US: Brewers Association warns against beer tax hike

The Brewers Association has hit out a proposal to raise beer taxes in the US, warning it would “devastate” independent breweries while helping multinational rivals.

In a blog by the group's COO, Bob Pease, published by Washington newspaper The Hill, he warns against the measure floated by the Centre for Science in the Public Interest (CSPI) last month. Two CSPI members called for US legislators to look at raising tax on all alcohol and soda to help avoid the country's fiscal cliff.

In his response, however, Pease wrote: “Their (the CSPI's) proposal to increase the federal excise tax on beer would devastate – if not destroy – the small, independent Main Street American breweries that have developed all across our nation during the last 35 years and which have created thousands and thousands of jobs for American workers.”  

Currently, small brewers, defined as companies that produce less than 15,000 barrels annually, pay US$7 in federal excise tax on each barrel.

Pease added: “Do we really think that these small American brewers will be able to compete effectively, and grow and hire more workers, if the federal excise tax they pay increases from $7 per barrel to, say, $50 per barrel, as would be likely under the Jacobsen-Hacker proposal?

“Meanwhile, the large multi-national brewers – Anheuser-Busch InBev and MillerCoors – likely would be strengthened by such a change through reduction in competition.”

The potential revenue that would be raised from small brewers is “simply not justified by the economic harm such a proposal would cause”, Pease said. 

The US has more than 2,000 small and independent brewers, compared to around 40 in the late 1970s. 

Last month, the Brewers Association accused global beer companies of trying to “blur the lines” between the products they produce and "genuine" craft beers.