I think I’ve mentioned before that my wife is a political news junkie. She just sent me this link from one of the most popular political websites, Politico, entitled Craft beer bridges partisan divide in Senate. It’s nice to see beer getting some mainstream attention.
The Politico article is all about the introduction Wednesday of BEER, “Brewer’s Employment and Excise Relief Act,” which would cut taxes for microbreweries and on the production of smaller quantities of beer barrels, among other things. It was introduced in the Senate by Republican Mike Crapo (Idaho) and Democratic Senator John Kerry (Massachusetts).
Although Senator Kerry misstates that the “craft beer revolution started right here in Massachusetts,” I think we can forgive him for that one, having obviously been talking with Jim Koch for many months about this bill.
Here’s Crapo’s Press Release about the introduction of the BEER Act:
Small Brewery Tax Bill Would Create Jobs, Open Markets
Wednesday, March 9, 2011
Washington, D.C. — Senators Mike Crapo (R-Idaho) and John Kerry (D-Massachusetts) today introduced legislation to reduce the beer excise tax for America’s small brewers. The Brewer’s Employment and Excise Relief (BEER) Act will help create jobs at more than 1,600 small breweries nationwide, which collectively employ nearly 100,000 people. Idaho and Massachusetts are home to dozens of small breweries.
“Like any private business, craft brewing is all about supply and demand,” said Crapo. “In touring Idaho last year, I met with many craft brewers who are seeking to expand their business because they are seeing increased demand for their product. In addition, this legislation will expand the ready markets for our barley, wheat and hops producers in Idaho. I remain optimistic this bill will pass this year to create new jobs and new markets.”
“The craft beer revolution started right here in Massachusetts and they’ve been going toe to toe with multi-national beer companies ever since,” said Kerry. “This bill will help ensure that these small businesses keep people on the payroll and create jobs even during tight economic times.”
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. The BEER Act also helps states that produce barley, hops and other ingredients used by these small brewers. In addition to Senators Crapo and Kerry, the legislation is co-sponsored by a bipartisan coalition of 16 additional Senators.
Currently, a small brewer that produces less than two million barrels of beer per year is eligible to pay $7.00 per barrel on the first 60,000 barrels produced each year. This legislation will reduce this rate to $3.50 per barrel, giving our nation’s smallest brewers approximately $19.9 million per year to expand and generate jobs. This change helps approximately 1,525 breweries nationwide.
Currently, once production exceeds 60,000 barrels, a small brewer must pay the same $18 per barrel excise tax rate that the largest brewer pays while producing more than 100 million barrels. This legislation will lower the tax rate to $16 per barrel on beer production above 60,000 barrels, up to two million barrels, providing small brewers with an additional $27.1 million per year that can be used to support significant long-term investments and create jobs by growing their businesses on a regional or national scale.
The small brewer tax rate was established in 1976 and has never been updated. This legislation would update the ceiling defining small breweries by increasing it from two million barrels to six million barrels. Raising the ceiling to six million barrels more accurately reflects the intent of the original differentiation between large and small brewers in the U.S.
Actually, if you lived in the Eastern U.S. back in bleaker beer times, Boston Beer was where it started for many. It was the case for me. A Samuel Adams Boston Lager was the first craft beer I ever had and was one of the first beers period I tried back in the late 90s. It was many years later before I ever had an Anchor Steam or a Sierra Nevada, and I had tried many other craft beers before those. Anchor still isn’t easy to find–and that goes for here in Montana now. With the new leadership that appears to be changing. I never liked Sierra Neveda–and most of their stuff still doesn’t do it for me–so when I would have them as a choice, Sam was also a choice as well and I’d go with them. So for most of us east of the Mississippi at least, Boston Beer appeared to lead the craft beer movement.
Adam, Yeah I get that, but that’s going to be true for different people in different places. Whatever was the first microbrewery beer a person tried shouldn’t be thought of as the first craft brewer, especially when the facts are so clear. New Albion incorporated in 1977, Boston Beer was founded in 1984, 7 years later. It’s not even close. And that’s not including Anchor, which Fritz bought in 1965. I love Jim Koch, really I do, he’s done an immense amount of good for craft beer. But he wasn’t the first. He was one of the first, of course, but that’s not the same thing. He undoubtedly met with Kerry and told him Boston Beer was the first micro in Mass. and Kerry mis-quoted him, or he fudged the facts. Whichever way it went down, Kerry was wrong. I wasn’t trying to make a big deal out of it, but sometimes the facts matter, and I think this is one of those times. The people who did start the crazy revolution we’re on deserve the credit that’s due them. Fritz Maytag and Jack McAuliffe are the two who started things off, and it’s them who deserve that credit.
P.S. — I did live on the East Coast in those bleaker beer times — New York, Pennsylvania and North Carolina — until moving to California in 1985.