no-beer-tax-yoI recently spoke with Mark and Laura about House Bill 2461 and the proposed increase in beer taxes. Here are the important points that we need you to know about this bill, which has the potential to severely damage the Oregon craft brewing industry:

– Supporters of the bill argue it will increase costs about 15 cents per glass of beer. But what isn’t being communicated is that the cost is levied against the producer of the beer, not the consumer, which effectively makes this an excise tax, not a sales tax. In fact, Laura said the tax per barrel is currently about $2.60 and would increase to about $49 on a barrel that currently costs $270 ($135 per keg) wholesale.

– Consider that the price of a keg will have to increase accordingly to accommodate the higher cost, distributors, bars, and retailers will all be increasing price as well. By the time the increases reach the consumer, the cost of that glass of beer has actually increased as much as $1 to $1.50! This domino effect continues as beer sales decline and other costs increase unrelated to beer to make up for the lost revenue. As consumers react to the increase by buying less beer, entire businesses related to those supporting the sale of beer are affected.

-The tax unfairly targets only beer producers in Oregon to support funding for alcohol and substance abuse. A more acceptable solution would tax producers of wine and spirits as well.

As Mark said later, “If it were really only 15 cents per glass, I’d be in support of it too. But it’s a badly publicized misconception that must be corrected before Oregon’s craft brewing industry is devastated.”

Here is what others are saying about the increases:

From an OPB article titled Brewers Can’t Bear Beer Tax Proposal:

Right now, Ettinger [owner of Hopworks Urban Brewery in Portland] says the tax equals about five percent of the cost of producing it.

He says the new tax proposal would send that through the roof.

Christian Ettinger: “It would represent the single highest cost to us as a beer producer. Higher than labor, higher than the cost of ingredients. It’s significantly higher and would really impede our ability to grow in this state.”

From the Gazette Times article, Tax would flatten Oregon microbreweries:

Whenever someone proposes to increase the taxes on something by 1,900 percent, expect to see words such as “safety” and “health” welded to the idea. Otherwise, it would obviously strike the public as outrageously greedy.

From KGW’s Website, Beer lovers line up against hefty tax at Salem hearing:

“We could see a $2.50 to $4 a six-pack (price) increase,” said Kurt Widmer of Widmer Brewing Co., one of the state’s largest microbrewers. “Beer drinkers, whether you want to argue the math or not, will pay an increased amount at a time they are all suffering as we are.”

Laurelwood Public House & Brewing Co. owner Mike De Falb said it was unfair that wineries and liquor distillers did not face a higher tax. He also said the tax should exempt smaller breweries like his own, as previous versions of the legislation have done.

If you would like to keep up with news about HR 2461 from a craft brewery perspective, check out Beervana, Brewpublic, and the Oregon Brewers Guild websites.

To tell your legislators that you oppose an increase in beer taxes, the Oregon Brewers Guild suggests the following actions:

1. Write your legislator – This may sound like something you’d hear from your grandmother, but nothing has a stronger impact on legislators than getting a good old-fashioned piece of snail mail. Take a peek at our template letter then customize and send your own version. You can find your legislator at http://www.leg.state.or.us/findlegsltr/ and a list of Revenue committee members at http://tinyurl.com/crw2gj.

2. Get social – The Oregon Brewers Guild has created several social networking applications devoted to connecting consumers opposed to House Bill 2461. These groups are a vital online community and help spread the word when news and events happen. We’re on Facebook (http://tinyurl.com/d6×6sn) and Twitter (http://twitter.com/NoNewORBeerTax). Sign up. Tell your friends.

3. Sign the petition – The Oregon Brewers Guild is collecting signatures for an electronic petition against HB 2461. This might seem self explanatory, but the more signatures we’re able to collect, the bigger the impact on legislators. You can sign it here http://bit.ly/8rB0Y. After you’ve signed it, you can generate additional support by sending a link to your friends and posting the URL on websites and/or forums.

Thank you for taking the time to hear the truth about this house bill. Sincerely,

Calapooia Brewing