I’m a little behind on this one, but thought it worth mentioning all the same. Last Friday, a week ago, the oldest brewery in Ireland was shut down. Heineken, who’s owned the Beamish & Crawford Brewery in Cork since last October, decided in December to close the brewery and move production elsewhere to cut costs. The brewery, located on South Main Street, has been making beer since 1690, making it Ireland’s oldest brewery. There had been talk of turning it into a museum, a plan endorsed by Cllr Brian Bermingham, The Lord Mayor of Cork. Its mock-Tudor counting house is already a “protected structure” and, according to The Independent, “the National Conservation and Heritage Group (NCHG) argued that the existing Beamish site offers an opportunity to create a tourism-heritage complex similar to the Guinness Storehouse in Dublin.” Heineken decided instead to sell it “on the commercial market” since they obviously couldn’t care less about the history of the place. Like any multinational corporation, they only care about short-term profit.

British beer writer Roger Protz has a nice summary of who’s owned Beamish over the past few decades, and how those events led to Heineken acquiring it last year.

While Murphy’s fell into the hands of Heineken, Beamish also had a turbulent life in the 20th century. In 1962 it was bought by the Canadian group Carling O’Keefe, which in turn was bought by the Foster’s lager group of Australia. This allowed Beamish Stout to be sold through Courage pubs in Britain as Courage was owned by Foster’s. Eventually Courage was taken over by S&N, which gave the brand little promotion in Britain but, incongruously, marketed it in France alongside its French subsidiary Kronenbourg.

Abut 120 jobs will be lost and production will be moved across town, to what for most of its existence was known as the Lady’s Well Brewery, also owned by Heineken, where they make Murphy’s Irish Stout.

While looking through the information at the Tax Foundation today I came across a very interesting article and a study about cross-border sales of beer and tobacco and how it effects tax revenues. It’s not something I thought much about or figured had that much impact but the study, done ten years ago, seems to suggest otherwise. Essentially, what happens is that between state borders, people either living near them or happen to be traveling through them will purchase items in the other state, the one where the taxes are less, making the products themselves less expensive. I hadn’t thought about this phenomenon in a long time, but I recall that as a kid, my stepfather — a heavy cigarette smoker — had people bring him cartons of cigarettes back from southern states where, presumably, the taxes were so much cheaper that the cost of a carton of smokes was worth the effort of buying them in another state and hauling them back to Pennsylvania. And I’ve heard in some states, particularly on the east coast where they’re closer together, people would travel across state lines to buy a car for the same reason though as I understand it most states have enacted laws to make that practice not work anymore.

How this relates to beer is that in states where the excise tax differs greatly from a state bordering it, the price of beer can likewise be pretty dramatically different between those states, primarily because the base tax gets marked up along the distribution chain so the difference in the tax is magnified. That makes it susceptible to cross-border buying resulting in lost sales and tax revenue for the state with the higher tax rate. How much of a problem could this be? I confess I was initially skeptical, but the study, How Excise Tax Differentials Affect the Cross-Border Sales of Beer in the United States, done by the Tax Foundation in 1999 found that nationally it resulted in nearly $35 million in “lost sales & excise tax revenue.” That certainly sounds like enough that it should give any state pause before jacking of their state’s excise tax rate on beer. It’s just one more reason why raising a state’s beer tax might be a losing proposition economically.

Here’s an excerpt from the abstract for the study:

Cross-Border Shopping for Beer

While the study measures cross-border shopping in every state, the results are naturally most dramatic along borders where the tax differential is high. For example, Washington state, which levies a statewide 6.5 percent sales tax, additional local sales taxes and a $7.172 per barrel beer excise tax, shares a border with Oregon, which levies no state or local sales taxes and has a state beer excise of just $2.60 per barrel.

Huge quantities of beer cross the border in these circumstances, but this migration of economic activity affects more than just sales and product-specific excise tax collections. Cross-border shopping affects income and property tax collections, license fees, and a host of other sources of government revenue.

