Small brewers are facing an imminent and extremely serious threat to their businesses. The consequences of remaining silent have the very real potential of reducing your choice of beer and dramatically increasing the price of any beer that you purchase.
The Senate Finance Committee in Washington, DC is currently considering a proposal to increase and equalize the excise tax for alcohol beverages as part of healthcare reform deliberations. This proposal would triple the excise tax for 4.5% ABV beer and impose even higher excise tax rates for higher ABV beers.
If such a proposal becomes reality, there is no question that many small brewery businesses will suffer, some will close and consumers will face higher prices and diminished choice in the marketplace.
Our Senator John Cornyn is on the Senate Finance Committee.
Write Cornyn to express your opinion on this higher excise tax.
Use this contact form to send him a message:
You can simply copy and paste and sign the end of the following:
Dear Senator Cornyn:
The reform of America’s health care system is a vital issue facing our nation and our people. I would like to focus on one particular policy option raised by the Committee: the option proposing an increase in federal excise tax rates. I am supporting the Brewer’s Association in the belief that this option would have a devastating impact on small brewers, inevitably leading to lost jobs in communities all across America and the closure of many small breweries. Furthermore, this proposal directly contradicts the widely supported, bipartisan legislation introduced in both the House and Senate that seeks to reduce the excise tax for small brewers.
As this debate moves forward, I urge you to reject this particular policy option. Higher excise taxes are a recipe for creating a ripple effect for economic recession. The consequences will be less innovation, fewer products in the marketplace, less beer bought by consumers, further job loss and increased business risk for a long chain of struggling businesses – including barley farmers, hop growers, equipment and supply manufacturers, distributors, delivery truck drivers, retailers, restaurants and pubs. Increasing federal excise taxes would do little to raise the revenue necessary for health care reform.
I want to thank you for giving me this opportunity to comment on this policy option.
More information about issues of importance to small brewers - excise taxes:
* $1 per case excise tax increase will typically cost the consumer at least $1.69 due to successive mark-ups as the case moves from brewer to wholesaler to retailer.
* Small brewers are small Main street businesses, typically employing 10 to 50 employees.
* Small brewers represent only 4% of the entire U.S. beer market by volume, with 95% of them being very small businesses (producing 15,000 barrels or less per year).
* Proposals to increase and equalize the tax among all types of alcohol will tax small brewers at the highest rates because their specialty, gourmet and innovative beers typically have higher alcohol contents.
* Brewers already pay a disproportionately higher share of taxes compared with other products - federal, state and local taxes represent over 40% of the retail price for beer while the same taxes equal nearly 24% of the price for all other purchases.
* Higher taxes will worsen the economic recession - resulting in less competitive products, reduced sales and revenues, lost jobs and, for some small brewers, business closures.
* Many small brewers are struggling to deal with the consequences of the 2008 spike in ingredient and operational costs.