Moonshot Grounded

moonshot
Ever since the FDA absurdly went after drinks that combine alcohol and caffeine, the future of New Century Brewing’s Moonshot Beer was uncertain. Founded by Rhonda Kallman in 2001, after she left the Boston Beer Co., New Century Brewing created a craft light beer, Edison Light, along with the caffeinated Moonshot, which debuted in 2004. Kallman was at Samuel Adams at the very beginning and helped to get their business off the ground and saw it through its first 16+ years before turning to something more personal.
moonshot
Unfortunately, last year the FDA bowed to the pressure of neo-prohibitionist groups, who persuaded several state attorneys general to petition the FDA to make alcoholic beverages that include caffeine illegal based almost entirely on anecdotal evidence and despite the fact that people have been combining the two on their own for decades, if not centuries. While Moonshot was essentially not one of the products that anti-alcohol groups most objected to, the way in which it was produced pulled her into the list of brands made illegal by the FDA’s misguided ruling.

Thanks to the FDA, at least in part, the Patriot Ledger in Massachusetts is reporting that “Kallman is shutting down New Century Brewing for good this month.” Kallman was also recently featured in Anat Baron’s documentary film Beer Wars to much controversy. Many craft beer purists felt she should not have been part of the film because of the novelty nature of Moonshot, so I suspect many will not mourn the passing of her company or Moonshot itself. And that’s a shame to my mind, in a world in which beer is under near constant attack, I always felt we should have been more charitable to one of our own, even if we didn’t always agree with the choices Kallman made or even like the beer itself. I’ve always been of the opinion there’s plenty of good beers to talk about without running down those we don’t care for, and that the market will ultimately decide which beers succeed and which ones fail. We certainly should have opposed the FDA more strongly than we did as an industry, at least in my opinion. But c’est la vie, it’s water under the dam at this point. So I’ll just wish Rhonda a fond farewell and the best of luck on her next endeavor.

royce-12
Rhonda Kallman with Todd Alström at the Blue Palms Brewhouse in L.A., the evening of the premiere of Beer Wars.

Reading The Beer Meter

meter-dials
I was watching a documentary today about the Library of Congress and they talked about how the library is digitizing their collection, so I took a look at the website and discovered this little gem from 1937. Post-prohibition, apparently our government experimented with different methods for ensuring that breweries paid the correct amount of taxes. The “beer meter” was one such device they came up with, shown below.

beer-meter

The caption below is cut off in the original in the library’s collection, which is why it ends mid-sentence.

And now a beer meter. Washington, D.C., May 1. To aid Uncle Same in collecting the tax on the millions of barrels of beer brewed in this country every year, the National Bureau of Standards has designed a master beer meter for use of the alcohol unit of the Bureau of Internal Revenue, U.S. Treasury. Government inspectors employ this master meter in checking the accuracy of the brewery beer meter to determine the volume of beer brewed. In the photograph the large tank receives the liquid [after passing] thru the meter where it is weighed to get [the] true volume. Carl F. Stoneburner is reading ….

Deborah Carey: Champion Of Change

new-glarus
Congratulations to New Glarus Brewing co-founder Deb Carey, who was selected as a Champion of Change by President Barack Obama and the White House. It’s great to see someone from craft brewing honored.

Here’s the write-up for Carey on the White House website:

Deborah Carey’s decision to start New Glarus Brewing Company was rooted in doing what was best for her family rather than becoming the local woman who broke down barriers to start a brewery. As she worked on a business plan, her husband Dan, a master brewer, gathered the materials, grains and equipment needed for start-up. In 1993 they negotiated to rent a warehouse in New Glarus, exchanging the lease for stock in the New Glarus Brewing Company.

They sold their home and raised $40,000 in seed money, yet still needed more cash to fund the startup. Deborah pitched her story to local newspapers, and the media attention brought $200,000 from investors. In the early days, the couple worked hard to establish the brewery’s reputation for consistent quality beers. Deborah’s marketing plan was to develop a very loyal customer base. She set up beer tasting classes along with offering brewery tours. Beer distributors started noticing the little brewery that was developing a strong consumer following.

