Brookston Beer Bulletin

Jay R. Brooks on Beer

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Prohibition Through Taxation

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tax
Being April Fool’s Day, this might almost seem laughable, if it wasn’t so serious and obvious an attempt to bring about prohibition through taxation. (And thanks to the many people who sent me information about this, you know who you are, I appreciate it.) A San Diego couple, Kent and Josephine Whitney, have introduced a ballot initiative they’re calling the “Alcohol-Related Harm and Damage Services Act of 2010.” If that sounds innocuous, it’s not. If they collect the required 433,971 signatures by August 23, it will be on the California ballot this November. The “Act” seeks to raise alcohol taxes as listed below. If you have a drink in your hand, put it down first. If you’re standing up, sit down. Drum roll, please:

  • Spirits — 2,700% increase [from $0.65 per 750 ml bottle to $17.57]
  • Beer — 5,500% increase [from $0.11 per 6-pack to $6.08]
  • Wine — 12,775% increase [from $0.04 per 750 ml bottle to $5.11]

No, those aren’t typos. The anticipated revenue of $7-9 billion would be used to fund the Department of Alcohol and Drug Programs, whatever that is. It won’t be used to fix the state deficit apparently.

In the OC Weekly Blog, Dave Lieberman correctly comments that “this is Prohibition through taxation” [a phrase I hope he won’t mind me borrowing]. He continues.

“The armchair libertarians must be having sedentary conniption fits from Yreka to Ysidro. Nowhere does it say that alcohol has to be a zero-sum game, not to mention the fact that the vast majority of those who do drink do so responsibly, which means you’re taxing those who play by the rules to pay for those who don’t.”

Ballotpedia lists a dozen reasons for the ballot measure, each one more fallacious than the last. The Whitney’s blame alcohol for murders, pregnant women drinking, burdens on health care, underage drinking, binge drinking; pretty much everything any neo-prohibitionists has ever thrown up against the wall, while naturally ignoring all of the personal responsibility for any of those actions. It’s as if they’ve drank the anti-alcohol kool-aid and believe unquestioningly all of the propaganda from those groups. To blame the alcohol and not the people who engage in those behaviors is a common tactic lately but ignores logic, common sense and any notion of fairness. It also reveals quite a lot about the mindset of the people who believe such nonsense. Also, if the ballot measure should pass, it would declare all of that nonsensically bad propaganda masquerading as statistics as true!

It also ignores the physical and mental health benefits of responsibly drinking moderate amounts of alcohol. Numerous studies have shown many, many health benefits to moderate drinking, not least of which are the many studies that show that people who drink moderately tend to live longer and be healthier than people who either abstain or overindulge. So in effect, this ballot measure would most likely make people in California less healthy.

Curiously, the State Attorney General’s summary says:

Additional state revenues of between $7 billion and $9 billion annually from an increase in state excise taxes on alcoholic beverages, with the proceeds going to support alcohol-related programs and services. A decrease in state and local revenues from existing excise and sales taxes on alcoholic beverages of several hundred million dollars annually due to a likely decline in consumption of alcoholic beverages.

The Initiative’s Analysis from the state Legislative Analyst’s Office goes into more detail but remains similarly conservative in the negative consequences while swallowing wholesale the notion that it would actually bring in the estimated $7-9 billion in additional excise tax revenue. First of all, the loss of business and company’s going out of business outright would cause that figure to be greatly reduced from the start. If a bottle of wine has at least $5.11 in state excise taxes plus all of the other taxes, plus the costs of ingredients, manufacture, packaging, transportation, etc. even two-buck chuck is going to become ten-buck Ken or worse.

Similarly, if just the state excise tax on a six-pack of beer starts at $6.08, again plus every other cost of doing business, just who in their right mind believes that consumers will continue to merrily drink the same amounts at exponentially higher prices? Don’t even get me started on how many dollars will fly out of California by people driving to bordering states to buy their alcohol. You’re going to see a cottage industry in just-over-the-border liquor stores popping up wherever a road leaves California. It’s absurd to believe the revenue stream would continue at the same rate.

