Beverage Alcohol Producers Set Sights on Permanence
Washington, D.C. • February 06, 2019 – The Craft Beverage Modernization and Tax Reform Act (CBMTRA) was reintroduced in the U.S. Senate today with strong support from a broad group of industry trade associations including the beer, wine, spirits, and cider sectors.
The legislation, which was first introduced in 2015 to recalibrate federal excise taxes and streamline regulations on alcohol beverage producers, was reintroduced in 2017 by Senators Ron Wyden (D-OR) and Roy Blunt (R-MO), garnering strong support from the majority of Congress as well as industry groups. Legislation that included a two-year provision of CBMTRA passed in December 2017. Senators Wyden and Blunt are once again the lead co-sponsors of the bill upon its reintroduction today.
“People around the world enjoy Oregon wine, craft beer, cider and spirits—providing not only a serious source of home state pride but also a huge boon to our state’s economy,” Wyden said. “By modernizing burdensome rules and taxes for craft beverage producers, this legislation will level the playing field and allow these innovators to further grow and thrive.”
“The craft beverage industry is driven by small businesses that support thousands of jobs and contribute billions in economic output,” said Blunt. “This bill will remove tax and regulatory barriers that are making it harder for Missouri’s brewers, distillers, and winemakers to grow and compete. I’m encouraged by the strong, bipartisan support this measure had in the previous Congress and look forward to working with our colleagues to get it to the president’s desk.”
Leaders from the Brewers Association (BA), Beer Institute, WineAmerica, Wine Institute, Distilled Spirits Council, American Craft Spirits Association, and U.S. Association of Cider Makers agree that the legislation creates a more fair and equitable tax structure for beverage alcohol producers and their consumers. The legislation empowers these key economic players to continue to invest in their businesses and boost jobs across the country.
“Small and independent craft brewers are grateful for the ongoing bipartisan support for the Craft Beverage Modernization and Tax Reform Act,” said Bob Pease, president and CEO of the Brewers Association. “The legislation is not just economically smart but enables Main Street brewers to do what they do best: create and innovate. Our brewers can be found in every state and employ more than 135,000 Americans. They are at the heart of what makes small businesses so important to the nation’s greater economy. We remain hopeful that this legislation will be made permanent to support the small brewers of today and tomorrow.”
“I want to thank Senators Blunt, Portman, and Wyden as well as numerous members of Congress from both sides of the aisle and across the country for their continued commitment to providing excise tax relief to all of our nation’s brewers and beer importers,” said Jim McGreevy, president and CEO of the Beer Institute. “Since our nation’s inception, brewers and beer importers have been integral to our national fabric. Today, America’s beer industry continues to be a crown jewel in our nation’s manufacturing sector, supporting more than 2.2 million good-paying jobs and pouring more than $350 billion into the national economy. Making federal excise tax relief permanent for our nation’s brewers and importers will enable them to continue to innovate, invest in their businesses, support jobs, and give back to their communities.”
“The American wine industry generates more than $220 billion annually for the American economy through investments, jobs, tourism, and taxes,” said Jim Trezise, president of WineAmerica. “The Craft Beverage Modernization and Tax Reform Act enhanced our industry’s ability to contribute even more by channeling tax savings into purchases of new equipment, additional employees, increased wages, expanded distribution, and facility enlargements. The wine business is highly competitive, capital intensive, and labor intensive, so having extra funds available provides a real boost to our industry’s growth. We are deeply grateful for the original legislation, and respectfully urge that it be made permanent.”
“Without a doubt, CBMTRA is having the intended positive effect on wineries all over the country,” said Bobby Koch, president & CEO of the Wine Institute. “Wineries are using the tax savings to invest in the future growth of their businesses, and in doing so, are supporting their families, their employees, and their communities.”
“The Craft Beverage Modernization and Tax Reform Act marked the first federal excise tax reduction for distilled spirits since the Civil War and enabled distilleries to invest back into their businesses and communities across the United States,” said Distilled Spirits Council CEO Chris Swonger. “Making this legislation permanent would provide stability for distillers in moving forward to generate new jobs and support local agriculture and tourism.”
“Federal excise tax reform has dramatically helped to stimulate craft spirits growth, and a permanent relief is critically important to securing the future of our industry,” added Margie A.S. Lehrman, CEO, American Craft Spirits Association. “As of August 2018, the number of active craft distillers in the U.S. had grown by 15.5% over the last year to nearly 2,000, yet without permanent and immediate reform, the stability of this vibrant industry is bound to be paralyzed. Without the certainty of a long-term reduction, it is impossible for any new or existing distillery to implement a business plan when the wide tax variable threatens the ability to hire new employees, purchase equipment, provide staff benefits, and continue to grow.”