New Glarus Brewing Company has grown to 50 full-time employees, has registered growth in profits of 123 percent from 2007 to 2009, and is Wisconsin’s number one micro-brewery relative to sales volume.

Thoughts On The New Dietary Guidelines From Beer Business Daily

spirits-wine-beer
You most likely hard that the USDA released the quinquennial Dietary Guidelines for Americans at the end of last month. The 2010 version made a number of small, but significant changes with regard to food, such as “make half your plate fruits and vegetables” and “drink water instead of sugary drinks.”

In Chapter 3, they also made one small change to how they define an “alcoholic drink.”

alcohol-defined

Harry Schuhmacher commented on the guidelines in today’s Beer Business Daily newsletter. With Harry’s permission, below I’ve reprinted his thoughts on the Dietary Guidelines and specifically the changes to the alcohol portion of them:

Earlier this week the USDA issued its 2010 Dietary Guidelines as it does every 5 years. It states: “One drink is defined as 12 fluid ounces of regular beer (5% alcohol), 5 fluid ounces of wine (12% alcohol), or 1.5 fluid ounces of 80 proof (40% alcohol) distilled spirits. One drink contains 0.6 fluid ounces of alcohol.”

Now, you’d think this maybe isn’t a big deal. Well, you’d be wrong on that. It is.

Here’s why: The previous USDA Dietary Guidelines five years ago had very similar language, although it was fought tooth and nail by the beer and wine lobbies. However, this time the feds added the crucial last sentence: “One drink contains 0.6 fluid ounces of alcohol.” [Emphasis added.]

This further puts the Feds on record as saying, basically, a drink is a drink is a drink, even though we all know in reality that’s not the case. You can be sure that Diageo and DISCUS — the spirits lobby — worked with a laser focus to get this sentence added. It’s the next step toward alcohol equivalency (for excise tax, labeling, and consumer access issues), even though Diageo and DISCUS have previously said this is not what they’re after.

LABELING: First let’s consider labeling. As we know, the federal TTB is considering (since 2003) allowing alcohol producers to include voluntarily display serving facts (which includes standard alcohol content for servings) on labels. This is an issue that large distillers support, but brewers and wineries typically oppose because some believe the push for serving facts is a stalking horse for equivalency.

INDUSTRY SPLIT ON STANDARD DRINK: The Wine Institute and DISCUS are on the same side of most issues, such as opposing the CARE Act, but standard drink isn’t one of them.

DISCUS followed the release of the Guidelines with a statement. “The Government today emphasized the scientific fact that a standard drink of beer, wine and distilled spirits each contains the same amount of alcohol,” said Dr. Monica Gourovitch, Distilled Spirits Council’s svp of scientific affairs. “Alcohol is alcohol and it all should be treated equally, as a matter of public health and public policy.”

Monica told our sister publication, WSD, that the updated definition is “very clear” and shows that “each standard drink contains the same amount of alcohol.” When looking at the science involved, each serving has the “same effect on the body — potential benefits and potential risks.” She also noted that the National Institute on Alcohol Abuse and Alcoholism (NIAAA) already defines a standard alcoholic drink as anything containing 0.6 fluid ounces.

Wait ….. 0.6 fluid ounces of alcohol? Not 0.5 fluid ounces? There are plenty of public health folks who defined drinks as having 0.5 fluid ounces of alcohol as a standard drink. Who, I wonder, lobbied the USDA to add that extra 0.1 fluid ounce to the definition?

The Wine Institute, for one, is livid. For once they are on the other side of DISCUS on an issue. The WI issued a statement on Tuesday, saying there is no such thing as a standard drink: “We agree with the time-tested definition of a serving as being 12 fl. oz. of regular beer, 5 fl. oz. of wine, or 1.5 fl. oz. of 80-proof distilled spirits but are concerned about the additional statement that each of the drinks contains the same amount of alcohol. A precise fluid-ounces-of-alcohol statement implies that the alcohol content is the same for every drink of wine, beer or distilled spirits when, in reality, alcohol content varies widely from drink to drink. Consumers should not be misled into believing there is such a thing as a ‘standard drink.’ In fact, the term ‘standard drink’ does not appear in the Dietary Guidelines.” This is true. But it doesn’t dull the fact that a federal agency has swallowed the equivalency argument hook, line and sinker while the rest of the industry sleeps.

