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National Action Alert: Help Craft Brewers Reduce Taxes

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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

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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

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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

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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.

PLCB Conducts Second Raid On Distributor

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pennsylvania
Pennsylvania’s beer scene appears on the brink of martial law, with the state police last night raiding one of the distributors who carries some of the beer confiscated earlier this week, such as Duvel. Don Russell has posted to his Beer Radar blog what is known so far, and promises to have a fuller account of the shenanigans tomorrow in the Daily News, again with reporting by him and Bob Warner. I’ll update this post with a link when it’s up.

From Beer Radar:

What we’re witnessing isn’t just bureaucratic incompetence or the result of outdated laws. This is an act of unrepentant arrogance. As one local restaurant operator remarked of the BLE [Bureau of Liquor Enforcement], “They don’t answer to anybody. They’re running amok.”

Stay tuned, this is only the beginning ….

UK Creates New Ministry For Pubs

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pub-sign
How cool is this. The UK government has just created a new Ministry — similar to our cabinet positions — The Ministry for Pubs. Wentworth MP John Healey was named the firs Minister, and he had the following to say about his appointment.

“Pubs are often at the heart of community life. And they are important meeting places for many people. While we can’t stop every pub from closing it’s right we do everything possible to back them. But they need help now so I am determined to have a deal on the table with a package of practical help in the next few weeks.”

The Morning Advertiser has the full story, to which Drinks International added.

Mark Hastings. British Beer and Pub Association (BBPA) director of communications said: “This is a clear sign of the strong public desire to see British pubs supported and the success of our campaign over the last year. We hope this means that pubs will now have a strategic place in Government policy making, and we are pleased that the agenda echoes so many of the priorities we have identified.

“We couldn’t wish for a better minister than John Healey as the voice for pubs within Government, and look forward to a positive, frank and constructive relationship with him in order to support this great British institution that is so important to the social and economic life of local communities.”

Can you imagine a cabinet post in the U.S. Secretary of Alcohol? Or Drinks Czar? It would give new meaning to the term, “member of the bar.”

Philly’s Beer Police State

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v-mask
If this doesn’t make you shudder, you’ve got eisbock running through your veins. It appears the Volstead Act is alive and well in the Commonwealth of Pennsylvania. According to an account of Pennsylvania’s Beer Storm Troopers entitled Troopers Raid Popular Bars for Unlicensed Beers, by Don Russell, with Bob Warner, earlier today in the Philadelphia Daily News. What happened was three Philadelphia bars were raided simultaneously, Swat team-style, looking to confiscate — gasp — unlicensed beer brands. The police raid netted a few hundred bottles of beer, much of it lawfully registered. The cops simply couldn’t find many of the beers on their list because the names didn’t match exactly. For example, they took bottles of Duvel because the bottle reads “Duvel Belgian Golden Ale” but the PLCB (Pennsylvania Liquor Control Board) has it listed as “Duvel Beer.”

Perhaps more unsettling is the raids were prompted by “a citizen complaint,” but authorities are refusing to reveal the complainant. Whatever happened to the right to face one’s accuser as guaranteed by the 6th Amendment? [As Andy Crouch, lawyer by day, points out, the 6th Amendment pertains to criminal proceedings, which this was not.] That aside, what possible motive might someone have? Jealous competitor? Rabid neo-prohibitionist? Annoyed neighbor? I’m perplexed.

From the article:

“No actual investigating was done,” [bar owner Leigh] Maida said in an e-mail to the Daily News. “The police sent a shoddily typed list to the PLCB, some drone fed it into the machine verbatim and returned what came back, without . . . even trying to offer us the benefit of the doubt by double-checking on some of the so-called unregistered beers.”

“My main beef with this whole convoluted situation is that the PLCB is the sole regulator of a set of products that they do not even know the names of,” she said.

The State Police has given the bar owners until this evening to prove the beer was licensed, in effect making them prove their innocence. So in this case they’re presumed guilty unless they can show otherwise. Am I missing something? Isn’t that supposed to be the other way around? Either way, the confiscated beer will be held for 6-8 months. Given that it’s unlikely it will be stored cool, most of it will likely be ruined in that time, anyway.

No matter how you slice this, it sure seems like we’ve stepped into some alternate universe where McCathyism is going strong, only its target is no longer Communism, but beer.

untouchables

UPDATE: Jack Curtin has some more information on this incident in the form of an e-mail from bar owner Leigh Maida with additional details.

UPDATE #2: Lew Bryson has some great stuff about the incident on his No PLCB Blog.

Boycott UPS For Refusing To Ship Beer

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ups
Wow, this is one of those seriously WTF stories (thanks to Lisa Morrison for tweeting it). The Idaho Statesman has a disturbing little story entitled UPS, FedEx Side With Wine in Beer Battle by their beer columnist, Patrick Orr. To work yourself up into the proper lather, I recommend reading the whole column first.

