Will Lawmakers Bump Samuel Adams From “Craft?”

imageFrom MarketWatch:

However, on June 11, Sen. Ron Wyden, a Democrat from Oregon, introduced the Craft Beverage Modernization and Tax Reform Act (S. 1562) that would not only cut excise taxes imposed on brewers, but would finally settle who’s a craft brewer and who isn’t. The text of that bill hasn’t been released yet, but the folks at the Beer Institute, a Washington, D.C.-based beer industry lobbying group, spelled out three of its key effects.

1. It reduces the federal beer excise tax to $3.50 per barrel on the first 60,000 barrels produced by domestic brewers producing fewer than 2 million barrels annually.

2. It cuts that same tax to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers.

3. It maintains the current $18-per-barrel excise tax for any barrels beyond 6 million.

How does this clarify anything, you ask? Simple. Just by the numbers, the folks getting the deepest discounts are those producing 60,000 barrels or fewer a year. Those are your small craft brewers, and they are legion. In Washington state, for example, there were 256 breweries in operation in 2014, second only to the 431 in California. Of those breweries, only one — Redhook in Woodinville, Wash. — topped 60,000 barrels. While Redhook pushed out nearly 150,000 barrels in 2013, second-place Georgetown Brewing in Seattle produced only 52,000. In a corner of the industry in which the smaller players regularly have to compete with larger craft brewers for resources and shelf space, defining “small” is no minor task.

In the craft beer world, that leaves just a few players on the outside looking in. Boston Beer Co. produced 4.1 million barrels of Samuel Adams, Angry Orchard cider, Twisted Tea, Travelers Shandy and other beverages, but crossed the 2 million barrel threshold on beer alone more than five years ago. Yuengling, meanwhile, makes more than 2.7 million barrels of beer and would also be excluded. The third brewer in that gray area — North American Breweries and its Magic Hat, Portland, Pyramid and Genesee — was out of BA’s craft club for importing Labatt’s from Canada, but produced nearly 2.6 million barrels of its own as recently as 2013.

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