11 March, 2011

Beer: Excise Taxes, Expansion, and Boycotts





The U.S. Senate will be mulling over a bill to reduce the beer excise tax for craft brewers.

Senators Mike Crapo (R-Idaho) and John Kerry (D-Massachusetts) today introduced legislation to reduce the beer excise tax for America’s small brewers.

Currently, a small brewer that produces less than two million barrels of beer per year is eligible to pay $7.00 per barrel on the first 60,000 barrels produced each year. This legislation will reduce this rate to $3.50 per barrel, giving our nation’s smallest brewers approximately $19.9 million per year to expand and generate jobs. This change helps approximately 1,525 breweries nationwide.

Currently, once production exceeds 60,000 barrels, a small brewer must pay the same $18 per barrel excise tax rate that the largest brewer pays while producing more than 100 million barrels. This legislation will lower the tax rate to $16 per barrel on beer production above 60,000 barrels, up to two million barrels, providing small brewers with an additional $27.1 million per year that can be used to support significant long-term investments and create jobs by growing their businesses on a regional or national scale.


For now this is still just a bill but I can't imagine that the idea of lowering taxes would have a problem in the House. If it passes, would beer prices go down? I mean, when WI state Rep. Terese Burceau tried to raise the state beer excise tax, small brewers generally came out against it and, from my recollections, said that the cost increase would be passed onto consumers. Would the reverse hold as well?

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Canning is the latest trend in craft beer and I now read that Sprecher is going that route in an interview with Jeff Hamilton, the company's president. I'm pretty agnostic on the issue at this point. Here's an overview of the benefits and problems of each packaging method. I only hope that craft brewers don't devolve into a stupid marketing war where they try to pawn off cans with mouths wider than normal as a reason to buy their product.
Other news is that they've increased lagering capacity and now offer beer-flavored potato chips. Does any other Wisconsin brewery sell food products made with their beer? Is there a New Glarus mustard, for instance? Also interesting was that the brewery's founder, Randy Sprecher, now lives in California part-time.

Are any of their seasonal sodas available here in Madison?

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With all the protesting the past few weeks and now calls for boycotts of companies that contributed to Scott Walker's campaigns, I found this bit interesting.

The Midwest Beer Collective's 18 February news roundup had positive comments about the protesters. A commenter named "Jim Klisch" left the following comment:

Where is the money coming from to pay the state workers? It’s not like they are hurting. They will keep their jobs which is much better then[sic] the private sector. Stick to beer and leave your sophomoric politics out or yur blog.

Jim Klisch founded the Lakefront Brewery in Milwaukee but I have no idea if it was he that actually left the comment. For fun, I looked to see if he had donated any money to Walker but found no evidence of that.

So, if you're a craft beer drinker and want to engage in boycotts of Walker supporters, would you consider boycotting Lakefront if you knew that this comment was from the company's founder?

And lastly, a big fuck you to the author of the member of the Midwest Beer Collective who wrote the new roundup mentioned above for writing "seriously, we get it Cap Brewery, you don’t like to make flavorful beer, but cans?"

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