That analysis suggests that only several hundreds of millions of dollars would be lost in decreased consumption seems laughably conservative. Here’s some of their reasoning, from the analysis:

Effects on Existing State Excise and SUT Revenues. The decline in taxable consumption of alcoholic beverages that would likely be caused by this measure would reduce the revenues received for the General Fund from the existing state excise and SUT revenues. We estimate that this could potentially result in a loss of state revenues of several hundred million dollars annually.

Effects on Local Revenues. The likely decline in taxable consumption of alcoholic beverages due to the increase in the excise tax imposed under this measure would also affect local SUT revenues. We estimate that local governments, primarily cities and counties, would experience a decrease in sales tax revenues of approximately $100 million on a statewide basis due to the excise tax increase.

Indirect Economic Effects. If the measure were to result in declines in overall economic activity in California, it could produce indirect state and local revenue losses. Such effects could occur, for example, if businesses were to close because they could no longer remain profitable as the overall economy adjusted to a lower demand for alcohol in the long run. If these lost resources were not redirected back to California’s economy into equal or more productive activities, then it would likely lead to a net loss in taxable income and spending for state and local governments. The magnitude of these potential revenue losses is unknown.

See that last bit? “The magnitude of these potential revenue losses is unknown.” I can pretty much tell you it’s going to be staggering. It would be a near prohibition, with a return to illegal hooch. After homebrewers start selling their kitchen beers under the table, new law enforcement agencies will be created to stop them, every homebrew shop will be watched and anyone with a pair of rubber boots will be under suspicion.

So who the hell are the Whitneys and why are they trying to effect an alcoholic Armageddon? Those are good questions, I think, and there’s at least one very disturbing possibility. The V Bit Set speculates that it may be simply for money. Doing some detective work, internet style, he points out there is a Kent Whitney in the San Diego area who owns the 21st Century Wellness Initiative, and the ballot measure would provide “fifteen percent for the funding of grants for naturopathic treatment and recovery programs for alcohol addiction.” Are the two connected? He admits it’s wild conjecture at this point, but it is compelling nonetheless. If it turns out to be true, how vile and repugnant would this be? On an unimaginable scale, I’d have to say. To attack an entire healthy industry, putting thousands of workers and hundreds of businesses at risk of being removed from the economy for personal gain would be one of the most abominable acts of all time. If they’re sincere, it’s clear they either didn’t think through their actions or are entirely hostile to anyone who enjoys, makes or sells alcohol.

Marin Institue Wagging Their Finger At Brewers Again

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The Marin Institute is at it again. Today, they published a shiny color-coded map showing how — and I love this bit of doublespeak — “State Governments Neglect Beer Taxes.” The press release goes on to suggest that “inflation has decreased the value of low beer taxes, while state budget shortfalls have exploded.” Of course, that argument can be made for every single tax in existence, from sales tax to income tax yet they’re not crying about those not being raised. Everything is effected by inflation, yet it’s alcohol taxes that must bear the burden for that. And I’ve said it before, and I guess I have to keep saying it, but trying to make alcohol pay for the state’s shortfalls is not in the least bit fair. Alcohol companies didn’t cause the problems we’re all experiencing, yet these neo-prohibitionists keep insisting they must disproportionally pay to fix them. Whatever fixes are imposed should be paid by everyone, not just the convenient target of an extremist anti-alcohol organization.

This neglect, they claim, has “[l]egislators ignoring a lot of revenue their states could use right now.” They neglect, naturally, to factor in all of the direct and indirect positive economic contributions that the alcohol industry makes to our economy, one of the few industries growing and providing jobs. Instead, they suggest punishing and harming the alcohol industry to, and here’s a telling quote, “prevent future losses.” That presupposes that these taxes are somehow ordained from on high, sacrosanct and absolutely necessary. But are they? Not in the least. The taxes they’re referring to are excise taxes, taxes no other industry except tobacco has to pay. Alcohol companies already pay more taxes than any other goods manufacturing industry in the country. The notion that they have to be adjusted for inflation is something these yahoos just made up because they don’t like alcohol. The maps are very colorful and utterly useless.

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Ooh, look at the pretty colors.
 

These excise taxes are patently unfair and always have been since they were first imposed during the Civil War to raise money for the Northern Army. That they’re taken for granted and most people believe there’s a good reason for them has more to do with anti-alcohol propaganda and decades of ceaseless attacks painting alcohol as a sin. Today’s reason du jour for the continued excise taxes is usually stated as alcohol is somehow duty-bound to pay for any harm caused by people abusing the products they make and sell. This argument, of course, doesn’t stand up to the simplest logic. Not everybody abuses alcohol, of course, and the percentage that do so are in a very small minority of the total number of people who regularly drink.