But essentially, an internet beer retailer — Brewforia.com — after 18 months of uneventful UPS shipping asked UPS for a specific contract to ship to other retailers, beyind the regular customers he’d been shipping to all along. Instead, UPS “told him they weren’t going to deliver Brewforia products anymore — no matter if a state allows such deliveries direct to consumers or not — and were not going to offer a contract.”

Their website has an entire page on wine shipments and how they do them. UPS ships wine for countless online wine stores. Beer is mentioned just once, here:

UPS provides service for other alcoholic beverages (beer and alcohol) on a contract basis only. For shipments containing beer or alcohol, shippers must enter into an approved UPS agreement for the transportation of beer or alcohol as applicable, must be licensed and authorized under applicable law to ship beer and alcohol, and may ship only to licensed consignees. UPS does not accept shipments of beer or alcohol for delivery to consumers. UPS accepts shipments of beer or alcohol only among and between selected states.

According to the Idaho column:

“When asked why UPS will deliver wine and not beer, [Susan Rosenberg, a spokeswoman for UPS] said ‘that has just been a policy that we have had. It’s a program where our focus has been working with a number of licensed wine shippers.'” “For right now, UPS has chosen policy where beer contracts are for business-to-business shipments.”

UPS goes on with even more nonsensical gobbledygook:

Rosenberg said the issue is complicated by some states defining wine differently than beer and having different distribution requirements. UPS officials have been working with wine retailers for longer and don’t have any immediate plans to revisit their beer policy, Rosenberg said.

No, heaven forbid thy revisit their beer policy to bring it in line with the world in 2010. So the obvious answer now to “What Can Brown Do For You” is nothing if you’re beer, everything if you’re wine. That they utterly fail to see the hypocrisy in that is baffling, especially since they’re essentially throwing away money by their refusal to treat beer equally. It’s important to remember this is a policy decision, not a reaction to any law. Beer can be shipped to consumers in a majority of states, UPS has just chosen not to.

Personally, I think we need to organize a grassroots response and inundate UPS with just how ridiculous they’re being. Hypocrisy should not be rewarded.

Anti-Alcohol Ads Driving People To Drink … More

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target-alcohol
I’ve long held the belief that anti-alcohol ads that attempt to stop people from drinking by trying to make them feel guilty are ineffective. Pointing out the harm that such people may cause to themselves or others never seemed like the right way to encourage responsible behavior. Many, if not most, people who abuse alcohol, or any other substance, usually do so for some underlying reason. Attacking the result and not the cause always seemed like the wrong approach, like blaming the gun instead of the person who pulled the trigger. It turns out my intuition may have been correct after all.

A study soon to be published in the April edition of the Journal of Marketing Research appears to confirm that. The article, Emotional Compatibility and the Effectiveness of Antidrinking Messages: A Defensive Processing Perspective on Shame and Guilt by Nidhi Agrawal and Adam Duhachek, is based on research conducted at the University of Indiana. Their research revealed that not only do such guilt-ridden ads not work, but they actually exacerbate the problem, making it worse.

According to IU researcher Duhachek:

“The public health and marketing communities expend considerable effort and capital on these campaigns but have long suspected they were less effective than hoped,” said Adam Duhachek, a marketing professor and co-author of the study. “But the situation is worse than wasted money or effort. These ads ultimately may do more harm than good because they have the potential to spur more of the behavior they’re trying to prevent.”

That’s right folks, the neo-prohibitionist groups that have been trying to guilt people into not drinking have actually been making people drink more, perhaps causing more harm than if they’d just shut up and let people live their lives.

Here’s more about the study from a recent press release from the Indiana University Newsroom:

Duhachek’s research specifically explores anti-drinking ads that link to the many possible adverse results of alcohol abuse, such as blackouts and car accidents, while eliciting feelings of shame and guilt. Findings show such messages are too difficult to process among viewers already experiencing these emotions — for example, those who already have alcohol-related transgressions.

To cope, they adopt a defensive mindset that allows them to underestimate their susceptibility to the consequences highlighted in the ads; that is, that the consequences happen only to “other people.” The result is they engage in greater amounts of irresponsible drinking, according to respondents.

“Advertisements are capable of bringing forth feelings so unpleasant that we’re compelled to eliminate them by whatever means possible,” said Duhachek. “This motivation is sufficiently strong to convince us we’re immune to certain risks.”

So essentially, the ads trigger a defense mechanism that causes people “to believe that bad things related to drinking can only happen to others and can actually increase irresponsible drinking.”

