San Francisco Wants To Add Alcohol Fee To Every Drink

They tried this last year, unsuccessfully, but the neo-prohibitionists are nothing if not incessant. So it’s now been introduced again. City of San Francisco Supervisor John Avalos has introduced the “Alcohol Mitigation Fee Ordinance” (AMFO) in an effort to impose a “fee” (which is technically different from a “tax” since that would be illegal) on alcohol sold in the city. They can call it a “fee” or anything they like if that makes it legal and presumably keeps their conscious clear, but a tax is defined as “a compulsory contribution to state revenue, levied by the government on personal income and business profits or added to the cost of some goods, services, and transactions.” [Oxford Dictionary of English.] If it walks and talks like a duck, guess what it is? It’s complete and utter bullshit, not to mince words.

The stated rationale is that the “fee” is meant to cover the so-called harm caused by people who use alcohol by charging a fee to the distributors and retailers who sell it. For support of that idea, they cite studies that are nowhere near impartial. Essentially they just shopped for the studies that said what they wanted, ignored those that contradicted them, and used that to “prove” their case.

If passed, the AMFO would add a fee of $0.076 to every ounce of alcohol sold in San Francisco. So if I understand that correctly, for a 12-oz. bottle of beer that would be an additional 91.2 cents and for a pint another 121.6 cents, or roughly $1.22. And that fee will imposed at the wholesale level, and the distributors will then naturally mark-up the fee, and so will the retailers, meaning in reality the price of a pint will go up at least a dollar and a half, possibly more. The Marin Institute, who’s really behind this fee, is selling this idea as a “nickel-a-drink” because they’ve found that it polls well with consumers who see no problem with an extra nickel. But as is so typical with the Marin Institute, their “nickel-a-drink” propaganda is just another one of their numerous lies.

Earlier versions of the proposed ordinance used the term “ethanol ounce” presumably to equalize the alcohol content in different types of drinks, like spirits and wine which usually have higher alcohol percentages. The latest version appears to have dropped that, meaning that the fee on beer would be proportionally much, much higher than spirits or wine.

Where this whole idea came from is the despicable Marin Institute, an organization as anti-alcohol as one could imagine. They’ve been pushing this “fee” idea and using the rhetoric about “charge for harm,” which may sound good on paper but it’s entirely unfair to ordinary casual drinkers, which constitute the vast majority who drink alcohol. The Marin Institute claims that “Big Alcohol [should be] accountable for the tremendous harm its products cause. Appropriately taxing alcohol in each state and at the federal level will help reduce over-consumption, as well as provide much-needed funds for prevention and health care.” They hardly even say why that should be the case, so sure are they that people will just swallow that idea without thinking about it. But let’s think about it anyway.

Do the products actually cause any harm or do some people abusing the products cause the harm? Obviously, it’s not the alcohol itself, but its misuse that causes any trouble. If those people who abuse alcohol are straining the health and police resources of San Francisco, then the city should charge them. But saying that the alcohol those people abused should foot the bill is prima facie ridiculous. We don’t charge soda companies for all the unhealthy people that result from drinking pop, or red meat, or any other unhealthy foods that make unhealthy people thus placing a greater burden on our health care system. We don’t charge parachute companies or other extreme sports equipment manufacturers for increased use of emergency room facilities that are disproportionally called upon by extreme sports enthusiasts when “accidents” happen. We don’t put a tax on motorcycle purchases even though its more likely that a motorcycle rider will be involved in an accident, and/or that their accident will likely be more serious than if that accident occurred while driving a car, thus placing a greater burden on our healthcare system. I could go on and on. The point is that it’s absurd that alcohol companies should be responsible for any harm that an adult drinking one of their products might cause to himself or someone else. But the neo-prohibitionists keep on making that argument, regardless of how specious it is.

Even assuming their assertion that there is any “harm its products cause,” it’s still not everybody who drinks alcohol. This “fee” punishes everyone who drinks because it raises the price for everybody across the board. That means that the 99% of adults who drink responsibly and don’t place an undue burden on the city’s resources are forced to pay for the 1% that might. And yet the Marin Institute has no problem saying that’s not only fair, but how the world ought to be. According to them, alcohol has to pay for any harm someone who drinks it may cause, but every other product in the world does not. Why? Obviously, it’s not remotely about fairness or even funding healthcare for people who need it. It’s about punishing alcohol manufacturers and consumers who drink it in any way they can think of. They also claim that others states have similar policies in place, as if that makes it right, but then contradict themselves in their press release by stating that if passed, the “San Francisco alcohol mitigation fee will be the nation’s first local ‘charge for alcohol harm’ program, expanding on traditional nuisance and enforcement laws.”