The Beer Institute and the NBWA have remained mute on this issue, so far. But clearly it is important: As one alcohol politico told me: “Once the language is in a federal government guideline, it’s in the bloodstream.” What he meant by that is that, since the USDA has defined a drink as 0.6 ounces of alcohol, it gives the TTB cover to move forward with their “serving facts” labeling, and maybe it gives the states the argument to increase taxes on beer and wine and offer it at more times and in more channels, and maybe it gives the feds something to point to when considering an excise tax increase. It’s a slippery slope, my friends, toward equalization of taxes and access among the beverages, which works against beer and wine and is probably just bad public policy. In fact, if alcohol excise taxes were suddenly equivalent, it would virtually kill the wine and beer industries, and we’d be a nation of vodka swillers like Russia, wiping away 200+ years of cultural and policy differences between the beverages. It was Thomas Jefferson who logically first put forward the notion that moderation should be nurtured by the government by encouraging the consumption of beer and wine over spirits.

As usual, a distributor put it most succinctly: “So a Four Loko is the same as Jack Daniels is same as Coors Light is same as Mad Dog 20/20 is same as a hot 17% abv California cab is the same as an 11% abv Italian white? Really?”

It brings to mind the old story where August Busch III went to Capitol Hill and demonstrated to a Congressman considering equivalency that a drink is not a drink. He reportedly said, “I’ll drink these three Budweisers, and you drink these three dry martinis, and at the end we’ll see who is more intoxicated.” It’s a shame our beer industry leaders don’t pull more stunts like that.

Ethanol is ethanol, to be sure. But different types of bev-alc are consumed by the majority of Americans in different ways. Ethanol is ethanol, but a drink is not a drink.

Thanks Harry. If you don’t know about his Beer Business Daily, especially if you’re in the beer business, I highly recommend it. You really should subscribe to Harry’s newsletter.

Coffee Stouts Saved

fda
Finally some good news out of the knee-jerk ruling by the FDA to ban drinks mixing alcohol and caffeine. To their credit, they’ve put up a Questions and Answers: Caffeinated Alcoholic Beverages page. Question No. 7 answers the concerns of brewers and fans of coffee stouts, along with other craft beers that have caffeine in them as a result of ingredients that add a variety of flavors, too. The question and answer is below in its entirety.

Does This Action Apply to Coffee-Based Liqueurs?

No. These Warning Letters are not directed at alcoholic beverages that only contain caffeine as a natural constituent of one or more of their ingredients, such as a coffee flavoring. The alcoholic beverages that are the subject of FDA’s Warning Letters are malt beverages to which the manufacturer has directly added caffeine as a separate ingredient.

Media Reaction To SF Mayor’s Veto Of Alcohol Tax

san-francisco
As I reported yesterday, San Francisco mayor Gavin Newsom kept his promise to veto the proposed ordinance that seeks to add an additional tax on alcohol sold in the city.

Here’s mayor Newsom’s veto letter that he sent to city supervisors:

This letter communicates my veto of the ordinance pending in File Number 100865, finally passed by the Board of Supervisors today, September 21, 2010. This ordinance proposes an Alcohol Mitigation Fee to be imposed on alcoholic beverage wholesalers and others who sell or distribute alcoholic beverages in San Francisco.

I cannot support this unnecessary and harmful new fee that will hurt our City’s economy and cost us jobs at a time when we most need them.

In this economy, I fundamentally believe that we need to be encouraging local businesses – large and small – to continue to work and operate in our neighborhoods, to continue to provide jobs and security to the residents of San Francisco, and to continue to support our City’s economy in its recovery. It is in these times of struggle that we need to stimulate our local economy – not pursue policies that will stifle growth and put our county at a competitive disadvantage with every other county in California.

