Beer tax increase idea is wrong-headed

With all due respect to Michael Jacobsen and George Hacker of the Center for Science in the Public Interest, their proposal to increase the federal excise tax on beer would devastate – if not destroy – the small, independent Main Street American breweries that have developed all across our nation during the last 35 years and which have created thousands and thousands of jobs for American workers.
 
The Brewers Association, the national trade group for America’s small brewers, now has more than 1,600 brewery members, which includes brew pubs and micro-breweries. Of this number, 1,484 brew less than 15,000 barrels of beer annually, which under current law means that these breweries pay $7 in federal excise tax on every single barrel of beer they brew. The largest brewery in the United States, Anheuser-Busch InBev brews close to 100 million barrels annually.

Do we really think that these small American brewers will be able to compete effectively  (and grow and hire more workers) if the federal excise tax they pay increases from $7 per barrel to, say, $50 per barrel, as would be likely under the Jacobsen-Hacker proposal? A few might. But I guarantee you, most would not. In fact, many would be forced to shutter their breweries altogether and lay off their workers. Meanwhile, the large multinational brewers – AB InBev and MillerCoors – likely would be strengthened by such a change through reduction in competition.
 
The amount of revenue raised from small brewers by the Jacobsen-Hacker proposal is simply not justified by the economic harm such a proposal would cause.
 
Thirty-five years ago, there were approximately 40 small brewers in the United States. Today, there are more than 2,000 small and independent breweries which employ more than 100,000 full- and part-time workers and generate more than $3 billion in wages and benefits annually.
 
The good news is that small, craft brewers are continuing to grow year over year. Many are operating at peak production. Others have chosen to expand to meet consumer demand for their product.
 
The last thing our federal policymakers should do is act in a manner that would deter or harm this vibrant, expanding American industry. Rather, we should ask them to join 44 U.S. Senators and 174 House members in supporting, respectively, S. 534 and H.R. 1236, which would recalibrate and reduce the excise tax on small brewers.
 
These Senate and House members recognize that small, Main Street brewers make products that millions of Americans enjoy and use responsibly, and that they employ thousands of American workers. The right federal policies will help small brewers compete and thrive and hire more workers. The wrong policies would wreak havoc on this dynamic industry.
 
Bob Pease
Chief Operating Officer

Brewers Association

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