Congress Plans $321 Giveaway to Big Alcohol

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Created: Thursday, May 25 2017 19:14

Political junkies are already familiar with the term “reverse Robin Hood,” wherein fiscal policy seems to take money from the poor and give it to the rich. A bill currently before Congress, S. 236 / H.R. 747, elaborates on that theme with a “reverse Friar Tuck,” wherein those profits go to the richest alcohol companies at the expense of American citizens who have been impacted by drinking.

Alcohol Justice has detailed elsewhere how S. 236 / H.R. 747, aka the Craft Beverage Modernization and Tax Reform Act (CBMTRA), hides behind the lie of fostering small business growth. In fact, the benefits to small brewers and distillers are nominal. A new AJ report, however, gives dollar estimates of the industry giveaways. Among the most egregious fiscal giveaways:

• At least $321 million of lost revenue.
• $50 million to 7 “craft” brewers that produce over 2 million barrels annually.
• $128 million to distillers producing over 100,000 proof-gallons—250% more than distillers under 100,000 proof-gallons receive.
• $18 million lost in undermining a tax break meant to reward makers of lower ABV wines.
• An extension of credits meant for small wineries to those producing up to 620,000 gallons of wine.

“This dishonest federal measure is being portrayed as an incentive for small craft brewers,” said Bruce Lee Livingston, Executive Director/CEO of Alcohol Justice. “But the real winners are the largest beer and spirits producers in a race to cut their already ridiculously low tax rates.”

As significant as they are, these figures reflect only the giveaways for domestic alcohol production. Further language guts the government's ability to tax imports. Alcohol Justice has prepared a preliminary report on the financial impact of the CBMTRA, but has only scratched the surface. The organization urges everyone concerned with promoting public health to oppose this bill and stand up for public health.

TAKE ACTION to tell Congress to pick public health over Big Alcohol.

READ MORE about Alcohol Justice’s stand against S. 236 / H.R. 747.

READ MORE about the costs of this bill and the opportunities for charge-for-harm it takes away.

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Federal Giveaway to Major Breweries Makes "Craft" Beer Meaningless

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Created: Saturday, April 29 2017 17:52

What makes something a craft? Is it the painstaking effort put into making one-of-a-kind, irreplaceable objects or experiences? Is it the individuality of the craftsman, controlling every aspect of the process? Or is it the ability to generate a quarter of a billion dollars in yearly revenue while duping politicians with faux-rustic design aesthetics? Judging by S 236/HR 747—the Craft Beer Modernization and Tax Reform Act, a federal bill that seeks to “modernize” alcohol excise taxes the same way Ford would modernize its fleet by introducing a Model T—it’s the latter.

Alcohol Justice already criticized the act for offering a tax break meant to incentivize lower-ABV wine to vintners who make no such effort. But as befits a national bill, the Act takes a truly comprehensive approach to bad tax policy. The act seeks to offer a tax break to hugely wealthy brands such as Samuel Adams ($215 million in 2015) and Lagunitas ($200 million in 2015). These brewers traffic on craft-beer cache while enjoying economies of scale unmatchable by a local backyard hophead. Lagunitas is even going on a buying spree, obtaining other craft labels. But they still brew under 6 million barrels per year, the threshold set by the act to qualify for a break.

These are clearly not businesses that need help, especially not in an era when consolidation seems to inevitably lead to megabrewers able to wield formidable economic and political clout. Indeed, Lagunitas has already joined forces with international heavyweight Heineken. This bill will only accelerate the process, giving more spare change to these “mega-craft” operations to monopolize shelf space and buy out smaller labels.

Perhaps creating another wave of megalithic alcohol producers is what the bill’s sponsors (Democrat Ron Wyden and Republican Erik Paulsen) mean by “modernizing”. In every other way, the bill continues the steady degradation of federal charge for harm policies. The federal alcohol excise tax has remained the same since 1991, despite the Congressional Budget Office’s yearly suggestion that it be raised. Nonetheless, drinking costs the United States around $250 billion annually. If anything, that is the true craft in beer: its lobby’s meticulous ability to avoid responsibility or make amends for its products harms.

Update 4/9/2017: This story was originally posted on April 27, 2017. On May 4, 2017, Heineken completed its buyout of of Lagunitas, presumably rendering Lagunitas ineligible for tax breaks but further calling into question the significance of the term "craft brew."

TAKE ACTION to keep Congress from double-dealing on microbrewers and giving free money to Big Alcohol.

READ MORE about SB 236/HR 747’s reckless undermining of effective public health policy.

READ MORE about Charge for Harm.

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