Policymakers are frequently surprised by the magnitude of the revenue effects, and such surprises can be particularly unnerving when the government in question is required to maintain a balanced budget.

According to the study, California alone lost $5,248,466 for the year studied. The conclusion seems fairly unambiguous, here are the last two paragraphs:

The per capita sale of packaged beer varies widely by state. It has long been suspected that these differences are due in part to cross-border shopping. Building on earlier work in this area, this study sought to explain differences in packaged beer sales among the states. A model of demand for beer and its supply by source was constructed. This model was created in a manner that allowed it to capture the effects of both interstate and Canadian cross-border shopping on beer sales in the states.

The model was then tested empirically using data from 1990–1997. Cross-border shopping was found to have significant effects on packaged beer sales in the states. In particular, the study found that in 1997, 18.1 million cases of beer, on net, moved from low- to high-tax states. Such exports accounted for approximately 2.0 percent of sales in net exporting states and allowed them to export $18.8 million in sales and beer excise taxes to their high-tax neighbors. In addition, states along the U.S.-Canadian border were able to export 10.9 million cases of beer and $14.6 million in sales and beer excise taxes to Canada. The study clearly shows that high sales and excise tax differentials lead to significant increases in cross-border beer sales.

The pull-quote that lawmakers should pay attention to is that by being too heavy-handed with imposing higher excise taxes on beer, it just might backfire to the point where it’s actually counter-productive and even reduces the amount of taxes collected. It could, it appears, actually wreck a state’s economy

Policymakers should be aware that the effects of cross-border shopping on income taxes, property taxes, and license fees can match or even exceed the revenue changes in state and local sales and excise taxes measured by the model.

The study is long and complex, but worth your time if you’re in a position to speak with or write to a state lawmaker, or if you’re a geek for this stuff like me. It’s 24 pages and is available as a pdf file.

There’s an interesting opinion piece at the Christian Science Monitor by Patrick Fleenor, who’s the chief economist for the Tax Foundation. It’s called The Tyranny of Taxing ‘Sin’. There’s some good stuff there, but here’s my favorite part:

Fleecing the minority is made much easier by an army of busybodies who make a comfortable living feeding “studies” to the media, proclaiming that Americans eat the wrong foods, drink the wrong beverages, don’t exercise enough, and are generally sinful. These modern-day Carrie Nations’ denunciations of nearly every commonplace pleasure — from Girl Scout Cookies to movie theater popcorn — are fodder for the nightly news.

To dispel the notion that their sin taxes go too far, the nanny-staters rely on a clever sleight-of-hand: Instead of pitching the tax as a punishment for sin, they claim they’re merely compensating society for costs imposed by bad habits. These claims are often unsupported by science, but many media repeat them without question.

That’s certainly true of the neo-prohibitionists, who keep insisting that vague alcohol-related “stuff” accounts for an enormous cost burden for taxpayers, but the supporting evidence I’ve seen for that is either non-existent or ludicrous at best. Yet the media repeats that endlessly and people comment here trying to asset is as a fact, too.

As many of you probably know, I recently started writing at the Bottoms Up blog, specifically the On Beer portion. You probably also know that I often find myself in the position of defending the moderate use of beer as part of a healthy lifestyle. I don’t know many of my fellow writers there, so when a reader sent me a piece called “Why does alcohol get a pass?” by Oakland Tribune columnist Tammerlin Drummond, I didn’t quite know what to think. I must not have been the only person to react strongly to it, because the next day she changed the title and perhaps made other changes, I can’t be sure. But the gist of it is that she believes that while we tax cigarettes because of, as she states, “the medical research the past four decades that has linked smoking to lung cancer and other deadly illnesses,” alcohol inexplicably gets a “pass.”

