Blog: Chris MercerCraft beer's success poses taxing question

Chris Mercer | 6 January 2011

Most Americans live within ten miles of a craft brewer, according to the Brewers Association. There are more craft brewers in the US than at any point since Prohibition.

The sector is enjoying a purple patch with the sort of hip, young Americans that Budweiser and its talking frogs used to consider their own. There is no doubt that a lot of craft beer's success is down to the passion of brewers and a considerable consumer awakening, but there is also an important financial springboard in the form of tax breaks.

As the larger craft brewers reap their rewards for years of perspiration in pokey brewhouses, the tax elephant will cast a bigger and bigger shadow in the corner of the warehouse.

This week, the Brewer's Association announced that it has tripled the production cap for craft brewers to 6m barrels per year, thus keeping the likes of Boston Beer Co in the club. It is also lobbying the US Senate to approve a bill that would offer tax breaks to brewers in-line with the new production cap.

When you consider that Anheuser-Busch InBev produces around 300m barrels of beer globally, 6m barrels is hardly the big-time.

The question is, is 6m too high for a tax barrier? Have brewers who attain close to this figure achieved enough critical mass to compete without state protection? These are questions that will dog the craft brewing sector if consumers continue to slug its beers.

 


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