Onlybeer
An anti-alcohol group’s PSA equating beer with heroin. It was never funny, and I always found it offensive, but it turns out it may have even driven people to drink more. You can also see more of the ads the researchers used for their study at the Media Awareness Network.

Even though the study won’t be published until next month, you can read an advance pdf of it at the Advance Articles page of the Journal (it’s the sixth one from the top). The study is 32-pages long, with another 10 pages of bibliography and other supporting data.

While the study stops short of suggesting that such ads have over time made teens and other target demographics drink more, they do caution that future ads seeking to curb dangerous behaviors employing “guilt and shame appeals should be used cautiously.” Essentially, they politely suggest that the anti-alcohol community think about what they’re doing and the consequences of ad campaigns that do not include a well-planned media strategy. What I wonder is whether or not the groups responsible for such ads will feel any guilt themselves for driving people to drink more.

UPDATE: Advertising Age had another story about this study, but from the perspective of the journal article’s other author, Nidhi Agrawal, from the Northwestern University’s Kellogg School of Management.

Paris Too Sexy For Brazil?

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eiffel-tower
This has the ring of false controversy all around, with a WTF! vibe thrown in just to keep us off guard. Famous for being famous person, Paris Hilton, is embroiled in yet another scandal, this time for being “too sexy” for television … in Brazil! I got wind of this yesterday when AdAge ran a story about it entitled Is Paris Hilton Too Sexy for Brazil? My initial reaction was that walking down the average street in Rio De Janiero during Carnival, she’d hardly stand out at all.

paris-devassa

Hilton is apparently involved in the entire campaign for Devassa Bem Loura — or very blonde — beer, as evidenced by her being featured on that portion of the brewery’s website. Devassa in turn is owned, at least in part, by a larger beer company, Grupo Schincariol. Grupo Schincariol is Brazil’s second largest brewer after AmBev, a division of Anheuser Busch InBev.

Devassa

The brand name itself apparently is slang for — how shall I put this? — “a loose woman” and Bem Loura, the particular flavor Hilton is endorsing, means “very blonde” in Brazilian Portuguese.

What the headlines are missing, of course, is that it’s not her “sexiness” that has the government up in arms, but the potential violations of specific bits of their advertising code that prohibit certain actions in advertising alcohol — rules few other products have to abide by. Sex, of course, is used to sell practically everything, but people get their panties in a twist when there’s alcohol involved. So apparently Brazilian “ad regulations stipulate that beer commercials cannot treat women as overtly sensual objects, though ads can show women in bikinis if they are on a beach.” Uh, having seen plenty of Brazilian beer ads, is that really enforced? A spokeswoman for the Brazilian Women’s Secretariat told London Telegraph that “It’s an ad that devalues women — in particular, blonde women.” I’m not arguing that it doesn’t, just that it seems no worse, and frankly a little tamer, than many other beer ads I’ve seen. If we’re going to go nuts again about the double standard in alcohol advertising, I’m not sure this is the best test case. Take a look below, and see if you can find this more offensive than the average beer ad. Bad? Maybe. Worst yet and having finally crossed the line? You tell me, I certainly don’t think so. Personally, I don’t find Paris Hilton all that appealing, but plenty of other men sure seem to find her sexy. While I’m not immune to a pretty face, I find brains far more sexy, and a pretty face with brains a lethal combination. That’s why I married a woman smarter and more attractive than myself. Ask anyone, it’s true.

Hilton did herself no favors when during a recent trip to Rio to promote Devassa beer, she got drunk and danced on stage. According to the Advertising Age piece I referenced earlier:

Brazil’s self-regulatory body, Conar, is investigating an ad campaign starring Paris Hilton for Devassa Bem Loura beer for being too sexually provocative, even by the racy standards of Brazilian beer ads.

According to local trade publication Meio & Mensagem, Ad Age’s partner in Brazil, Conar this week opened three different investigations into local brewer Grupo Schincariol’s launch campaign for Devassa Bem Loura (Portuguese for “Very Blonde”) beer last month during Brazil’s riotous Carnival.

US Magazine reported that “Eduardo Correia, a spokesperson for regulation company Conar, which has opened three investigations into the campaign, says the ad is particularly offensive because it doesn’t take place on a beach. ‘The problem with the ad isn’t a lack of clothing, but its sensual nature,’ Correia said. ‘A woman in a bikini on a beach isn’t necessarily sensual; it depends on the context.'” Now I don’t want to defend the ad, per se, but really? The outrage is because she’s somewhere other than on a beach? That sounds like a double standard if ever I heard one.

Another account had this to say. “This is, honestly, a bit of shock. The commercial is surprisingly tame. We’ve all seen Paris in several states of undress (many times!) throughout the years, so this is sort of yawnfest. Perfume ads incite more lust.” My thoughts exactly, a yawnfest.