The Politics of Beer, the Beer Wars, Protectionism and the Ferocious Beer Taxes

Beer wars and beer taxes are nothing new and they've been around a long time.  Although they manifest themselves in a variety of ways, the end game is to stiff the beer drinking little guy.  How beer drinkers get stiffed:

1.  Wealthy and influential families lobby state legislatures for exclusive monopolies.

How Your Beer Bought John McCain's $500 Loafers Reason.com

Uncovering the government subsidies behind Cindy McCain's family fortune

McCain (he of the eight houses, 13 cars, and $500 loafers) has never been shy about laying into what he feels are the excesses of capitalism, including the way lobbyists can bribe lawmakers to jigger the system to their liking. The problem for McCain is that the fortune he married into came by way of alcohol wholesaling, an industry that isn’t remotely free market, is awash in excess, and that wouldn’t exist were it not for rigorous system-jiggering from high-powered lobbyists.

When McCain married his second wife Cindy Lou Hensley in 1980, he became one half of a very wealthy household. By some estimates, Cindy McCain’s stake in her family’s Hensley & Co. beer distributorship puts her net worth around $100 million.

2. Big beer manufacturers lobby to keep out the competition of small breweries and to guarantee their highly profitable monopolistic market share.

Anheuser-Busch InBev roars against craft breweries bill in Texas legislature

Because it is “only” about beer and not regularly taken too seriously, citizens sometimes deny themselves the exquisite pleasure of watching money and power manipulate politics in the state Legislature.

Take a little bill, HB 602 by Jessica Farrar, D-Houston, which passed unanimously in the House in late April. The bill would allow small craft breweries in Texas to sell token amounts of their beer in their breweries in the same way Texas wineries have for years been allowed to sell a bottle or two of wine to visitors after a tour.

What’s the difference, you might ask. Why would an emissary of the largest brewing company in the world take time out of an undoubtedly busy schedule to come before a state Senate committee, as reported today by the Houston Chronicle, to voice his objection to a few breweries selling in a year what would amount to a infinitesimal fraction of one day’s production?

3.  Government loves taxing beer. Heck, Oregon actually attempted to pass a 1900% beer tax increase.

Oregon Beer Tax Of 1,900 Percent Proposed, Sparks Outrage  The Huffington Post

Beer brewers are warning that a proposal by five Oregon state lawmakers to tax each barrel of beer by a whopping 1,900 percent would essentially put them out of business. Oregon is facing a budget deficit and the lawmakers claim that the money will also go to treating alcoholism and prevention.

Brewers worry that the end of low taxes could cripple them...

Folks in Oregon had a hissy fit over the proposed beer tax and it died.   An anti-beer tax group in Oregon reported that “Beer taxes are inherently regressive – more than half of the proposed increase would be paid by Oregonians earning less than $45,000 per year”.

At any given time, the states and/or Fedzilla are contemplating raising beer taxes.

In 2009, the Democrats and the Obama Administration were attempting to increase beer taxes.

Stop the Proposed Increase of Federal Beer Tax

$1 per case excise tax increase will typically cost the consumer at least $1.69 due to successive mark-ups as the case moves from brewer to wholesaler to retailer.

Besides the typical beer monopolies, big beer lobbying to protect its monopolies while lobbying to crush small brewers, and the states and Fedzilla lusting to increase beer taxes, another significant beer issue is pending in Congress.  The Hill reports:

Beer fight brewing over taxes

There’s a tax fight brewing between large beer companies and their smaller craft brethren on Capitol Hill.

The Beer Institute, which includes member companies such as Anheuser-Busch and MillerCoors, plans to “actively oppose” the Small Brewer Reinvestment and Expanding Workforce, or Small BREW Act, this year.

The Brewers Association — essentially the trade group for craft brewers — is lobbying for the bill, which would reduce the federal excise tax on beer from small producers.

Chris Thorne, vice president of communications for the Beer Institute, says his trade group has dropped its neutral stance on the legislation because it divides the industry.

“We are going to actively oppose this legislation,” Thorne said. “If the entire industry is unified and has one ask, we stand a far better chance of succeeding than when we have multiple bills to push.”

Thorne said his group opposes any tax increase on beer, but that all of the industry should unite behind one bill: the Brewer’s Employment and Excise Relief (BEER) Act, which is expected to be introduced later this year and would reduce excise taxes on beer produced by brewers large and small.

This is a situation where small beer brewers are asking for tax relief and special tax treatment to give the small brewers a competitive advantage over the big beer producers.  The Big Beer Gang never complained about beer taxes so long as they were the exclusive beer players.  Now that the beer industry is changing as small breweries and their superior products become more and more popular, the Big Beer Gang is suddenly lobbying to reduce all beer taxes and create a level playing field at the federal level.

I think I need a beer!