Like Craft Beer? Big Beer’s Leading Lobbyist Says You’re A Chucklehead
Beer Tax Legislation Is More Than A Referendum On What Beers America Likes To Drink
When Budweiser launched its Super Bowl sized marketing assault on craft beer, craft breweries and craft beer fans it was just one volley in a much larger battle for control of America’s beer market.
Bud’s minute-long assault on craft breweries included mockery of craft beer flavor combinations; craft beer enthusiasts — showing them sniffing and dissecting beers; and brew pubs — including a fictional menu board in one scene offering fried Brussels sprouts and chicken liver mousse.
But Brian Perkins, VP of marketing for the self-proclaimed King of Beers, told Ad Age:
“This is not an attack on craft beer this is not an attack on competition. The only other beer that we reference in the spot is a fabricated, ludicrous flavor combination of pumpkin peach ale.”
The spot cannot be an attack on craft beer because that would be an attack on Bud itself. Days before the Super Bowl — when football fans were focused on DeflateGate — Anheuser-Busch InBev, the parent of Budweiser, was adding to its craft beer roster with another acquisition.
Bud’s purchase of Elysian — which does make a pumpkin ale brewed with “seven and a half pounds of pumpkin per barrel and spiced in conditioning with ginger, cinnamon, nutmeg, cloves and allspice” — adds one of the Pacific Northwest’s leading brewers to a list that already includes Chicago’s Goose Island, Blue Point Brewing of Patchogue, N.Y., and 10 Barrel of Bend, Ore.
As The Wall Street Journal’s Tripp Mickle writes:
AB InBev has made a concerted push over the last four years to catch up with American consumers, who increasingly are trading mild-flavored lagers like Bud Light and Budweiser for the more flavorful India Pale Ales and porters made by craft breweries. The company’s beers still account for nearly half of the 200 million barrels of beer consumed annually in the U.S., but volumes have fallen nearly 9% over the past decade. At the same time, craft brewers’ market share has surged to more than 10%.
According to the Brewers Association — the Boulder, Colo.-based trade group for craft brewers — overall beer sales in 2013 fell 1.9% while craft beers made up 17.2% of total beer sales in America.
FROM THE SUPER BOWL TO THE NATION’S CAPITAL
Now the battlefield has moved from football-related marketing to the halls of the U.S. Capitol where breweries and their trade groups are pushing for legislation that pits large against small with the Fair BEER Act and the Small BREW Act.
Under existing federal law, breweries which produce less than 2 million barrels of beer annually pay a tax of $7 per barrel for the first 60,000 barrels of beer produced or imported. After that the rate is $18 per barrel. Breweries that produce more than 2 million barrels pay $18 per barrel on every barrel.
The Small BREW Act, dubbed the Small Brewer Reinvestment and Expanding Workforce Act, was introduced on Feb. 4 by Sen. Ben Cardin (D-Md.) and Sen. Susan Collins (R-Me.) and would cut the taxes for the first 60,000 barrels to $3.50 per barrel and then move to $16 per barrel from 60,001 to 2 million barrels. If passed, the law would leave the tax rate the same for breweries producing more than 2 million barrels.
Bob Pease, CEO of the Brewers Association, said in a statement that the legislation would allow smaller brewers “to remain competitive against large multinational breweries, invest further in their breweries and create new employment opportunities in their communities.”
The Fair BEER Act, tagged the Fair Brewers Excise and Economic Relief Act of 2015, was introduced a day later by U.S. Rep. Steve Womack (R-Ark.) and U.S. Rep. Ron Kind (D-Wis.) and creates a “graduated federal excise tax structure while maintaining a level playing field,” according to the Beer Institute, the trade group whose roster includes Anheuser-Busch, MillerCoors, Heineken USA, and Crown Holdings Inc. — the Philadelphia-based multi-billion dollar consumer packaging company that has defined the beer packaging industry since 1892.
Under the Fair BEER Act there would be no tax for the first 7,143 barrels any brewery produces. From there breweries would pay a tax of $3.50 for barrels 7,144–60,000 and then $16 for 60,001 to 2 million. Every barrel produced above 2 million would be taxed at $18 per barrel.
“This bill is important for reforming a hidden tax that most beer drinkers don’t even know they pay, and because it removes barriers to industry growth … it reaches that reform without completely changing the industry structure,” said Jim McGreevey, president and CEO of the Beer Institute in a press release.
THE BEER LOBBY
Womack received $16,506 from beer, wine and liquor interests during the last reporting cycle — his 18th largest industry-focused donor group. Kind received $47,741 from the industry — the 14th largest industry-focused donor group. The National Beer Wholesalers Association Political Action Committee — the largest beer-focused PAC in D.C. — dolled out $3.14 million to candidates during last election cycle. Womack and Kind received $10,000 and $15,000 respectively.
According to The Center For Responsive Politics data, the beer, wine and liquor industry did not crack the top 20 donor list for either Cardin or Collins.
The Beer Institute spent more than $2.1 million on lobbying in 2014 and slightly more in 2013. During that same time, the Brewers Association spent $259,000 in 2014 and $341,969 in 2013. Both groups focused most of their lobbying efforts on beer taxes for brewers.
And while the Beer Institute pours millions into lobbying efforts — $14.6 million since 1998 — and the proudly “macro” brewery Budweiser spends millions of dollars for 210 seconds of commercials during the Super Bowl, both appear to be making the latest beer tax battle a class war.
“You’re really talking about people who pave roads, lay dry wall, wire houses, deliver washing machines, do landscaping; they’re the ones paying for the light beer and the Mexican imports and they’re the ones paying the top of the dollar … And some chucklehead who’s making $150,000 a year could put down $50 or $45 bucks for a case of beer he’s a paying a much smaller tax.”
So apparently Budweiser’s VP of Marketing Brian Perkins was right, it’s not an attack on competition. Instead, Bud and the Beer Institute are attacking beer drinkers.