Well, not only does alcohol not get a pass from my perspective — even though in some ways it probably ought to — but also Ms. Drummond ignores certain facts about alcohol and essentially considers only one side of the debate raging between people who enjoy to drink in moderation and those would prefer another prohibition. So I’d like to present some information from the other side of the aisle, to hopefully give you a more balanced view of alcohol in society. As I said, I don’t know Tammerlin Drummond personally, though I’m sure she’s a fine lady. I do want to discuss some of her arguments and the information she appears to base them on, but I want to stress she’s as entitled to her opinion as anyone else, and it’s her opinion and ideas that I’m disagreeing with.

She begins by talking about how the perception of smoking as cool has declined as medical research uncovered more and more health risks and how the state has heaped taxes on tobacco as a result. She finds that acceptable given that tobacco appears to provide no real health benefits and that generally “smoking-related illnesses cost all of us, in higher insurance premiums,” etc.

She then takes that argument and applies it to alcohol, and asks why alcohol seemingly gets a pass, since, as she states it, it “contributes directly or indirectly to so many deaths.” She goes on to say that “[a]lcohol overconsumption is, after all, one of the leading lifestyle-related causes of death in this country, according to the CDC.” But “moderate consumption,” which is how the vast majority of Americans enjoy beer, wine or spirits, is not the same as “overconsumption.” Those are two separate arguments. But that even assumes that the figures are correct, which I do not believe for a second. It has been pointed out the way in which “alcohol-related” is defined is not necessarily an accurate portrayal of what’s going on. For example, if a passenger in a car has been drinking but the driver was not and there’s an accident, that’s considered an alcohol-related accident.

Ms. Drummond tells us the tales of two unfortunate incidents that took place locally, one, where a high school student died after drinking too much at a friend’s house, and the other where a young woman and her family died after a car accident in which the woman had been “intoxicated.” Those are both terrible incidents to be sure, and there’s obviously no excuse for them and the people who were involved or allowed them to happen. But we could also look at those individually and say that poor judgment was shown and not simply reflexively blame alcohol, as we so often do as a society.

High school students have been drinking unsupervised for as long there have been high schools. While I’m not condoning such behavior, I engaged in it as a teenager and so did millions of other people without any unfortunate consequences. We could go on and on about how the parents should have been there, that they should not have been able to obtain alcohol if they were underage, etc. but this incident should not be used to suggest that if there were no alcohol, that teens would never manage to get into trouble. That’s no comfort to the parents, I realize, and I too would be devastated if it happened to either of my two children, but I’m convinced that we can’t create a functioning society by over-protecting our children to the point where they can’t grow and learn how to function on their own. As it is, we seem to be heading in that direction as we give our children far fewer liberties than in my generation.

In the other incident, the young woman who was driving intoxicated had a suspended license and neither of the 3-year old twin boys she was driving with were in a child seat or had on a seat belt. As the kids’ mother and her brother, also passengers, were killed instantly, it’s likely they didn’t have on their seat belts either. Only the driver survived, and she has a broken neck. I agree with Drummond that it’s a tragic incident, but, and I hope I don’t sound too callous here, there are other non-alcohol-related factors that contributed to the deaths in that car accident. Who let the person with the suspended license drive? Why were there no car seats? Why weren’t the kids at least wearing seat belts? You can’t honestly blame alcohol for those stupid decisions. Most parents, even the ones who drink alcohol, do have car seats, do wear their seat belts, do have a valid license, and know when not to get behind the wheel of an automobile.

But these make effective cautionary tales, and so we hear about them in the news. What we don’t hear about are the thousands of people who had a drink or two and drove home without incident. We don’t hear about the thousands more who had a few too many and knew it was best to call a cab or take the bus home. There’s a saying in the news business that “if it bleeds, it leads,” meaning that stories of a certain kind will get reported because people are interested in reading them. Stories where nothing happens do not often make the front page. It would be great to see a headline that reads “young man drinks too much and takes bus home safely,” but nobody would buy that newspaper. And so we get a skewed perspective of the problem. And neo-prohibitionist groups use such emotional stories to persuade people that the problem is much worse than it might really be.

