Interesting piece on the impending decisions to be made in relation to Federal excise taxation for beer in the US over at MSN Money today:
…The Brewer’s Employment and Excise Relief (BEER) Act, which is promoted by Washington-based beer industry group The Beer Institute, is expected to be introduced later this year and would reduce excise taxes on beer produced by brewers large and small. Past versions of the bill recommended cutting the tax from $18 per barrel to $9 for large brewers while also cutting the tax for small brewers from $7 per barrel to $3.50.
The competing Small Brewer Reinvestment and Expanding Workforce, or Small BREW Act, promoted by craft beer industry group The Brewers Association would cut the federal excise tax on beer from $7 a barrel to $3.50, which is placed on a small brewer’s first 60,000 barrels produced per year. After that initial 60,000 barrels, small brewers must pay $18 per barrel, which would be lowered to $16 under the bill. More importantly, it would expand the tax code definition for a “small brewer” from one that produces 2 million barrels or less to one that produces 6 million or less.
See, this is how relationships end. As the article describes, brewers like Boston Beer Co and Sierra Nevada are active members of both the Beer Institute and the Brewers Association which are lobbying for distinct and conflicting tax regimes. Not sure that this in itself is enough to create “a rift in the beer industry that could signal last call for the ‘craft’ title” as the author suggests but the implications are interesting. First, the government has to decide the matter one way or another. There cannot be two systems of the one excise tax. Second, the actual small craft brewers who make up the majority of the Brewers Association may soon have to decide whether being led by big craft brewers who look a lot like big macro brewers makes any sense. Either way, it won’t be controlled by big craft.
It would be comforting to know that this question was actually being discussed at the Craft Brewers Conference but the Twitter feed for #CBC13 has all the diversity of first night at summer cult camp. Crazy kids. They just can’t stop marketing – even to each other! One can hope that Congress’s governing leaders will have the sense to reject the idea of including the expansion of 2 to 6 million barrel definition of “small”. It is all fun and stuff but, given the state of the nation’s finances, buying into that sort of belief system isn’t very helpful especially given the clear focus offered by the Beer Institute’s characterization of the implications as “a giveaway to a handful of brewers that each are worth more than a billion dollars.” A billion? That’s a large number.
