Sam Adams to lose craft beer status

[weirdboy]

Boston Beer Company is a pretty strong supporter of homebrewing...you don't see BMC sponsoring Longshot competitions.

 

[flyingwmelon]

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.

 

[olllllo]

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.

 

[r_flagg]

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.

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]

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.

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

 

[olllllo]

Does anyone feel like less a homebrewer because they brew 200 gallons while those in single adult households can only legally brew 100?

 

[beerchemist]

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.

You know what else they have in common?



They both produce light beers!

 

[babalu87]

Does anyone feel like less a homebrewer because they brew 200 gallons while those in single adult households can only legally brew 100?

Two adults but I brew 200 on the nose every year

 

[dukerutledge]

Lobbying Senetors to change laws when it only benefits them, is a very BMC thing to do.

Next thing they are going to do is contribute money to the Partnership for a Drug-Free America.

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]

Sad state of affairs when homebrewers are putting down Jim Koch and his company.

Some of you really need to look in the mirror

 

[curlyfat]

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!

 

[JNye]

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.

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.

 

[weirdboy]

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:

The federal government and all of the states levy excise taxes on beer and hard cider. For brewers producing no more than 2.0 million barrels of malt beverages per calendar year, the federal excise tax is $7.00 per barrel on the first 60,000 barrels of malt beverages removed for consumption or sale during a calendar year, and $18.00 per barrel for each barrel in excess of 60,000. For brewers producing more than 2.0 million barrels of malt beverages for domestic consumption in a calendar year, the federal excise tax is $18.00 per barrel for all barrels produced.

Prior to 2009, the Company was able to take advantage of the reduced tax on the first 60,000 barrels of its malt beverages produced; however, in 2009 the Company’s total production of malt beverages under its licenses exceeded 2.0 million barrels and it was not able to take advantage of this reduced tax benefit. Individual states also impose excise taxes on alcoholic beverages in varying amounts, which have also been subject to change. The determination of who is responsible, the Company or the distributor, to bear the liability for these taxes varies by state. Twisted Tea® is classified as a malt beverage for federal excise tax purposes. In some states, Twisted Tea® may be taxed at a higher rate depending on the exact brewing process. In addition, the federal government and each of the states levy taxes on hard cider. The federal excise tax rate on qualifying hard cider is $7.00 per barrel.

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]

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.

 

[Strave19]

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

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]

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.

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.)

 

[curlyfat]

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]

Subscribed.

 

[Laughing_Gnome_Invisible]

Does anyone feel like less a homebrewer because they brew 200 gallons while those in single adult households can only legally brew 100?

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]

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.

 

[dukerutledge]

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.

All the more reason in my mind for tax breaks. Let the big multinationals eat it.

 

[babalu87]

All the more reason in my mind for tax breaks. Let the big multinationals eat it.

I like this

 

[hank1072]

Although SA does produce more than a smaller microbrewery, taxing them will only lead them to pass the cost on to the customers and intern start finding ways to make cheeper product. Look a Leinenkugel.

 

[MR2Aaron]

It is, but now that I am thinking about it, what other Brewery would this increase effect? If it is just a tax dodge by SA, I don't think I could support it.

Sierra Nevada, maybe? I've no idea how much beer they move in a year, but I bet it's a lot more than you'd think, given how ubiquitous it seems to be, for a craft brewery.

Edit: Maybe Shiner, too?

 

[BendBrewer]

Although SA does produce more than a smaller microbrewery, taxing them will only lead them to pass the cost on to the customers and intern start finding ways to make cheeper product. Look a Leinenkugel.

They are already taxed. Do you think they are going to lower their prices if their tax burden is decreased? Yeah, me neither.

But let's face it, there are much better beers out there. They can do whatever they want. I am still not buying their beer.

 

[jwatkins56550]

I don't think we should use the governments definition of craft brewing. And in my opinion, Sam Adams is still a craft brewery.

Too many people to quote that I agree with...

 

[Laughing_Gnome_Invisible]

I don't think we should use the governments definition of craft brewing. And in my opinion, Sam Adams if still a craft brewery.

Too many people to quote that I agree with...

I don't think the Gov. should even HAVE a definition of craft brewing.

 

[SumnerH]

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.

Biggest American-owned brewer is kind of an odd title, actually.

Of US-owned companies, Pabst sells the most beer. Yuengling brews the most beer.

But Pabst is only barely considered a brewery; they don't actually brew anything, instead contracting that work out. If you throw them out of the mix, Boston Beer Company sells the most beer.

And that's legit--of actually "breweries" (you know, places that brew beer?) BBC sells the highest volume.

But because they still contract out a small portion of their brewing, they actually don't brew quite as much beer as Yuengling does.


(The argument will be moot soon; Yuengling's growing much faster than BBC and is expected to outstrip them in sales as well as brewing volume either this year or next.)

 

[GilaMinumBeer]

I don't get the logic in this room.

Tax breaks for them mean cheaper beer for us. Regardless of what label the beer carries. Even Budweisers cost is 300% higher than what is was when I was a kid and yet, they are brewing on the same gear, with the same suppliers.

And the persistent bashing citing "quality" as the dteracter for BMC is, well, naive. I gurantee you there is more quality controls in place at Budweiser than at SN and BBC combined. The only flaw in that product is that YOU don;t like it. Not that they make it poorly.

 

[BendBrewer]

Tax breaks for them mean cheaper beer for us.

I disagree Gila. True if their taxes are raised they will raise their prices but they aren't going to be lowering them no matter what.

The government is involved to help level the playing field for smaller businesses and Publicly traded companies like BBC don't fall into that category.