Wednesday, October 7, 2009

The Day Of Reckoning - Excise Tax Hearing On Tuesday, October 13

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.


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.


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
(608) 266-0620

Representative Bob Zigelbauer (D-Manitowoc) Vice-Chair
(608) 266-0315

Representative David Cullen (D-Milwaukee)
(608) 267-9836

Representative Jeff Smith (D-Eau Claire)
(608) 266-0660

Representative Terese Berceau (D-Madison)
(608) 266-3784

Representative Garey Bies (R-Sister Bay/Door County)
(608) 266-5350

Representative Al Ott (R-Forest Junction/Upper Fox Valley)
(608) 266-5831


  1. This state is bleeding in red ink, with unfunded mandates, drunk drivers out of control. We need to take extra money to deal with these consequences. Craft brewers are living high on the hog. New Glarus is an example of a place making tons of money. Time to share some of it with the people. Drunks are driving on the streets threatening everyone out there. Time to get them and their money. Stop crying in your beer Kirby Nelson, pay up.

  2. Well, the state may be bleeding(drowning) in red ink with unfunded lets work to save a bit of money somewhere in the budget before passing industry specific taxes that won't help solve the problem they claim to be attacking. I would like to see some attention given to the drunk driving issue w/out the tax discussion-that would show me the determination to make a difference.

    To call New Glarus a brewery living high on the hog is a bit of a stretch - During a conversation with Deb a couple of months ago she mentioned the hundreds of thousands of dollars in taxes they paid last year and alluded to the fact that they didn't actually see a profit last year. They do have a beautiful new facility that has quickly become a tourist draw for their community (i.e. increased business for all in NG) but it isn't paid for yet....they are still working hard to grow their business to a point where they can see the hog and maybe even think about living high on it.

    So to target brewers is way off the mark - Minnesota has a higher sales tax on alcohol(9.5%) that I wouldn't have any problem paying if that funds specific programs to combat alcohol related issues. That makes the consumer make decisions on their purchases and doesn't put brewers in the uncomfortable position of being asked "why is your beer so damned expensive?"

    Cheers everybody!

  3. I am pretty sure we can come up with a long list of people who are living "high off the hog" as you put it Anonymous. (Very gusty way to post by the way wouldn't want to use your name.) This has become an issue of state government being unable to live within it's means. This has become an issue of raising taxes through deception. If you recall the cigarette tax was sold to us thru lofty goals of helping people quit with treatment and other programs only to have money for such programs taken out of the bill at the last minute and put into the day to day operations of our state government. Now these same methods are going to be used to put another tax on another LEGAL product enjoyed by adults who make the decision to enjoy them.
    Does Wisconsin have aproblem with Drunk Driving? Of course it does. Is that the reason for this tax increase? Don't bet on it.

  4. Breweries from what I can tell are expensive to run, look at the equipment, piping and bottling machinery. The cost of malt and hops has soared in recent years. And they also pay all other taxes businesses have to pay.

    Interest in local craft breweries is growing around the USA and Wisconsin. This increase in the tax would a job killer and potentially brewery killer. The cost of beer in stores and bars has soared in the last 2 years.

    The prohibionists are using "sensitive emotional issues" to push their agenda. Rep Berceau has been pushing this issue for sometime now. If you live in her district, it might be time to vote her out. Also anyone else who supports raising the beer tax should be given the same fate.

  5. The basic theme of the Liberalism is to protect those that can’t protect themselves. Smoking for an example, ban smoking in all public places and raise the taxes so high that they can’t afford them. Result, cigarette related crime has increased dramatically and your right to choose to smoke or not is made for you. I have always considered “Liberalism” as a mental disease. America voted for change and now America is getting it, Hmmm, it wasn’t the change you wanted? Well ungodly and foolish taxation for everyone is on the way.

  6. Anonymous said... "the basic theme of Liberalism"

    Uh, are you sure about that? I mean everywhere I look there's right-wing nutcases telling me that I can't gamble, can't look at porn, can't smoke pot, can't get married to whoever I want, can't do what I want inside my own house, etc.

    Oh, and the mayor who instituted NYC's smoking ban and who raised taxes to astronomical rates on cigarettes? Bloomberg, a REPUBLICAN. You're rants about liberalism are just a lliiiiiitle off-base.

  7. There you go again Travis getting the fact all mixed up. Today’s “republican” is not a conservative, they’re focus is on religious interest and not the interests of the country as a whole, and as I understand religion and our government are supposed to be separate. The presidency of George Bush is a great example of how to F-up the country. There was nothing “conservative” about his administration. Now to make things worse the Obama is going to tax America to death along with all his lackeys throughout this once great country of ours creating tax after tax after tax.

    One more thing, the pron industry is run by criminals, the marijuana industry is run by criminals, the gambling industry is run by criminals and I am sure what ever you want to do in the privacy of your own home is possibly criminal.

  8. Does anyone notice from the details here that this appears to be only on brewers making less than 300,000 barrels/year? That means Miller and Pabst are not effected by this. It's a microbrewery only tax. My assemblyman has been notified.

  9. @Anon - I never new that Bush was a Liberal, lol. I guess that's why all of the Conservatives stood up to him and his liberal cronies for the 8 years that he was in office. Blame Bush all you want, but how many bills did he veto that his Republican congress put out?

    Like I've said before, lets knock off the political BS except for where it pertains to our love of sweet, sweet beer, ok?


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