Still, this notion persists that the industry must pay for a small percentage of alcohol abusers. But if it’s about the harm, then why aren’t soda and fast food manufacturers taxed similarly for the burden they place on our healthcare system. People over-eating surely has made many people unhealthy and their medical bills far higher than people who eat a healthier diet. Why don’t they have to pay for the harm they cause? Why don’t pharmaceutical companies get taxed for the harm caused by people who abuse their prescription drugs? Why don’t gun and bullet makers have to pay for the violence caused by their products? I could go on and on. Almost everything causes harm if abused, but only alcohol has to pay for it, apparently.

What’s most pernicious about these recent attacks by anti-alcohol groups is that they’re simply seizing an opportunity caused by the economic downturn to advance an agenda that has little to do with what caused our economic woes. They’re essentially just stoking people’s fears to further their own agenda of removing alcohol from society by taxing it to death and figuring people will go along with it if they step up their lying to them about it at a time when we’re all worried about the future. It’s quite frankly, disgraceful.

In other recent news, the California state legislature did not approve Jim Beall’s latest attempt to punish alcohol with his nickel-a-drink tax that’s come up several times before and will continue to be brought up until the people of San Jose finally get smart enough to vote him out of office. Jim Beall is like a rabid dog that just won’t quit nipping at alcohol’s heels.

The Marin Institute’s chief flack, Bruce Lee Livingston quipped after its most recent defeat. “How in good conscience … can these public servants vote no or even worse abstain on this bill? It’s a travesty; whose interests are they representing?” Well, listen up, I’ll tell you. A nickel-a-drink sounds like a modest proposal, but it’s not. It would greatly raise the price of alcohol, especially beer, and even though I know that’s your real goal, it harms a healthy segment of the economy at a time when there are fewer and fewer healthy segments left. Legislators understand that. You do not, because you don’t care about the economy if it means alcohol continues to prosper. You only care about causing the alcohol industry harm. So it helps the interests of business, something pretty important if raising money is the goal so everyone in California can prosper. To you, it seems like a fine time to attack alcohol, but to people who really do care about the state’s economy, not so much. You also keep going on about big beer, but this harms 200 small breweries, many of which are Mom & Pop businesses just trying to make a living and feed their families, not giant behemoths.

Voting against it also helps the interests of the poor, who buy a lot of the beer, especially when Beall’s bill exempts 79% of wineries. The fee (or tax) is regressive, meaning it falls disproportionally on the poorest Californians. The bill also funds healthcare facilities to treat alcohol and drug abuse. Drugs, you may not realize, are not made in breweries, so asking alcohol companies to pay for pharmaceutical abuse is not exactly fair. In addition, the $700 million (still only 3.5% of the state deficit) you claim will help the budget won’t do any such thing if all or a portion is being used for these treatment facilities. Those are in addition to balancing the budget.

Sadly, the bill, “AB 1694 will be re-considered in the Assembly Health Committee on April 6.” And so it goes ….

Beer In Art #71: Tom Payne’s Beer Series

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art-beer
Today’s work of art is by a local artist, from nearby Sonoma County, by the name of Tom Payne. He’s embarked on a series of beer paintings, at least one of which has appeared in All About Beer magazine. So far, five paintings in his Beer Series have been completed, with more promised to follow. I think my favorite so far is Jack o’ the Green.

Payne_Jack-of-the-Green

Here’s how Payne describes the painting:

Then came Mad Lloyd’s Jack o’ the Green Summer Ale. A parade festival of sorts, including the Green Man, the Lord of Misrule (whose appearance at a Summertide Festival caused me no end of cognitive dissonance), an alligator playing a trombone and various other parts and parcels.

But a close second has to be Mad Lloyd’s Tumultuous Uproar Imperial Stout, see below.

Payne_Tumultuous-Uproar

That was the second beer painting an in essence the one that set Payne down the path. All his work has a great, surreal quality, reminiscent of Max Ernst or the much earlier Hieronymus Bosch. There are lots of mysterious, fun details painted throughout every nook and cranny of each work.