As a society, we love our statistics and will lump this accident into every other marginally similar one and say this is just one of many and, therefore, something needs to be done. Studies a few years ago showed that using a mobile phone while driving is the equivalent of driving drunk, but where was the mad rush to ban cellphones in cars. It took a few years before even the bluetooth law could be passed. Every day I see people talking on their mobile phones while driving, seemingly oblivious to the fact that they’re breaking the law. And far more people talk and drive than drink and drive, so where are the organizations dedicated to making the roads safer from this abuse? Where is MAC, Mothers Against Cellphones?

The seemingly scary statistic from the World Health Organization “that there are 2 million alcohol-related deaths worldwide each year” that is in Ms. Drummond’s editorial only represents just under 0.03% of the world population. Not 3%, but three-hundredth of a percent. By contrast, the number one cause of death worldwide is heart disease, which claims over 11 million lives each year, or 0.16%. That’s 5 1/2 times as many people as alcohol, so where is the hue and cry about all the unhealthy food producers that are getting a pass?

That’s even assuming the alcohol-related percentage is truly an accurate figure, something that many do not. Many of the statistics that say how terrible the alcohol problem is were created and funded by organizations that let’s say charitably are not interested in showing alcohol in the best light. To combat these, groups funded by alcohol companies have begun doing their own research which, to the surprise of no one, finds very different results. Yet the industry results are largely discarded as being biased while the statistics created by neo-prohibitionist groups are not usually given the same scrutiny and are often accepted as free from bias. Why?

Drummond points to Mothers Against Drunk Driving, saying that they’ve “fought to reduce alcohol-related fatalities. The group’s aggressive national campaign has led to stricter DUI laws in many states, with heavy penalties for DUI offenders.” What she doesn’t mention is that MADD founder Candy Lightner left the organization years ago because she believes that she may have been wrong and in any case believes the organization she started has veered far from its original and intended purpose. And it doesn’t even appear to be working as unfortunately drunk-driving fatalities are not going down.

Perhaps we’ve been taking the wrong approach. Maybe investing in public transportation would be a more effective way to combat drunk driving? If our mass transit actually worked the way it does in most European cities, where it’s all linked together and people can actually get where they want to go, perhaps far less people would get in their cars after drinking too much. Building such an infrastructure would stimulate the economy and create jobs. Everybody wins.

Then, of course, we should be educating our kids about the use of alcohol. There’s no reason why sex education couldn’t be expanded to include information about alcohol. Perhaps a better name would be “lifestyle education,” and could include health education of various types, such as alcohol, tobacco, in addition to sex. But even if that was not possible, then why shouldn’t education begin at home? Unfortunately, in many states it’s actually illegal for a parent to teach their own children about alcohol. And many events like beer festivals are “adults only” making it impossible for families to attend and for kids to see what responsible drinking looks like through modeling behavior. The more we separate and divide society into areas with alcohol for adults only and kid-friendly with no alcohol whatsoever, the worse we’re making it for our youth, in effect having the opposite of the intended result. The more we make alcohol a taboo, the more attractive we make it for many teenagers. Neo-prohibitionist groups continue to claim that raising the drinking age to 21 has been a rousing success, but as former college dean John McCardell argues persuasively, it has not stopped underage drinking and in fact has driven it underground, causing more binge drinking and dangerous behavior. His Choose Responsibility organization is trying to encourage a less one-sided debate on this issue and at his Amethyst Initiative, 135 college and university deans have signed on in support of lowering it back to 18.

Perhaps the most important distinction between tobacco and alcohol is that the moderate consumption of alcohol, unlike cigarettes, has many proven health benefits. Study after study around the world has shown that people who abstain, that is never touch alcohol, are usually less healthy than people who drink in moderation. There are now a myriad of well-settled health benefits associated with moderate drinking, which is how the vast majority of American enjoy their drink. So when it’s actually healthier to drink than not, that’s what I mean when I say maybe alcohol should get a pass.

