Money & Business

Micro or Macro? Competing Beer Bills Highlight Brewing Industry Conflict

By / Feb 12, 2015 A scene from a recent Budweiser ad that skewers craft brewing. (YouTube screenshot)

Two bills that would reform the federal excise tax on beer take different approaches. Craft brewers argue that large beer companies don’t need tax breaks, and big brewers argue about fairness. The result? Conflict’s a brewin’.

During the Super Bowl, Budweiser used an unusual ad strategy embracing its unhip macro scale as a virtue. And it mocked its smaller, buzzier, craft-brew competition—and the people who drink microbrews.

The commercial, which earned mixed reviews from the football-watching public, snarked about craft beer drinkers who savor obscure beverages like “Pumpkin Peach Ale.” Beer aficionados weren’t happy, with some likening the commercial to a political attack ad.

Whether or not that was the intent, the ad is playing out as the opening salvo in a legislative battle brewing in Congress. Two bills recently introduced in the House, the Fair BEER Act and the Small BREW Act, would both lower the excise taxes that craft brewers have to pay.

The differences in the bills, though, are creating a rift not unlike the one played out in the Super Bowl commercial. The Brewers Association, which represents small and independent craft breweries, is all about Small BREW, which would lower excise taxes only on microbrews. Meanwhile, the Beer Institute and National Beer Wholesalers Association are pushing for Fair BEER, which would lower excise tax levels for all brewers but on a tiered scale based on brewer size.

Why shouldn’t the tax be cut across the board? According to the Brewers Association, the Fair BEER system favors international beer companies that cut jobs instead of small breweries that create them.

“The BEER Act gives further tax advantages to multinational brewing companies that not only already pay lower rates than purely domestic brewers, but also have cut thousands of U.S. jobs in the past six years and export and shelter their U.S. profits,” Brewers Association CEO Bob Pease said in a statement last week.

But the Beer Institute’s vice president of communications, Chris Thorne, argued that the Small BREW Act helps only one segment of the industry, while Fair BEER would not require legislators to pick sides.

“It allows members of Congress to support every part of the industry. They can stand with the microbrewers, the national craft brewers, and major brewers and importers,” Thorne told The Daily Beast. “They’re not being asked to pick winners or losers in the marketplace.”

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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