In addition, while we have faced significant budget deficits for the last three years, we consistently have supported the provision of critical health care services to our residents most in need – at a much higher rate than surrounding counties. And, we will continue to do so. Therefore, I do not accept the premise that, but for this fee, we will be slashing our health care programs.

I also strongly believe that we are in questionable legal territory due to state preemption issues, and that passing this ordinance would risk millions of dollars in attorney’s fees that we can ill afford. I prefer to hold those battles for creative policy areas where we believe we are in strong legal standing.

I remain committed to working with the Board of Supervisors and City departments to continue to identify impactful programs to help chronic inebriates in San Francisco. However, I do not believe that an alcohol impact fee is the best approach in achieving that policy goal. Our best hope for continued strong financial standing of this City and support for public health services is to help our local economy grow and thrive.

The media reaction has been swift and voluminous. At least twenty media outlets throughout the state have weighed in since yesterday afternoon. Here’s what the San Francisco Chronicle, by John Coté, had to say:

Newsom contends the fee would hurt jobs and is illegal, treading on the state’s authority to regulate alcohol.

“You don’t help the city’s general fund by spending hundreds of thousands of dollars on a lawsuit we’re going to lose,” Newsom said.

Other opponents, such as the San Francisco , argue the fee is really a tax and thus needs voter approval. The city attorney issued a confidential opinion to supervisors that warned of potentially significant legal risks associated with the legislation on both fronts. Liquor industry representatives vowed to sue if the legislation were enacted.

And I love this gem. “Avalos said there was simply ‘no evidence’ that consumers would face inflated costs.” Puh-leeze. His insistence that there would be no mark-up on the tax from wholesaler to retailer to consumer is completely naive and disingenuous. Everyone in the business community is telling him the tax will be marked up, but that’s not “evidence.” Does he think they’re all lying just because they don’t like the tax? Has he never worked in any business capacity? That’s what businesses do, they mark up their costs and pass them along to consumers. Not doing so is how you go out of business.

National Action Alert: Help Craft Brewers Reduce Taxes

tax
If you’re a regular Bulletin reader, you’ve already seen me rant about how unfairly taxes are levied on the brewing industry, who has to pay more taxes than any other product sold in America, except tobacco. With the help and support of the Brewers Association, H.R. 4278 has been introduced into thee U.S. House of Representatives seeking a redress of those egregious taxes. The BA has issued a national action alert, asking beer lovers everywhere to contact their elected officials to ask them to co-sponsor the bill. Here’s the press release:

Federal legislation in the U.S. House of Representatives, H.R. 4278 (link opens a PDF), seeks to enact a reduction in beer excise tax for America’s small brewers.

For small brewers brewing less than 6 million barrels annually, this legislation would cut the small brewer tax rate in half, to $3.50/barrel on the first 60,000 barrels, and reduce the upper tax rate from $18/barrel to $16/barrel on beer production above 60,000 barrels up to 2 million barrels.

Of the 1,525 breweries in America, 962 are brewpubs and 470 are the smallest bottling breweries, which produce volumes of 15,000 barrels of beer a year or less and sell their beers in local markets. Once barrel equals about 13.8 cases of beer.

The original small brewer tax rate of $7/barrel was established in 1976 and has never been updated. Since then, the annual U.S. production of America’s largest brewery increased from about 45 million to 107 million barrels and over 200 million barrels globally (or 1,240,000,000 five-gallon batches of homebrew!). Much has changed and the challenges small brewers face as small American businesses have grown dramatically since 1976.

Why is this a good idea?

  1. A tax reduction will help grow small business breweries and provide greater access to the beers you enjoy.
  2. Harvard University’s John Friedman’s study, Economic Impact of Small Brewers Excise Tax Reduction (H.R. 4278), (link opens a PDF), reveals that H.R. 4278 would also help stimulate job creation quickly and at a low cost:
    • The bill would generate more than 2,700 new jobs over the first year to 18 months, followed by an average of 375 new jobs per year over the following four years.