In case you didn’t know, alcohol was among the first things our government ever taxed, way back at the beginning of the Civil War, before there was the I.R.S. or income tax. To pay for the war, Congress levied the first income tax on the remaining Northern states in order to raise money to fight the war with the Southern states. By the end of the year, Congress realized it wasn’t enough and they needed a way to raise more funds for the war. In a special session in December 1861, Congress reviewed a request by the Secretary of the Treasury, Salmon P. Chase, to raise the percentage of income tax slightly and levy “excise taxes” on a number of goods, including beer, distilled spirits, cotton, tobacco, carriages (the automobiles of the day), yachts, pool tables and even playing cards, to name a few. After the war ended, most were rescinded, except, of course, for tobacco and alcohol. To this day, cigarettes and booze are the only two goods that have to pay an excise tax in the U.S. That means that alcoholic beverages already pay more taxes than any other consumer good you can buy. And since both the state of California (as does every state) and the federal government both impose an excise tax, that means it’s significantly more already. Currently, the taxes on beer are 68% higher than the average for goods sold in the U.S. Roughly 40.8% of the price of a beer is taxes, whereas it’s 24.2% for all other products sold. In 1992, the federal government doubled the excise tax from $9 to $18 per barrel, which caused the total taxes collected to go down because of reduced sales from higher prices, and it took years before the sales (and tax revenue) rebounded.

That brings us to Drummond’s final argument. “Why aren’t lawmakers — so keen to gouge cigarette smokers — clamoring for a $1.50 tax on shots of Patron?” Simply put, they are. Besides already gouging tobacco as well as alcohol with excises taxes, many states across the country in dire economic straits are looking at raising their state excise taxes, looking to alcohol companies to help foot the bill instead of raising taxes equally, essentially punishing one specific industry. Here in California, a state legislator from San Jose last year proposed raising the taxes on beer 1400%. He tried again last month to impose a 535% increase. The federal Senate Finance Committee just last week proposed nearly tripling the federal excise tax on beer to pay for President Obama’s health care initiative. Beer, and alcohol, is most definitely NOT getting a pass and is in fact under attack all across this land, despite having health benefits and contributing positively to the economy. The beer industry alone (that is, not including the wine and spirits segments) contributes $24,646,539,216 to California’s $1.6 trillion economy, and the beer industry alone represents just over 1.5% of our state economy. California employees of beer businesses pay annually over $3 billion in federal, state and local taxes ($3,408,824,767) and over $240 million ($242,183,691) in Consumption Taxes.

In our recent special election earlier this month, California voters said they want no new taxes. Of course they did. With so many out of work and so many in danger of losing jobs, homes and pensions, it was foolish to expect that people would accept the long term reality that taxes will have to go up. But cuts in services alone will not get us fiscally solvent again. People rarely will choose a path, even if it’s in their best interests, if it means paying more taxes. So lawmakers look for alternatives that their constituency will accept, and often those take the form of taxing luxury goods or excise taxes. And because of the way our media sensationalizes the worst drinking offenders in our society, rarely giving a voice to both sides of the debate, and because of the way in which neo-prohibitionist groups spread propaganda, many people have a skewed opinion about alcohol, formed without knowing all the facts or knowing about all the positive factors that do, I believe, balance much, if not all, of the harm.

I recently participated in a telephone poll, where the pollster asked me the seemingly innocuous question “how much do you think alcohol consumption harms society,” with the only answers available being a range of five from “very little” to “a lot.” But I don’t believe mere consumption causes any societal problems and in fact provides many benefits, both tangible and intangible, from health benefits to an improved quality of life. Overconsumption may cause problems, but that’s very different. The problem as I see it is that the poll presumed that consumption, any consumption, is harmful. And that’s something I think a lot of people do believe, because of how drinking is so often portrayed.