Here’s a part of his biography, taken up starting with his arrival in Sonoma.

I moved to Sonoma County and started oil painting late in 2002, taking a few classes at the Santa Rosa Junior College to get things rolling. I discovered that oil is “where it’s at.” Pen & ink has always been the thing, but oil is the blastocyst, no question.

I am “interested in the spaces between line and form, real and imaginary, accident and purpose, defined and mysterious–figures that turn into landscapes and landscapes that become figures” it says here… how odd. I see things wrong (I also hear things wrong), and that’s what the “deal” is apparently.

I still draw and paint and make wine and wander about. Time continues to become a burgeoning apparatus. The wild turkeys are closing in and there is very little time left of time. So we may as well “do right” and “come about” in the appropriate manner.

Blah blah, crappy crap. And cetera. Aliusque tambien.

There’s much more at Payne’s website, Eyeball Press, where you can see galleries of paintings, and big paintings along with drawings and much else. He also sells his own work and takes commissions, too.

And here’s one more beer painting, Too Many Secrets Porter.

Payne_Too-Many-Secrets

Oakland Brewing Finds A Home

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oakland-brewing
Steve McDaniel and the folks trying to launch Oakland Brewing Co. have some good news. They’ve found a location, finally. It’s the Old Cottonmill building at 1010 22nd Avenue in Oakland. It looks like a great old brick building with some history to it. As Steve is quick to remind me, they still have a very long way to go before the building can be turned into a working brewery, but if their luck holds they hope to have beer in the market by the end of 2010.

OBC-Cottonmill-1

The building, I’m told, is located “a short diagonal off Livingston Street (terminating at I-880), which intersects Embarcadero where Quinn’s Lighthouse sits, just northwest from Coast Guard Island. Once you’re on 22nd Ave, drive toward the freeway and the building will be on your right … if you hit Numi Tea at I-880, you’ve gone too far. Irish Monkey Cellars, who make a fine Cabernet Franc, is right in that same area too.”

You can see more photos of the building at their website.

Join Me For A Beer Dinner At Anchor With Sierra Nevada

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sierra-nevada anchor-steam
Join me for a five-course beer dinner at the Anchor Brewery in San Francisco celebrating Sierra Nevada Brewing‘s 30h anniversary and the release of their first collaboration of the year, Fritz & Ken’s Ale, which is a stout.

S-N-Collab-1

There are only five seats left for the beer dinner, which will take place on April 1 (no fooling). Here are the particulars.

Join two of the original craft-brewing pioneers for an intimate one-night-only celebration of beer and food at the historic Anchor Brewery in San Francisco. Anchor Brewing’s Fritz Maytag, and Sierra Nevada’s Ken Grossman will be celebrating the release of their collaboration beer, Fritz and Ken’s Ale, in honor of Sierra Nevada’s 30th anniversary. Come and join us for a 5-course dinner packed with unique rare and vintage beers, seated amongst the kettles in the legendary Anchor brewhouse.

Reception starts at 6:00 PM on April 1st, 2010 at Anchor Brewing Company, 1705 Mariposa Street
San Francisco, CA 94107

Five-Course meal, 11 interesting beers, and souvenir glassware.

$100 tickets, limited to 60 seats, no tickets available at the door.

beerdinner_apr

Tickets must be purchased online, they won’t be available at the door. You can get them at ClicknPrint Tickets. I’ll see you there.

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Ken Grossman and Fritz Maytag in the Anchor brewhouse, where the dinner will be held next Thursday.

Beer In Ads #70: Burgie’s Gardening Day

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Monday’s ad, since it’s the first one I’ve posted since Spring began on Saturday, is all about getting out and working on your lawn and garden … with a beer, of course. A lawnmower beer, perhaps? Though it looks like a pretty old lawnmower. It’s for Burgie, brewed by Burgermeister Brewery of San Francisco, California. It’s about as green an ad as I can imagine. I’m not sure of the date, though it was probably before 1972, when the brewery was bought by Falstaff from Chicago’s Meister Brau (who owned it at that time). Eventually, the brewery closed around 1979.