Please contact your U.S. Representative and ask that he/she sign on as a co-sponsor of H.R. 4278.

We have developed a resource page to give you the information and tools you need to make the case to your Representative for supporting this tax relief measure—and by extension, for supporting the small brewery businesses that are such a vital part of our local communities.

On the resource page, you will find a link to a list of current sponsors of H.R. 4278. If your Representative DOES NOT appear on this list, please take a moment and email your Member of Congress to ask them to cosponsor H.R. 4278.

If your Representative is already a cosponsor, please email him/her a brief thank you for their support of small brewers and you, the craft beer drinker and enthusiast.

Here’s some links to help you find out who your elected officials are so you know who to contact:

Okay, people get contacting. Your brewers thank you.

Backlash Brewing In Pennsylvania

pennsylvania
After the furor caused by the state police raids on three Philadelphia bars, and a subsequent raid on a beer distributor, there does appear to be a backlash coming. Several people predicted that was one possible outcome — I believe Don and Lew both mentioned it — and now it may indeed be playing out that way. In a new report posted today by Don Russell and Bob Warner, Beer-Raid Flap Coming to a Head, Hearing Ordered, it appears that the state legislature has scheduled a joint hearing (of the House Liquor Control Committee and the Senate Judiciary Committee) for April 13 to look into the matter.

From the article:

“We’re scared,” one bar owner told the Daily News. “I’ve instructed my staff to match every beer we get delivered with the PLCB’s list of registered brands. If it’s not on the list, we’re not going to take delivery.”

Sources told the Daily News that several beer distributors in other parts of the state had been visited by State Police in search of unregistered beer.

As I’ve opined before, this is creating a culture of fear among legitimate business people and that’s not something our government should be doing, especially under the economic duress of today. Lew Bryson has even set up a new Facebook page, Abolish the PLCB-Rewrite the Code. After a few short hours there were nearly 3,000 members. Even if you’re not from Pennsylvania, join it and show the world that we’re tired of arcane alcohol laws and they need to be changed.

There’s also a new separate account by Patrick Walters of the Associated Press, Brew-haha Frothing Over Philly Bar Raids.

Senator Asks Military To Let Fighting Soldiers Drink Beer

camo-beer
Since we’ve been in the Middle East and Afghanistan, we’ve struggled with how to keep our soldiers happy and yet respect local laws and customs. In March of 2006, General Abizaid of the U.S. Central Command, signed General Order No. 1 to help clarify and determine how our men and women fighting overseas are permitted to relax and conduct themselves. One thing General Order No. 1 prohibits them from enjoying is a beer, or indeed any alcohol whatsoever.

Under Prohibited Activities:

general-order-1b

According to a Wired report:

In part, the order is out of sensitivity to “host-nation” culture. But it’s also a major safety issue. Alcohol, firearms and heavy machinery don’t mix, and the Department of Defense doesn’t want to have to explain a rise in negligent weapons discharges to angry members of Congress.

Recently, however, Senator Jim Webb of Virginia (Dem.), during a Senate Armed Services Committee meeting, floated the idea that “U.S. military commanders should consider loosening the ban to allow ‘alcohol for stress relief.’”

Now before you jump down my throat, consider that there’s already a problem with the “increased use — and abuse of — of prescription drugs by deployed troops” with “troops popping pills to fight everything from fatigue to depression. The Pentagon is even investigating using pills as a preventive treatment for post-traumatic stress.” So his suggestion that maybe letting the troops have an occasional beer while off duty might have some benefits to the mental and physical health of our soldiers doesn’t seem too outlandish under the circumstances. During my time in the military I was never in a war zone, so I never experienced this kind of prohibition. Hell, we had a coin-operated soda machine in our day room filled with cans of beer.

But beyond respecting the “host-nation culture,” weren’t troops in World War II, Korea and other police actions permitted limited amounts of alcohol? My stepfather was in Vietnam with the Marines in the early 1960s and I know he drank quite a bit while he was there. From time to time, he’d open up about his time “in country” and what they’d do when they were off-duty, and it involved a lot of drinking, much of did in fact seem designed to relieve stress. I can’t help but think the ban is more a sign of the times than about any real danger from soldier’s drinking in moderation.