Historically, though, it’s worth reminding people that civilization was likely founded upon early man’s desire to make beer. Originally it was thought bread — the two are quite similar — was the catalyst but more and more scientists are leaning toward beer as the reason hunter-gathers settled down to grow barley and other grains. But whether it was first or second, it was certainly one of the earliest features of our ancestors’ earliest attempts to build civilizations that led all the way up to the present. That you and I are here most likely is a direct result of your ancestors’ genes having a tolerance for alcohol, which not coincidentally is often referred to as “liquid bread.” In a column by political pundit George Will last year, entitled Survival of the Sudsiest, Will passed along a fascinating idea that he learned from a 2006 book by Steven Johnson entitled “The Ghost Map: The Story of London’s Most Terrifying Epidemic — and How It Changed Science, Cities, and the Modern World” (a book I’ve since read and heartily recommend). In Johnson’s book, he discusses how at the dawn of civilization, survival often depended on how a person’s body reacted to and could tolerate the beer that was generally safer to drink than water. Over time, only people who were genetically predisposed with the ability to drink large quantities of beer survived, passing that trait down to their children so that perhaps today most of us have such an ancestor as evidenced simply by the fact that we’re here. As Will (and Johnson) explains.

The gene pools of human settlements became progressively dominated by the survivors — by those genetically disposed to, well, drink beer. “Most of the world’s population today,” Johnson writes, “is made up of descendants of those early beer drinkers, and we have largely inherited their genetic tolerance for alcohol.”

So it’s not a stretch to say we owe our very existence to beer. Obviously, society has changed dramatically since then and that life is far more complex than it was at the dawn of civilization. But throughout most of the rest of history, alcohol played a positive role, only becoming a target of scorn in the 19th century when the modern temperance movement began.

Many of the often moral objections to drinking we still hear today owe their existence to the movement that eventually brought upon our national Prohibition from 1920-1933, a failed experiment by any measure. Much of the propaganda against alcohol we hear today is the same as used by those early temperance groups. But today we know better, or should. Research has shown that responsible drinking in moderation has many health benefits and is part of healthy lifestyle far more than abstinence. Yet many people who don’t drink continue to believe there’s no difference between having a drink or two with a meal and guzzling out of a beer bong at a frat party kegger. Some even view all drinking as “a sin,” which I believe is at the heart of why it’s treated differently. There’s a thread of anti-alcohol sentiment running through our history that doesn’t exist in most other countries. Despite the fact that early settlers like the Pilgrims and others were in fact beer drinkers, many Americans tend to view alcohol as inherently bad or even evil, even unconsciously, so that we tend to accept certain arguments against alcohol as fact because of this strange notion underlying any discussion that it’s taken for granted that alcohol is bad, it must be heavily regulated, we must vigorously protect our children from it, and that it’s responsible for every evil unleashed on the world. It’s strange really. I have a drink most days of the week, so do many, if not most, of the people in my circle of friends. We’re probably a lot like you. We hold down jobs, we pay our taxes and we manage to have a positive impact on our community while at the same time drinking responsibly. We’re the majority, really. But you never hear our story.

Most people take the beer they buy for granted. It’s just a part of their overall lifestyle. They don’t have to think about. That’s my job so I tend to see the positive side of alcohol as balancing the negative. Not everybody will agree with that. I’m no stranger to being insulted and even threatened for even suggesting that not all drinking is bad. But most people, I contend, don’t think it is inherently bad, just that a small minority have the potential to abuse it. I hate those people, because they’re ruining it for the rest of us. I grew up with an alcoholic stepfather who made my life miserable. But even as a child I knew it was him, and not the alcohol that was to blame for his behavior. Alcohol has the potential to enhance our lives and make them better, but some people give it the power to do the opposite. Those people should be responsible for their actions. They should be punished appropriately if they break the law. Blaming alcohol for peoples’ actions is wrong. People who use the excuse of being drunk as a justification for their actions are deluded.

If you’ve read this far — and God bless you if you managed it — chances are you already know all that. You probably have a drink from time to time and have managed not to sink into ruin, become an alcoholic or destroy your life. You probably enjoy a glass of beer or wine with your dinner or with friends over a barbecue. Alcohol isn’t all bad. That it can and does effect some people negatively should not be a reason to demonize it for everyone. Let’s drink a toast to that.