“Regional-brand cider sales increased 22 percent last year, and more than 100 cideries opened their doors for the first time. Hard cider is now produced in 48 states. Much of the cider category’s growth is attributable to the excise tax credits these companies are now receiving,” said Michelle McGrath, executive director, U.S. Association of Cider Makers. “Small cideries are expanding their staff and operations in a direct response. The industry can continue to support manufacturing, neighborhood renewal projects, rural economies, and orchardists, but we need these credits to stick around on a permanent basis to do so. Sunset clauses are no way to plan a business, and cider taxes are extremely complex—uncertainty makes navigating them even more challenging. We’re hopeful to once more see broad bipartisan support for making these credits permanent with the Craft Beverage Modernization and Tax Reform Act. The margins are so tight in cider that many family-owned cideries are literally depending on it.”
A full list of Craft Beverage Modernization and Tax Reform Act co-sponsors and supporters can be found here.
About the Brewers Association
The Brewers Association (BA) is the not-for-profit trade association dedicated to small and independent American brewers, their beers and the community of brewing enthusiasts. The BA represents 4,800-plus U.S. breweries. The BA’s independent craft brewer seal is a widely adopted symbol that differentiates beers by small and independent craft brewers. The BA organizes events including the World Beer Cup®, Great American Beer Festival®, Craft Brewers Conference® & BrewExpo America®, SAVOR™: An American Craft Beer & Food Experience, Homebrew ConTM, National Homebrew Competition and American Craft Beer Week®. The BA publishes The New Brewer® magazine, and Brewers Publications® is the leading publisher of brewing literature in the U.S. Beer lovers are invited to learn more about the dynamic world of craft beer at CraftBeer.com® and about homebrewing via the BA’s American Homebrewers Association® and the free Brew Guru® mobile app. Follow us on Facebook, Twitter and Instagram.
The Brewers Association is an equal opportunity employer and does not discriminate on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, or marital/familial status. The BA complies with provisions of Executive Order 11246 and the rules, regulations, and relevant orders of the Secretary of Labor.
About the Beer Institute
The Beer Institute is a national trade association for the American brewing industry, representing brewers of all sizes, as well as beer importers and industry suppliers. First founded in 1862 as the U.S. Brewers Association, the Beer Institute is committed today to the development of sound public policy and to the values of civic duty and personal responsibility. For additional updates from the Beer Institute, visit our website, follow @BeerInstitute on Twitter, like the Beer Institute on Facebook, and follow the Beer Institute on Instagram.
The mission of WineAmerica is to encourage the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy. WineAmerica was founded in 1978 as the Association of American Vintners, a trade association of wineries with membership based in the eastern U.S. By 1991, the association had expanded and merged with the National Vintners Association forming the American Vintners Association. The association was renamed WineAmerica in 2003 to reflect its national role. WineAmerica serves the interests of wineries in all 50 states by leveraging its formidable grassroots advocacy strength to benefit the entire industry.
About the Wine Institute
Established in 1934, Wine Institute is the public policy advocacy group of nearly 1,000 California wineries and affiliated businesses that works to enhance the environment to responsibly produce, promote and enjoy wine. Wine Institute also supports the economic and environmental health of its communities through its leadership in sustainable winegrowing and a partnership with Visit California to showcase California’s wine and food offerings and the state as a top travel destination. Wine Institute’s membership represents 80 percent of U.S. wine production and over 90 percent of U.S. wine exports. For information visit www.wineinstitute.org or its consumer website at: www.discovercaliforniawines.com.
About the Distilled Spirits Council
The Distilled Spirits Council is the national trade association representing the leading producers and marketers of distilled spirits in the United States. The Council guards the sector against higher taxes and works diligently to reduce trade barriers across the globe, while supporting policies that increase adult market access for spirits products, provide greater convenience and choices for adult consumers, and encourage responsible and moderate consumption. The Council is a go-to resource for sector data, changes in public policy, cultural acceptance programs, U.S. spirits exports to foreign markets, and alcohol and science. For more information about the Council, go to www.distilledspirits.org.
About the American Craft Spirits Association
The American Craft Spirits Association is the only national, registered non-profit trade association that exclusively represents the U.S. craft spirits industry. Its mission is to elevate and advocate for the community of craft spirits producers, and membership in ACSA is open to anyone.
ACSA is governed by a Board of Directors elected by the eligible voting members of the Association. Voting members must be independent, licensed distillers (DSPs) annually removing fewer than 750,000 proof gallons from bond (the amount on which a Federal Excise Tax is paid.) who subscribe to ACSA’s Code of Ethics.
About the United States Association of Cider Makers
The USACM is an organization of cider and perry producers in the United States. Our mission is to grow a diverse and successful U.S. cider industry by providing valuable information, resources and services to our members and by advocating on their behalf.