If soldiers made it through at least WWII, Korea and Vietnam safely while being able to have a drink, it doesn’t seem like they’d fare any worse today. Winston Churchill quipped that his staff should “make sure that the beer — four pints a week — goes to the troops under fire before any of the parties in the rear get a drop.” And before that John Churchill, First Duke of Marlborough, said. “No soldier can fight unless he is properly fed on beef and beer.” And before that Frederick the Great concluded that “many battles have been fought and won by soldiers nourished on beer.” But yeah, I understand the argument that war is different now, but I’m pretty sure that argument has been used during every single increasingly modern war. I just don’t agree with it. Given all we ask of our soldiers and how badly our government has treated so many of them, I think we should be doing everything possible to help them relax and unwind whenever they get a little time away from the job.

And even within the scope of respecting cultures, it doesn’t seem too out of line to me that something like the “green zone” or some other spot that’s secluded and separated from the native population could be created where soldiers could relax and have a drink. They did just that for the Super Bowl, where an exception was made and beer was served during the game.

The Wired piece concludes:

Would the military consider lifting its ban on booze? I highly doubt it. Gen. Stanley McChrystal, the top U.S. commander in Afghanistan, banned alcohol at NATO’s International Security Assistance Force headquarters in Kabul, after he noticed coalition officers dozing off at a picnic table.

Now I hope I’m not going too far here, but why were officers taking a nap at a picnic (presumably after drinking alcohol) such an Epiphanal moment for the general? What on earth is wrong with a tired, stressed soldier having a drink and catching a little shuteye while off duty? They weren’t belligerent. They weren’t fighting. They weren’t getting into any mischief. They were taking a nap. And this sight made General McChrystal worried enough that he decided, not to figure out how his soldiers could get the rest they needed, but instead to ban the alcohol that helped them fall asleep. Personally, I’m all for letting them have a beer once in a while. At the very least, they’ve earned it.

More On 2nd Raid Of Pennsylvania Distributor

v-mask
Yesterday on Don Russell’s Beer Radar, he had the basic information on a second raid by the PLCB and Pennsylvania State Troopers. As promised, a fuller account was published today, with additional reporting by Bob Warner, in the Philadelphia Daily News. Here’s the account, entitled In Another Raid, State Police Hit Beer Distributor, Origlio’s, in Far Northeast.

The state continues to confiscate Duvel, Monk’s Café Flemish Sour Red Ale and even Hacker-Pschorr, despite all three brands having been registered and sold for many years. Russian River Brewing’ Supplication was also one of the beers confiscated, but in that case Vinnie Cilurzo admitted he’d simply forgotten the paperwork for the very small number of cases shipped to Pennsylvania. As reported by Russell, Cilurzo stated. “We are a small mom-and-pop brewery and every once in a while something slips through the cracks.”

What continues to be troubling is that this is essentially just paperwork errors and miscommunication and it’s being treated like the crime of the century. Did they really need to go in armed, like storm troopers? Were they expecting trouble or that gunfire might be necessary? It’s not like they were raiding a bootlegger’s den and could expect Tommy guns to be carried by everyone inside the distributorship. It seems absurd to think there might be some justification for that level of power display.

As another remarked. “‘It’s just a clerical problem, but they’re treating this stuff like contraband,’ said one distributor who asked not to be identified.” See what we’ve created? Here’s a legitimate businessman who’s afraid to be identified while criticizing the PLCB and the state police for fear of retaliation, despite the fact that as a citizen he has every right to do so. When we aren’t comfortable exercising basic rights like that because we believe we’ll be targeted by the people we’re criticizing (who, let’s not forget, are there to serve the people), that, to me, is a very scary development indeed. Now that’s a chilling effect. This is just going from bad to worse.

UPDATE: Thanks to James Costa for pointing this out. Today, the Philadelphia Inquirer’s food writer, Rick Nichols, gives us his take on the PLCB raids in Beer Raid Backfires on Liquor Agents.