Much of this post is going to cut and paste from emails I received from Carl Nolen, President of Capital Brewery and The Wisconsin Brewers Guild, and from Kirby Nelson, Brewmaster at Capital Brewery.
I'll add my own $.02 beyond the $1.50 in opinions I've already contributed to this issue. I agree 100% with Kirby and Carl that this proposal is a cash grab and has nothing to do with reducing "alcoholism" or consumption in this state. To the extent you are told otherwise, you are being lied to. And Kirby nails it on the head: "...they[the proponents of the tax] are coaching their minions to avoid talking about reducing consumption because it leads to job loss discussions. Apparently the message is let’s keep the harm happening and just raise more money."
Moreover, it would be unprecedented in legislative history to have a tax like this as a specific appropriation. Keep in mind, this is not a "sin tax" to pay for a stadium - and the cigarette tax, the tax most similar in that its intent is to guide social behavior, is not a specific appropriation; its money goes to the general fund. Also, if you don't recall, the lobbyist that consulted on this bill has a long history of crafting "social behavior taxes" including the cigarette tax here in Wisconsin.
Finally, I'll reiterate my thoughts that Kirby has alluded to. Personally, I do not oppose the idea of a tax on alcohol for these purposes. BUT, I have two caveats: 1) it should not just target beer, it should be an equal tax increase on all alcohol products; 2) you don't get to raise taxes until you pass meaningful legislation that seeks to target drunk driving - I don't care if it's DUI Checkpoints, increased Dram Shop Act liability, more funding for cops, increased penalties (1st offense is now a misdemeanor only if someone in the car at the time is under 16!? Please.), and/or increased public awareness spending. Until those conditions are met, I refuse to believe that the state purposes behind the law are anything other than a sham to get my money and I'm not just going to voluntarily hand it over.
---------FROM KIRBY NELSON, BREWMASTER OF CAPITAL BREWING CO------------------
We have a problematic issue facing us and that is the proposed increase in amount of taxation Wisconsin would impose upon state breweries. To the tune of from $1/bbl that Craft Brewers pay to $10/bbl. Please read Carl’s letter below, it describes the impact such an increase will have.
And I believe there is a problem above and beyond what Carl discusses. For example, the people trying to make this happen are considering changing this from a “tax” to an “impact fee”. They want to emphasize that it is needed to offset the “harm done by beer”. I find it insulting to imply that the millions upon millions of us who enjoy beer are a menace to society and need to pay more to offset our havoc causing ways. This type of mentality cannot go unchallenged.
And this type of statement is hugely ironic in that they are coaching their minions to avoid talking about reducing consumption because it lead to job loss discussions. Apparently the message is let’s keep the harm happening and just raise more money.
And that is what this is all about, more money for their proposed/pet/desired/promised/what have you “programs”. Carl believes all of this taxation discussion is just a land grab for cash. ‘Nuff said.
The point of my email is that we need you. And a whole lot of others. Next Tuesday, October 13th at 10:00 AM there is going to be a hearing on this proposed beer tax increase. I will be sending you a second email that has a link to the specific location and also a link to contact those on the committee considering this.
Please do whatever you can to make it to this hearing. Your presence is important.
And, please forward this to others who are willing to help.
--------------CARL NOLEN, PRESIDENT WISCONSIN BREWERS GUILD and CAPITAL BREWERY-------------
FR: Carl Nolen, President, Wisconsin Brewers Guild
RE: Assembly Bill 287, the Beer Tax
As you know, on Tuesday, October 13 at 10:00 a.m. the Assembly Committee on Public Safety will hold a public hearing on Assembly Bill 287, authored by Rep. Terese Berceau (D-Madison) that would raise the beer tax to $10 per Barrel.
The purpose of this memo is to outline our strategy on this bill, lay out some brief talking points and suggested actions we would like Guild Members to take.
The Strategy: When this issue came up earlier in the year, we understood that Rep. Berceau had been promised a “hearing” on her bill; that is what is happening on October 13th. It is not a final committee vote. Therefore, we want to let them hear from us, but not overwhelm them before we know there will be an actual vote.
Action: We’re asking you to do the following three things
1) Talk to your own legislator: It’s important that we let them know we’re out here, and watching the debate. In addition, even if this beer tax effort were to fail there will be other opportunities for the beer tax to be raised, so it’s important that they hear from us. If you’re not sure who it is, we’ve attached a list.
2) Talk to the “Committee on Public Safety” member that’s nearest to you geographically (We’ve attached a list)
3) Show up: Can you be with us at the Capitol on October 13th? The proponents will most certainly be there – we need to show our strength.
What to say: Talking Points.
1) Your Personal Story: We need legislators to understand your “personal/business story – that is, how this legislation would affect your own business
- Craft brewers are almost all small to medium size businesses with 1-30 employees.
- The margins are very small and most companies have been operating at or below break even during this recession
- You’re working long hours to make your business work, in a very tough economy that has seen raw material costs go up dramatically over the last five years alone.
- This proposed increase would:
A. Likely result in a significant decline in our industry and punish all beer enthusiast if the cost increase was passed onto consumers
B. Would result in a significant loss of jobs (total production x $9 BBL/ average employee production wage = # employees) for the Capital Brewery this equates to 30% of our work force.
- The list of challenges is long
2) We are already heavily taxed: Proponents of the beer tax legislation like to point out that Wisconsin has one of the lower beer taxes in the country.
- On average, between federal and state beer taxes, sales taxes, payroll, business and other taxes and fees, about 40% of the retail price of beer is a tax in one form or another.
- It is already highly taxed in spite of Wisconsin’s relatively low beer tax.
- We cannot afford to absorb the cost of tax increases; because the margins are small, craft brewers are faced with either laying off employees, or passing the tax on to consumers
- If the tax is passed on, it will very possibly result in a 50 cent per six pack increase by the time costs are added up along the supply chain.
- Beer taxes are regressive, and disproportionally inflict costs on lower-to-middle income consumers. Nearly 63% of beer in the U.S. in purchased by low and moderate income consumers
3) Craft Brewers are the “Home Team” in Wisconsin
- There are approximately 65 craft brewers in operation in Wisconsin.
- The old names Schlitz, Heileman, Blatz, Pabst no longer dominate; craft brewing has seen careful and steady growth with names like (yours), Capital, Lake Louie, Sprecher, Tyranena, New Glarus, Central Waters and many others.
- We hire workers, buy local products and ingredients, pay taxes, and contribute to their local communities.
- We are among the nation’s leaders in variety and quality of craft beer made here, and the number of craft brewers that call the Badger state their home.
- Why would we want to punish these businesses?
As always, be very courteous, specific, and brief. Thank them or their staff for taking time to talk with you, and tell them they can always call you if they have any specific questions, or want to stop by your business.
We are roughly two weeks from the hearing. If we can get all association members to at least call their own legislator, as well as a committee legislator, we’ll have a big impact. And if you can make it to Madison on October 13th, it’ll be great to show the Guild flag.
Feel free to contact our lobbying team of: Brian Schimming (608) 220-7132, Mike Brozek (608) 576-5300 at Midwest Strategy Group if you have any questions whatsoever.
Thanks much for all your work.
Assembly Committee on Public Safety
Representative Tony Staskunas (D-West Allis), Chair
Representative Bob Zigelbauer (D-Manitowoc) Vice-Chair
Representative David Cullen (D-Milwaukee)
Representative Jeff Smith (D-Eau Claire)
Representative Terese Berceau (D-Madison)
Representative Garey Bies (R-Sister Bay/Door County)
Representative Al Ott (R-Forest Junction/Upper Fox Valley)