08 Jul 2009 @ 2:27 PM 

Local issue today, friends. I think this can probably apply to most places if it has to, but my focus today is the great state of North Carolina.

Dear North Carolina Legislators and Gov. Bev Perdue,

Please stop. There’s been a lot of talk about how to fix the state budget. In fact, we’re a week overdue on a budget, anyway, so this seems like a pressing issue. People keep talking about what to tax to fix this budget shortfall. I’d prefer that the answer be “not beer.” I think I’d also like to say, “Don’t furlough me again.” but really? This is about beer.

I know. Sin Taxes are popular and easy: Tax the things that Portion A of the population fervently believes is bad for Portion B of the population. In doing so, not only will you make money on people who are not Portion A, but it will act as a deterrent for Portion B to buy those evil products. Portion A loves it, and they’re very vocal and often have money, which kind of makes me wonder why we aren’t taxing them.

Just a couple of things:

1) If you’re only taxing a portion of the population, it’s not a very effective tax in terms of income.
2) If you’re using tax as a deterrent on consumption, you’re not planning on making any money in the long run, as the less people buy the evil products, the less money you will make.

Sin Tax seems silly. I’d much rather see a Fat Tax. We know that our health care system is in financial crisis. We know that there’s an obesity epidemic. We know that obesity is a predictor in heart disease, arthritis, diabetes, and early mortality across the board. We know what makes people fat (sugar and (amazingly) fat), so tax that if you want a tax deterrent. I’ve mentioned before that I think that a tax on products containing High Fructose Corn Syrup would be much smarter than a tax on beer, and I still do. But I’m not here to argue that.

No, I’m going to assume, that despite the wonderful efforts of the good people behind Stop the NC Beer Tax (dot com) that you’re going to throw your better judgment to the wind and raise taxes on beer and wine. So instead, I’m going to tell you how to do it.

Consider for a moment that a city in your fair state was recently voted co-Beer City, USA in a poll run by President of the Brewers Association. Consider that, as of this summer, there are ~40 craft breweries either in operation or in the middle of starting up. These are all small businesses contributing to your local economy. They’re creating jobs in communities across the state. Consider that a rise in beer tax will hurt these small businesses – especially the startups – the most.

But hey.. you’re going to tax beer. Portion A must be satisfied. Please consider the following two-part plan:

1) Increase tax per barrel of beer manufactured inside the state of North Carolina by any brewery manufacturing over 15,000 barrels of beer annually (ie – Regional Breweries and larger). Leave the small business out of it.

2) Increase tax per case of any beer imported to the state of North Carolina by any brewery manufacturing over 15,000 barrels of beer annually. Leave your neighbors’ small business out of it, too.

Fact is this: Something like 99% of the beer consumed inside the state of North Carolina is manufactured by a regional brewery or larger – a significant portion of that beer is imported IN to the state of North Carolina. Those breweries are making money in states Other Than Yours – especially the macrobreweries – but most of the small breweries in the state aren’t. They’re distributing locally, often by-hand, in their own communities. They’re getting the tax pinch on every purchase of their product, not just the ones that happen in-state. So how are these small breweries going to deal with the fact that they have a significantly higher cost of operation and, if the Sin Tax works, poorer sales? Will they lay off workers? Will they close doors altogether? In Beer City, USA?

The way to turn the corner on this economic downturn begins and ends with the small business. Don’t hurt them more just because Sin Tax is easy. Help them, and reap the benefits. Maybe take yourself out for a good local beer to celebrate a good deed done for the day, and then ask yourself:

Why are we taxing beer in the first place? Sin Tax is cheap and misguided. There are a million better ways to save money and generate revenue that don’t actively hurt small businesses in our state while at the same time, allowing us all to continue to treat ourselves to a an occasional affordable luxury.

Cheers,
Erik L. Myers,
Self-Righteous Beer Evangelist

If you’re inside North Carolina, please take the time to go Stop the Beer Tax.

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Categories: distribution, industry, RDU, taxation
Posted By: erik
Last Edit: 08 Jul 2009 @ 02 31 PM

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 08 Apr 2009 @ 6:28 AM 

Sean over at Fullsteam, a brewery-in-planning in Durham, NC, posted a brilliant piece on his blog yesterday, and it really needs to be shared.

Unfortunately, Sean and I share a lot of viewpoints about beer and craft breweries. I say “unfortunately” because Sean is currently in the throes of a startup and I am not. Color me jealous.

Invite the other 99.

Invite the other 99.


Sean put up a piece about “the other 99 beers.” Give it a read if you get a chance, but I’ll sum it up here, as well. The gist is that, here in NC, craft beer has a 4% market share. He posits that only about 1/4 of that 4% is locally made beer, which brings you down to 1-in-100 drinkers who are actually drinking locally made craft beer. His argument? That the other local beer makers are not his competitors, but his compatriots. He doesn’t want to win over that 1-in-100. He wants to win over the other 99. As he puts it, his market is:

The foodie who boasts about eating local, but has a soft spot for, I don’t know, Iron City. The wine guy who knows all about Puligny-Montrachet’s chalky soil but drinks Amstel Light out of habit. The busy and overwhelmed grocery shopper who buys whatever is on sale.

Yes! I cannot agree with this enough. Unfortunately, this does sort of cast regional breweries as.. well.. not the bad guy, per se, but certainly not the good guy. In this scenario, Sam Adams fills the same (large) niche as Budweiser. No matter how you slice it, they are taking a sale away from a local brewery. On the other hand – that’s not necessarily a bad thing. Those larger craft breweries as well as, let’s face it, the different style options from the megabreweries, give a consumers a familiar product that they can interact with in many different locations – pretty much no matter where they are. You can get Sam Adams Boston Lager – a great brew, make no mistake – at any airport or sports bar. A local brewery is a specialty, like a local dairy or a local bakery; their products are something you can only get in one geographic locale. The people who like good beer enough to buy a Sam Adams are almost definitely the people who will drink a locally brewed beer – but how do you let THEM know that, and in fact, how do you stop them from buying that Sam Adams? And DO you want to stop them from buying that Sam Adams? Probably only where your beer is served.

It’s a delicate balance, to be sure. I think that Sean and Chris at Fullsteam are heading in the right direction with this attitude. I can’t wait to see more.

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Categories: appreciation, blog, brewery, op-ed
Posted By: erik
Last Edit: 08 Apr 2009 @ 06 28 AM

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