What will this do to San Francisco’s business should it cost 30%+ more for a drink (or at least $1.25 and possibly as much as $2 more per pint) in the city versus the surrounding big cities like Oakland or San Jose? I think they’ll lose convention revenue, not to mention the nighttime and weekend influx from the Bay Area to the city. And tourism could take a hit, too. Not that any of those concerns are remotely part of the Marin Institute’s list of things they care about. How, or why, they cozied up to Supervisor John Avalos remains a mystery. He, at least, should care about what this might do to San Francisco’s economy. And don’t forget this is a test case. If it works and San Francisco does impose this “fee,” you can bet it will be tried in every metropolitan area where the neo-prohibitionists have a “friend” in local government. Alcohol is already the most taxed consumer good on the market today, but the wingnuts at the Marin Institute won’t rest until it’s taxed out of existence entirely. Yesterday, they took one more step closer toward realizing that goal.

Be afraid, be very afraid….


  1. James Wright says

    Big Alcohol. Amazing!

    Personal responsibility aside; why don’t they just take a portion of the taxes they *already* collect and put that in a restricted use fund rather than the general fund? Isn’t that the point of an excise tax anyway? To offset the potentially harmful behavior? Why does that money just go to everyone in the first place?

  2. WTF says

    So the final version of the proposal levies this fee on a per ounce of LIQUID as a opposed to per ounce of ALCOHOL basis? I just want to be sure.

    • says

      That’s the way it appears. Earlier draft version of the proposed ordinance used the phrase “ethanol ounce,” which while not defined seemed to plausibly be a fee on just the alcohol in the drink. The final version’s language has now, and quite suddenly, changed to instead read “at the rate of $.076 per ounce of Alcohol sold.” The change itself is curious and so no one close to this seems sure and until it’s clarified I’m going with the worst possible interpretation since we don’t know. I have a hard time believing that the city’s tax collector is going to do the thousands of calculations necessary to determine actual alcohol content per package for sale.

      It also suggests that the authors don’t really understand what they’re talking about. It’s also levied on the wholesalers, manufacturers and retailers, meaning a further mark-up to consumers is more than likely. It further states the city may only collect the fee once, but makes no provision for who gets stuck paying it between the three eligible entities.

  3. WTF says

    This whole thing is just absurd. I have started to become somewhat inured to this sort of thing in alcohol related legislation, but we still need to try to do something about this. The beer industry should be up in arms against this backdoor tax, which not only unfairly singles out beer to a much higher degree (Using of course your interpretation) but which also is left vague as to who is responsible for it. I feel silly even saying it because to me the sheer absurdity is so self evident that I’m lead to believe that those responsible for this are mentally deficient. It never ceases to amaze me.

  4. zak says

    Reading the Marin Institute’s blog is hilarious. Read their article on Tactical Nuclear Penguin. They say:

    “BrewDog advertises that customers should sip the beer, explaining: “…it should be enjoyed in small servings … [in] the same manner you would enjoy a fine whisky…” The advice rings hollow, however, since you can cork a whiskey bottle for another day, but beer starts to go flat the minute you open it.”

    I’m trying really, really hard not to swear on your blog, Jay.

  5. Steve Shapiro says

    Typical and predictable from the MI. The ED of MI, Bruce Livingston, is very friendly with many of the progressive Supervisors on the Board. Avalos is one of the more progressive supes. Avalos is also chair of the Budget Committee, which makes him very receptive revenue generating measures. I have always found him to be very smart and reasonable, but he needs to hear from the other side. I think he would be receptive to arguments about the disproportionate effect on small brewers.

    Is there any plan being organized to fight this?


  6. Mr. Nuts says

    San Francisco’s nuts. The high parking fees that are charged all the stinkin’ time. The high sales tax. The medical insurance surcharge. And now this crap?

    The booze tastes just as good on the other side of the bridge.

    • says

      Um, how could 7.6 cents times 12 be 9 cents? $.076 is not 7/10th of a cent, but 7.6 cents. Using a calculator, 0.076 times 12 equals 0.912. I’m no math wizard, but I’m pretty sure that .91 is 91 cents, not nine cents.

  7. beerman49 says

    Restaurant/bar/nightclub owners should be jumping out of their shoes to oppose this neo-prohibitionist BS (as should retailers & distributors if the tax/”fee” will hit them) – I posted a longer take on “sin taxes” on Jay’s Sat blog. The sane masses should tell the Marin Institute psychobabblers to get real &/or go to hell !!

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