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The New Anderson Valley: A Chat With Trey White

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Recently it was announced that Ken Allen, who founded the brewery in 1987, is selling Anderson Valley Brewing to Trey White, a former USB executive. The response on the series of tubes we all know and love as the internet was swift and surprisingly negative. Also, there was quite a lot of speculation that was simply untrue. Even the local Anderson Valley Advertiser detailed some of the negative reactions. So I spoke with Trey White this morning to clear up some of the misinformation swirling around and get to the bottom of what he has planned for his brewery when he takes over next month, after the sale closes.

First, the biggest piece of misinformation, which I didn’t even need to talk to him about to correct. A number of negative comments took the form of “how sad, another case of a big business swallowing up a smaller one.” Wrong. White is a former VP with USB. That means he doesn’t work there any more, and in fact hasn’t for several years. I, and most of the accounts that mentioned his former job did so to show that he brings beer industry experience with him. That’s a good thing. It means he knows how the industry works. As I learned when I spoke with White, the business will be family-owned, just White and his wife. No big company in the background, just a mom and pop operation.

Here’s what else I learned about his plans for the brewery. White first visited the brewery three years ago and immediately fell in love with the place. He and Ken Allen have been discussing the purchase for nearly that long. He’s committed to its success and it wasn’t just a quick flash in the pan decision.

White and his wife currently live in downtown Chicago, ironically walking distance from the Craft Brewers Conference which will take place the first week of April. For the first six months to a year after taking over, the Whites will spend about 75% of their time in northern California. All of the current staff and brewers will remain in place and no changes will be made to any of the recipes. The first year, some of the packaging may be changed and it’s possible some additional styles and/or special releases will be created.

The Boonville Beer Festival will be unchanged and the planning for it will continue apace and it will be held, as scheduled, on May 8. The Disc Golf Course will also remain on the brewery grounds.

While the brewery continues to hum along, White will turn his attention to what he knows best: marketing, merchandising and selling. He’ll immediately begin working to increase distribution and get Anderson valley beers into a greater number of chain locations, making it even easier for fans to find the beer in a wider array of outlets.

Ken will be the first to tell you that his passion for the brewery has not been 100% over the last few years and he’s been looking forward to taking a much needed rest from running the business. Ken had this to say, in the press release:

“I have enjoyed immensely growing the Anderson Valley Brewery from a start-up operating a modest brew pub in Boonville into a world class regional craft brewery. The people and friends I have made in the industry will last a lifetime. I want to thank the many customers and brewery fans who have become key parts of the Anderson Valley Brewery family.

I have looked long and hard for the right person to whom to entrust our legacy and I could not have found a better partner in Trey White. His passion and knowledge of the craft beer industry, coupled with his respect for the brands we have developed, will make him the ideal person to take the Anderson Valley Brewery to the next level within the growing craft beer industry.“

So I can’t help but think this will a positive step for everyone, from Ken Allen, the new owners and fans of the brewery’s beers. In talking with Trey White, he has that passion that can propel the brewery to the next level. He seems sincere in his reverence for the brands Anderson Valley has created over the years and has no plans to alter them in any way. He has the right experience and contacts to grow the business successfully while keeping it true to its roots. Let’s wish Ken a happy retirement and Trey good luck with his new job as a small brewery owner.

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The changing of the guard: new owner Trey White, at left, with founder Ken Allen in the Anderson Valley brewhouse.

Anderson Valley Brewery Sold

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There have been rumors floating around for a few months now, and it’s been no secret that owner Ken Allen has been trying to sell his Anderson Valley Brewery for several years. According to the North Bay Business Journal, it looks like a sale is now official. The terms have not been disclosed, but pending the necessary approvals, a sale is expected to close next month. The buyer is HMB Holdings LLC, a company created for the purchase by Trey White, a former VP with United States Beverage. In addition to the USB portfolio, White has also worked with such brands as Goose Island, SLO and Grolsch. Anderson Valley will continue to be brewed at its present facilities in Boonville, California.

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Odonata Website Launched

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Sacramento’s newest brewery, Odonata Beer. Co. — recently founded by formed Sacramento Brewing’s Peter Hoey and former DRAFT magazine beer director Rick Sellers — has just launched their new website, which for months has been essentially wallpaper. For updates, there’s also the brewery blog, too. You can also get a look at the now-approved label for what they hope will become their flagship beer, Saison Ale. It’s great to see things moving forward. Hopefully there will be beer to fill the bottles with those label very soon.

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