There’s hub-bub all over the Interwebs this week about the very real possibility of Samuel Adams (Boston Beer Company) losing their small brewing status, thereby subjecting them to higher excise taxes along with the nation’s macrobreweries. The issue is real, and it is a problem, but thankfully there are bills in the Senate and House that will hopefully pass with aggressive campaigning. There is H.R. 4278 (which I am, personally, trying to get Rep. Heath Shuler to co-sponsor, so far with no response) and S. 3339 being backed by Sen. John Kerry (MA) and Sen. Mike Crapo (ID). While it’s more important for breweries and brewery representatives to write in support of these bills, it can’t hurt for we, the consumers, in BeerCity, USA to send off letters of solidarity with Asheville’s regional breweries that pump a lot of money back into our local economy.
The Brewers Association defines a small brewer as producing less than 2 millions barrels per year. Anything over that is a macrobrewery status. These laws haven’t been overhauled since 1976, way before the craft beer revolution even started. As Samuel Adams approaches the 2 million barrel mark (projected for 2012), it’s high time we ALL pay attention to this matter. Samuel Adams may be the first to hit this landmark and they certainly they won’t be the last. Other small brewers with high-growth potential will also likely have to deal with this issue sooner than later, especially with craft beer sales increasing and macro sales decreasing. Understand that craft beer still only makes up approximately 8% of total beer sales in the country, and while that number seems small, it is exactly the reason for a need to overhaul this bill.
My personal issue with this is semantics. Samuel Adams will always be a craft brewer to me. While it’s just my humble opinion (and one I know does not match up to even the Brewers Association’s terms), I use the terms micro- and macro- to refer to size, i.e. production/barrel output. I always refer to craft beer as an art, i.e. hand-crafted ales using no adjunct fillers, made by real people who have a passion for beer. Jim Koch and Samuel Adams helped to single-handedly revive craft beer back in 1984. (The photo above is Koch way back when with his first cases of Samuel Adams. Photo: Boston Beer Co.) To call them anything other than craft is an insult to industry.
You can help by writing Rep. Heath Shuler. Personally, I’m frustrated that his office has not even acknowledged my letter in over three weeks when I tagged it “response requested.” I will march down to his College Street office if need be. Perhaps if you, my fellow beer drinkers, would inundate him with the same, we can get some representation from North Carolina’s most vibrant beer city and encourage him to co-sponsor H.R. 4278. Will you help?
The Brewers Association has a great resource guide from which you can pull information (and remember to add personal touches). A copy of my letter is below:
My name is Julie Atallah and I am the co-owner, with my husband, of a small downtown Asheville business called Bruisin’ Ales. We are a beer-only retail store, specializing in hand-crafted brews from around the country and specifically Asheville and Western North Carolina. Our store has been rated the number three beer retailer in the world by RateBeer Best 2010; named one of the “Top 10 Bottle Shops in the U.S.” by Imbibe Magazine; and voted “Best Beer Store” in the MountainXPress “Best of WNC” reader poll. More recently, Asheville breweries and the local beer scene was showcased in a travel feature by Imbibe Magazine.
I am writing you today to draw your attention to H.R. 4278, sponsored by Representatives Richard Neal and Kevin Brady, both members of the House Ways & Means Committee. H.R. 4278 was introduced in December, 2009. (Senators John Kerry and Mike Crapo introduced S. 3339 in May, 2010.) The legislation will reduce excise tax for the nation’s small breweries from $7 to $3.50 per barrel for the first 60,000 barrels of beer produced. It will also provide a tax reduction from the current rate of $18 per barrel to a reduced rate of $16 for the first 2 million barrels for small brewers that produce less than 6 million barrels. In summary, the bill gives a small excise tax break to the nation’s smallest brewers which employ people in communities throughout America.
The small brewer tax rate was established in 1976 and has never been updated. Since then, the annual production of America’s largest brewery increased from about 45 million to 107 million barrels. The ceiling defining small breweries is 2 million barrels. Along with the Brewers Association, we support raising this ceiling to 6 million barrels to more accurately reflect the intent of the original differentiation between large and small brewers in the U.S.
Consumer demand for the bold and innovative beers brewed by America’s small brewers has grown significantly in recent years. But beer produced by small, independent brewers still represents less than 5% of the beer sold nationwide. As small businesses, small brewers face many economic challenges. Because of differences in economies of scale, small brewers have higher costs for production, raw materials, packaging and market entry than larger, well-established, multi-national competitors. Furthermore, efforts to increase state taxes for all brewers continue to threaten jobs and their economic stability.
This legislation would help create jobs for America’s 1,500+ small breweries. Nationally, small and independent brewers employ nearly 100,000 full- and part-time employees and generate more than $3 billion in wages and benefits and pay more than $2.3 billion in business, personal and consumption taxes. These brewers are vital, small businesses in communities across the country, typically employing 10 to 50 employees. This is especially good for Asheville, an area where many jobs depend on tourism and seasonal travel. These jobs could be created locally and year-round.
A few reasons why this bill is important locally:
- Local craft beer is a vital part of Asheville culture.
- Asheville now has nine breweries in a population of approximately 78,000. We have more breweries per capita than any other city in the nation, both large and small. There are even more state and regional craft breweries that contribute to the local economy.
- Local breweries pump a lot of money into the local economy while supporting many community organizations, events and non-profits.
- In 2009, Asheville brewers created the Asheville Brewers Alliance to organize the voice of the industry here in Western North Carolina.
- Asheville was recently voted “BeerCity, USA” in a poll by Charlie Papazian, president of the Brewers Association. The poll was held online nationwide and we beat beer meccas like Portland, Oregon. While just for fun, the poll clearly shows the passion our community has for its local breweries and their products. This is the second year in a row that Asheville has tied or won the poll. As a result, we have a new spring beer festival called Beer City Festival on Roger McGuire Green this Saturday, June 5.
- The number of beer travelers coming to Asheville is staggering. Craft beer provides entertainment and enjoyment to many. Tourists are coming to our city for reasons other than the outdoors and usual tourist sites.
I am providing you with a link to the Harvard Study on the Economic Impact of H.R. 4278. http://www.brewersassociation.org/attachments/0000/1942/HR_4278_Economic_Study_-_Final.pdf
Can I count on you, Representative Shuler, to consider supporting and co-sponsoring H.R. 4278 from BeerCity, USA?
Thank you for your time and consideration of this bill. I am available to discuss this with you any time at your Asheville office with members of the Asheville Brewers Alliance. Of course, you are always welcome to make a stop at Bruisin’ Ales.
Yours, in locally-produced craft beer,
66 Broadway Street
Asheville, NC 28801