Craft Beer Battle Brewing In Washington

by Kenny Leon

Craft beer has been battling the powers of St. Louis and Milwaukee for years now as made evident in a recent Super Bowl ad from Budweiser. The $9 million one minute ad mocked the craft beer craze and proudly proclaimed itself a “macro beer.” But it’s not beer “to be fussed over,” the spot said. The two big players in the market, Anheuser-Busch InBev and SABMiller have been fighting with craft brewers around the country over issues such as market access and distribution, as well as franchising regulation. And now craft brewers are preparing to take the fight to Washington D.C.

The Brewers Association, the 10 year old lobby for the beer industry, has hired its first full-time “federal affairs manager” in Katherine Marisic to push for legislation that will cut taxes that the small brewers say are keeping them from competing fairly with the Budweisers and Miller Lites of the industry. “I have always been very interested in craft beer. I know that makes me the same as pretty much everyone in the country. I am a tiny bit involved with one of the local D.C. brewers, Atlas Brew Works. It’s been great watching craft breweries make such an impact in the district.”

The Brewers Association aims for legislation that will change the excise taxes for small and independent breweries which will accommodate the rebirth of small, local breweries and brew pubs. As the law stands right now brewers that make less than 2 million barrels annually must pay $7 per barrel for the first 60,000 barrels and it jumps to $18 for anymore than that.

The Brewers Association is fighting to change this through support of the Small Brewer Reinvestment and Expanding Workforce Act (Small BREW Acct) which has been introduced by Senator Benjamin Cardin of Maryland and Susan Collins of Maine which is aimed at producing a tiered system of taxes for small brewing companies across the country. The Cardin-Collins bill would adjust the current tax rates by requiring brewers to pay $3.50 for the first 60,000 and $16 for barrels between 60,001 and 2 million. For production over 2 million, brewers would continue paying $18 per barrel. There is a House version of a similar bill that has also been introduced by Steve Womack of Arkansas and Ron Kind of Wisconsin which wouldn’t place any tax on brewers for the first 7,143 barrels and $3.50 per barrel for anything more than that up to 60,000.

This is a great step for the small brewers and sign of the changing American beer landscape says the CEO of the Brewers Association, Bob Pease. He believes that the popularity of craft beer and tailored flavors has led to an increase of economic value for small brewing companies. The craft beer industry is a laissez-faire free market lover’s dream. Pease says that, “It’s a very exciting time to be in the American craft beer community, and that’s because of everything that the beer drinker is demanding. This is all being driven by the beer drinker.”

Research done by the Brewers Association has shown proof behind Pease’s words.

In 2013, they claim that the craft industry volume rose 18% from the previous year and that revenue had increased by 20%. Mr. Pease believes that lowering taxes for smaller breweries would mean more growth and more jobs, “Our bill is a jobs-creation bill, and we’re confident that our members will take that money, reinvest into their business, grow their production and hire more workers.

Katherine Marisic has acknowledged the economic benefits of the beer industry, and of the need to foster these breweries to create more jobs and increase market competition, “I think that the reception on Capitol Hill has been very positive. People have been interested in creating jobs, interested in the impacts that craft brew has in their communities.”

These are all positive signs in an era when the government is constantly seeking ways to regulate business to make it “fairer” for the little guys. We should let the beer industry continue to pave this path, where it is truly dictated by what the beer drinker wants in their beer. That in itself will force the big companies to adapt and adjust to compete. Market competition is a great thing too, because it will drive innovation in an effort to outdo their competitors. Who can truly argue with having better beer?

This is one political battle that I’m sure I’m not the only one who would be happy to join in on; one bottle at a time.

[divider]Author’s Bio[/divider]

Kenny Leon is a geospatial analyst for Northrop Grumman where he analyzes foreign cultures, and helps create solutions for peaceful interaction. He has a Bachelors of Arts in geography and history from Stephen F. Austin University where he led grassroots anti-war movements and fought against wasteful spending by the university’s administration.

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