisch
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Laughing_Gnome_Invisible
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Good point. I have nothing against SA. I enjoy some of their beer. I appreciate their commitment to quality and what they have done for the beer market. It's a business though, you should play by the rules, and try to get them changed if it suits your interests. Anyone would be a fool not to.
If, as the ads say, SA has 0.9% of the American market though, I think he might stop trying to protect his small business image. 0.9% is fooking huge! I think it's time to stop pretending to be the little guy, be proud of what he has accomplished, and let his beer speak for itself as far as what is "craft" or not.
bleak
Well-Known Member
I don't think this has been pointed out in this thread yet, nor is it necessarily apropos to the topic, but Boston Beer Company is now the largest wholly US-owned brewery. Anheuser-Busch merged with InBev, a Belgium concern, and MillerCoors is a joint venture between several US, Canadian, UK, and South African interests.
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