July 22, 2014 SIGN IN | REGISTER
Join the Roll Call Book Club July 23 for a discussion with Brigid Schulte, author of "Overwhelmed." Click here to register.

Butcher: A Growing Economy Is Brewing

When small and independent American craft brewers pour into the nation’s capital Tuesday for the 30th annual Craft Brewers Conference & BrewExpo America, D.C., Maryland and Virginia residents will get a firsthand look at one of the country’s fastest-growing employment sectors.

The country’s craft-brewing community will meet not only for inspiring dialogue on the craft-beer revolution but also to discuss ways to grow their small businesses while creating additional jobs and continuing to engage their consumer fan bases. More than 2,000 breweries are currently operating in the U.S. — the most since the late 1800s — and they are responsible for employing more than 100,000 workers. They are our neighbors, our families and our friends.

Craft-beer production is also burgeoning. In 2012, craft-beer volume hopped 15 percent, while dollar growth increased 17 percent, according to the Brewers Association, the not-for-profit trade association dedicated to small and independent American brewers.

As small breweries work to create jobs, attract tourism and support local neighborhoods, we must recognize they are not immune to the host of issues experienced by all small businesses. Brewers face looming increases in essential expenditures: Costs of grains have increased dramatically because of ethanol production. Rising fuel prices harm brewers because their raw ingredients and finished products are heavy, adding high freight costs to the cost of production and distribution. And they face these rising costs in one of the most, if not the most, highly regulated and taxed industry sectors in the country.

Like other small businesses, craft brewers need a tax code that helps them to expand, allowing them to remain competitive in the marketplace, protect existing jobs and stimulate new employment opportunities quickly.

A bill is currently being considered in Congress that would help small brewers do just that. The Small BREW Act seeks to recalibrate the federal beer excise tax that small brewers pay on every barrel of beer they produce.

Under current federal law, brewers making less than 2 million barrels annually pay $7 per barrel on the first 60,000 barrels they brew and $18 per barrel on every barrel thereafter. The proposed legislation would create a new rate structure that reflects the evolution of the craft-brewing industry.

The rate for the smallest brewers and brewpubs would be $3.50 per barrel on the first 60,000 barrels. For production of 60,001 to 2 million barrels, the rate would be $16 per barrel. Any brewer that exceeds 2 million barrels would begin paying the full $18 rate. Breweries with an annual production of 6 million barrels or less would qualify for these tax rates.

To put this into perspective: Anheuser-Busch InBev produces about 100 million barrels of beer in the U.S. and more than 300 million worldwide. The largest U.S. small brewer produces about 2 million barrels, less than 2 percent of the production of the largest multinational brewer. Most small brewers and brewpubs produce 2,000 to 20,000 barrels.

comments powered by Disqus

SIGN IN




OR

SUBSCRIBE

Want Roll Call on your doorstep?