National Issues

UPDATE: Small Brewer Graduated Excise Tax Rate Legislation.

Bipartisan legislation seeking a graduated beer excise tax rate of $3.50 and $16 for domestic small brewers continues to gain support in both chambers of Congress.  In the House, H.R. 4278 currently enjoys the support of 81 U.S. Representatives, while Senate Bill 3339 has the support of 13 U.S. Senators.

The legislation seeks to cut the small brewer rate on the first 60,000 barrels by 50 percent to $3.50/barrel and lowers the tax rate by two dollars to $16 per barrel on beer production above 60,000 barrels up to 2 million barrels.  Breweries with an annual production of 6 million barrels or less would be eligible for these reduced rates.

The Brewers Association has developed a resource page with the information and tools small brewers need to make the case to their federal elected officials for supporting these tax relief measures.

Brewers Association Issues H.R. 5034 Position Statement.

The Brewers Association has issued a formal position statement in opposition to The Comprehensive Alcohol Regulatory Effectiveness Act of 2010 (H.R. 5034).  The legislation, advocated by the National Beer Wholesalers Association (NBWA), seeks to strengthen state control of alcohol regulation through a variety of means, including addressing what NBWA sees as a growing number of court rulings undermining states’ regulatory primacy on alcohol issues.

American Craft Beer Week Recognized by Feds.

The U.S. House of Representatives has passed House Resolution 1297, recognizing the both the goals of American Craft Beer week and the economic contributions of America’s small brewers.  Introduced by Representative Betsy Markey of Colorado, the resolution received the support of 65 other Representatives before passing the House by voice vote.

 

State Issues

DISTRIBUTION AND FRANCHISE

Pennsylvania
The Malt Beverage Distributors Association of Pennsylvania has collected 65,000 signatures in a statewide petition drive to allow distributors to sell six packs.

Washington
A petition drive is underway in Washington State to privatize the sale of liquor. The consumer group Modernize Washington is collecting signatures prior to the July 2 deadline to ensure that Initiative 1100 is placed before the state’s voters on the November 2 ballot.

TAXATION

Massachusetts
The House has failed to act on legislation repealing last year's budget provisions raising the sales tax from 5% to 6.25% and removing the sales tax exemption on alcohol.

TRADE PRACTICE & OTHER

California
Passing the Assembly and receiving favorable committee consideration in the Senate, A.B. 2134, the California Small Brewers Association-sponsored Beer Maker Dinner bill, would allow licensed brewers to conduct and participate in events called "Beer Maker Dinners" for consumers held at restaurants that purchase a brewer's products featuring craft beers paired with food.  This measure creates a tied-house exception similar to one in existing law for winemakers.

Delaware
Passing the House, House Bill 447 is meant to encourage tourism at Delaware-licensed microbreweries.  Current Delaware law permits an individual to have an interest in up to two brewery-pubs and a microbrewery, but under a strict reading of the statute the individual could only sell for consumption off of the premises at two of the three licensed premises.  This bill makes clear that this limitation does not apply to microbreweries and brewery-pubs.  Additionally, following the federal small brewer production threshold, the bill would allow microbreweries to brew up to 2 million barrels with the hope that this could attract larger microbreweries to Delaware.

Louisiana
Passing the House and receiving initial Senate committee approval, House Bill 1484 would create a free three-day permit, allowing the possession, serving and consumption of homemade beer, mead and other fermented beverages at businesses licensed for on premises consumption of alcohol. This provision allows homebrew clubs to legally hold club meetings, competitions and other organized events at bars, restaurants and other licensed establishments.

New Jersey
Senate Bill 1904 joins Assembly Bill 2591, the "New Jersey Grocery Store Economic Development Act," in seeking to increase the number of retail licenses that a person may acquire when the license or licenses are used in connection with the operation of a retail food store, or in connection with the operation of a liquor store when the licensee certifies that at least 90 percent of the store’s annual sales are alcoholic beverages.  Current law prohibits any person or corporate entity from holding more than two retail licenses to sell alcoholic beverages.

New York
After being introduced in 2009, companion bills A.B. 7151 and S.B. 3246 are once again under consideration. The legislation would permit those with licenses to sell beer or wine products for consumption off premises to provide beer samples in their licensed establishments.
Relating to alternating proprietorships, S.B. 6970 allows for premises including space and equipment to be rented by a licensed tenant brewer and allows for brewers to manufacture produce, blend, package, bottle, purchase, sell and deliver alcoholic beverage beverages.

South Carolina
Signed into law by the Governor, House Bill 4572 allows the holder of a retail permit for the sale of beer for off-premises consumption whose primary product is beer or wine to conduct not more than twenty-four beer tastings at any one retail location in a calendar quarter.  The bill additionally allows a brewery the ability to serve samples of 4 brands and sell up to a case equivalent (288 ounces) per person per day.

Overview

SELF-DISTRIBUTION
The American consumer should have access to the widest range of domestically produced beers made available by licensed breweries. The success or failure of a beer should depend on consumer demand, rather than artificial barriers to distribution.   The absence of a willing and/or viable wholesaler should not prevent a small brewer's products from reaching a retailer who is willing to sell them.

We support state laws that respect and enhance consumer choice in the marketplace. We believe that to provide the greatest ongoing choice for consumers, small brewers need the right to act as their own wholesaler and be allowed to distribute to retailers. Such brewers should be subject to all laws and taxes applicable to both brewers and wholesalers.

FRANCHISE LAWS / ACCESS TO MARKET
We believe that small brewers and wholesalers should be free to establish enforceable contracts between the parties that both parties agree are fair and equitable. Franchise laws were enacted to protect wholesalers from the undue bargaining power of their largest suppliers. Applying those laws to relations between small brewers and wholesalers is unfair and against free market principles.

Where franchise laws exist, we believe that any brewer contributing less than 20% of a wholesaler's volume should be exempted from those laws and free to establish a mutually beneficial contract with that wholesaler. Without the leverage inherent in being a large part of a wholesaler's business, a small brewer and wholesaler can negotiate a fair contract at arm's length.

INDEPENDENT WHOLESALERS
We support the independence of wholesalers and believe independent wholesalers are wholesalers who are contractually and economically free to allocate their efforts among the brands they sell without the undue influence of their largest suppliers.   Each brand gets the attention it deserves on its own merits in the marketplace.

EXCISE TAXES
The Brewers Association opposes excise taxes on beer as a matter of public policy. The taxes are paid by small brewers whether or not they are profitable. They are also paid by consumers regardless of income level and are historically very regressive taxes. The total amount of excise taxes paid on beer exceeds the total amount of profit in the brewing industry. Newly proposed excise taxes earmarked to fund substance abuse programs do not recognize the positive and healthful benefits of beer consumption for the vast majority of beer drinkers. Furthermore, there have been billions of dollars of excise taxes already collected that could be used to fund such programs.

UNDERAGE DRINKING & DRIVING UNDER THE INFLUENCE
Responsible enjoyment of beer can be part of a healthy lifestyle. The Brewers Association strongly opposes illegal use of our products such as underage drinking and driving while under the influence. We, as brewers, are offended by those who misuse our products. We promote education on responsible enjoyment of craft beer through programs, such as the Savor the Flavor program.