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Congress Plans $321 Giveaway to Big Alcohol

The Reverse Friar TuckPolitical 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.”

Alcohol Justice has prepared a preliminary report on the financial impact of the CBMTRA. 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.

Federal Giveaway to Major Breweries Makes "Craft" Beer Meaningless

6 million barrels of beer on the wall, 6 million barrels of beeeeeerWhat 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.


4 A.M. Last Call Bill Stalls, Opponents Rallying

last call bellOne by one, Californians are raising their voices to oppose SB 384, Scott Wiener’s bill to strip away community last-call protections. The bill, which distorts the concept of “local control” over bar closing times to appeal to big-bucks nightlife and hospitality interests, was slowly progressing through the legislature, but may have hit a roadblock. In a powerful op-ed in the Sacramento Bee, Patrick R. Krill, an attorney, advocate, and licensed drug and alcohol counselor, makes the argument that it should stay there.

Mr. Krill explains that alcohol harm costs California $35 billion per year, more than any other state, even while California refuses to raise alcohol excise taxes. In addition, he points out that “the proposed legislation also seems to absurdly suggest that local communities exist in hermetically-sealed isolation from one another, and that the late-night activities in one will not have a direct effect on others. In the state with the most licensed drivers in the country, and many sprawling urban areas that contain numerous contiguous ‘communities,’ any notion that closing times for bars should be a local matter amounts to nothing more than distractive window dressing on an otherwise dubious proposal.”

Currently, the bill rests in the suspense file, after the Senate GO found that it would cost an additional $1-$2 million yearly to ABC alone over the first two years—never mind the ongoing financial hit individual communities would take in enforcement and stress to the emergency medical systems. However, the suspense file may not be enough.

“It’s good to see this bill not moving forward,” said Michael Scippa, public affairs director at Alcohol Justice, “but it needs to be stopped, turned back, and torn apart. It was an obviously bad idea from the get-go.” Alcohol Justice urges concerned California citizens to bury SB 384 and protect common-sense alcohol regulation.

TAKE ACTION to tell your CA Assembly member to make sure Sen. Wiener's bill gets bounced.

READ MORE about SB 384 backers’ soulless exploitation of the Ghost Ship victims.


Congress Abuses Tax Break Meant to Reward Responsible Wineries

Alcohol legislation in a nutshell (better pun if we had used the shell game as a metaphor)U.S. Congress likes to play three-card monte with regulations, daring its constituents to find the reckless industry giveaways that are shifted around under the surface of innocuous legislation. So it is with HR 747 the Craft Beverage Modernization and Tax Reform Act of 2017—a bill which would seem meant to give small artisans a leg up, but actually increases the number of dangerous products on the market.

The Craft Beverage Modernization Act is nothing new. It’s a repackaging of the a bill with the same name from 2015, which never made it out of committee. On its face, the bill drastically cuts taxes on brewers, vintners, and distillers. This alone undermines the United States’ ability to recoup alcohol-related costs through Charge for Harm legislation. However, buried in the bill is a particularly egregious red queen.

Currently, wine manufacturers enjoy a tax break if they produce wine under 14% ABV. This bill would extend that break for wine up to 16% ABV. While this is a simple change on its face, it betrays the public trust. Since the break is meant to incentive vintners to keep their alcohol content low—even though many wines are “naturally” higher—it increases the prevalence of higher alcohol wines overnight. The same “just a glass” become about 15% stronger. Moreover, this is not reducing a tax burden, it’s extending a tax break. It is taking what is essentially a reward for making products with the public good in mind, and giving it to manufacturers who make far less of an effort.

Bill co-Sponsor Ron Wyden (D-Oregon) claims that booze manufacturers “face the unfair burdens of Prohibition-era rules and taxes,” but this seems improbable since alcohol sales were entirely illegal during Prohibition. Indeed, policies like the moderate-ABV wine incentive produce no burden at all.

“The industry is already obsessed with unnecessarily high ABV products,” said Alcohol Justice Public Affairs Director Michael Scippa. “There’s no sane reason to remove an effective economic brake on this alcohol content race.”

Just like in 2015, this bill seeks to reward an industry that has done nothing to deserve it, and has no reason to change.

READ MORE about Charge for Harm.

READ MORE about pending alcohol tax legislation throughout the U.S.