Victory: Kentucky Passes Bill to Protect Three-tier System

• Print
• Email

March 11, 2015

Kentucky legislators passed HB 168 last week - a bill to prevent beer producers from owning distributorships and distributing their own products, ultimately strengthening the three-tier system of alcohol sales in KY. A-B InBev's defeat came despite its increased number of lobbyists and money spent to influence Kentucky legislators. The bill will compel A-B InBev to sell its two KY distributorships, including the Owensboro distributorship it acquired in September 2014.

A-B InBev's attempt and successful purchase of the Owensboro distributorship prompted strong opposition from public health advocates , independent distributors, craft brewers, and labor unions, and was a catalyst for HB 168. The bill garnered bipartisan support from legislative leaders including bill author and House Speaker Greg Stumbo (D-Prestonsburg), Senate President Robert Stivers (R-Manchester), State Senator John Schickel (R-Union), and Governor Steve Beshear. The governor has indicated that he will sign the bill .

More of the 12 states without such three-tier protection may soon follow suit. Tennessee has also proposed legislation that would close a loophole allowing brewers to own distributorships.

Alcohol Tax Increase Proposals - City & State

• Print
• Email

March 11, 2015

Two new proposals to increase alcohol taxes were recently introduced--one to mitigate alcohol-related harm at the local level, and one to address a major state budget deficit.

Boston City Council members Bill Linehan and Frank Baker have proposed legislation allowing the city to levy its own alcohol tax of 1 to 2% to pay for substance abuse and treatment programs. Kansas Governor Brownback has proposed raising the retail tax on packaged alcoholic beverages from 8% to 12%, to compensate for an expected $600 million budget shortfall.

Public health researchers in Boston pointed out that alcohol is undertaxed in Massachusetts, noting that cities should be allowed to establish their own alcohol taxes to cover local substance abuse treatment, crime abatement, health care, and other costs from alcohol. Alcohol-related harm costs the public approximately $0.75 per standard drink in Massachusetts, while the excise tax collected per standard drink is about 1 cent for beer, 2 cents for wine, and 5 cents for distilled spirits. Alcohol is also exempt from sales tax in the state.

Alcohol excise taxes in Kansas have languished since 1977, and drink taxes for bars and clubs have not been raised since 1979. (Small retail tax increases for such establishments were enacted in 2010 and 2014.) Alcohol-related harm costs $0.87 per standard drink in Kansas, while the average tax paid per drink is $0.02.

Increasing the price of alcohol with taxes and fees is an effective policy for reducing alcohol-related harm. But Big Alcohol and its trade groups such as the Distilled Spirits Council of the United States (DISCUS) and the Beer Institute spend millions lobbying against the most effective alcohol policies that improve and protect public health.

Click here to see more legislative activity for federal and state proposals re: alcohol taxes.