How do you define a “small brewery?”

The other day the Brewers Association announced that they have changed their definition of “small” brewery. In addition to getting the press release (below), I just read an article in the Baltimore Sun about the topic which made me think about the fact that some of you would probably be interested.

According to the new definition, a craft brewery is one that brews less than 6 million barrels per year. The number used to be 2 million barrels per year, but the Boston Beer Company is selling a lot of Sam Adams these days.

In Woodinville, Redhook and Foggy Noggin both make less than 6 million barrels per year. Along with Boston Beer Company, they are considered “small” breweries according to the Brewers Association definition of a “craft” brewery.

The Brewers Association is a not-for-profit trade and education association dedicated to small and independent American brewers, their craft beers and the community of brewing enthusiasts. I guess you could say that it is the most official trade organization for the industry we love. No doubt, their motives are pure.

The Brewers Association is not exactly hiding the fact that they changed the definition in order to maintain Boston Beer Company’s status as a craft brewery. Jim Koch is doing pretty well for himself these days and apparently his brewery is about to smash through the 2 million barrel ceiling.

We all love to hear reports that say, “Craft beer sales are up,” so I guess we shouldn’t complain that the Brewers Association continues to consider Boston Beer Company a craft brewery. I don’t know.

To me, it doesn’t matter much. Would not a rose by any other name smell so sweet? Call it whatever you want, I just like good beer.

Here’s the press release from the Brewers Association.

Boulder, CO • January 3, 2011-The board of directors of the Brewers Association (BA), the trade association representing the majority of U.S. brewing companies, has voted to change the BA’s designation of “small” in its definition of a “craft brewer.” The Association’s board of directors also has revised its bylaws to reflect the change.

In the BA’s craft brewer definition, the term “small” now refers to any independent brewery that produces up to 6 million barrels of traditional beer. The previous definition capped production at 2 million barrels. The changed definition is currently in effect and can be reviewed on the BA website, BrewersAssociation.org. The change to the bylaws went into effect December 20, 2010.

In the Brewers Association’s bylaws, two classes of membership (Professional Packaging Brewers and Associate membership) have been redefined with a qualifying barrelage of 6 million barrels versus 2 million barrels.

The association cited several reasons for the change, including the recognition that “small” is a descriptive term relative to the overall size of the industry.

“Thirty-four years have passed since the original small brewers tax differential defined small brewers as producing less than 2 million barrels,” said Nick Matt, chair of the Brewers Association board of directors and chairman and CEO of F.X. Matt Brewing Company. “A lot has changed since 1976. The largest brewer in the U.S. has grown from 45 million barrels to 300 million barrels of global beer production.”

Matt added, “The craft brewer definition and bylaws now more accurately reflect and align with our government affairs efforts.” On the legislative front in 2010, the Brewers Association supported H.R. 4278/S. 3339, which sought to update the cap on an excise tax differential for small brewers to 6 million barrels per year in production for their first 2 million barrels.

Retaining Market Share for Craft Brewers

The industry’s largest craft brewer, The Boston Beer Company, is poised to become the first craft brewer to surpass 2 million barrels of traditional beer within the next few years. Loss of The Boston Beer Company’s production in craft brewing industry statistics would inaccurately reflect on the craft brewing industry’s market share.

In addition to Boston Beer, the current growth trajectory of other sizable BA member breweries places them on a course approaching the 2 million barrel threshold in the coming years.

“With this change to the craft brewer definition and BA bylaws, statistics will continue to accurately reflect the 30-year growth of market share for craft brewed beer,” said Matt. “Brewers Association statistics on craft brewers will continue to keep pace with the growth of the industry.”

Craft brewed beer market share is now approximately five percent of the U.S. beer industry, and growing. The BA has a stated mission of helping America’s craft brewers achieve more than five percent market share by 2013.

Matt added, “Rather than removing members due to their success, the craft brewing industry should be celebrating our growth.”



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One comment

Comments are closed.

How do you define a "small" brewery?

This is a call to arms. As craft beer enthusiasts, we need to make our voices heard. A new bill has been introduced in the other Washington that promises to help the craft brewing industry nationwide. We all need to contact our representatives and tell them to support H.R. 4278. It is easy and quick to send a note to your congress person. All you need to know is your zip code.

What is Small?

The small brewer tax rate was established in 1976 and has never been updated. The world was a different place back then and the tax code defined a “small brewery” as one producing less than 2 million barrels per year. In short, a brewery making 190 barrels per year pays the same federal excise tax rate as a brewery producing 1.9 million barrels per year.

Most brewers in Washington produce less than 10,000 barrels per year. Even the most ubiquitous of local craft breweries (not counting Redhook) produces less than 50,000 barrels per year. Setting the “small brewery” ceiling at 2 million barrels hearkens back to a time when there was no craft beer industry in America and a brewery like Rainier was considered small.

H.R. 4278, introduced in December 2009 by Democrat Representative Richie Neal (MA) and Republican Representative Kevin Brady (TX), would redefine the ceiling defining a small brewery and reduce the beer excise tax for small brewers from $7 to $3.50 on the first 60,000 barrels of beer production.

Action is Easy

The Brewers Association has an official Call to Action posted on their Web site. You can read it here.

It is very easy to contact your representative and make your opinion known. Just click here, enter your zip code, and fill out the simple form. You don”t need to be fancy, long winded, or eloquent. Just tell them that you want them to support H.R. 4278.

Here is the simple message I sent my representative this morning:

I urge you to support H.R. 4278 – a bill that provides much-needed updates to the small brewer tax regulations. Please take a moment to consider the robust and growing craft beer industry here in Washington state and support H.R. 4278.



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12 comments

  1. 2 million barrels? Why are our beer laws a century old?

    I contacted McDermott. Thanks for the heads-up.

  2. 2 million barrels? Why are our beer laws a century old?

    I contacted McDermott. Thanks for the heads-up.

  3. Call for action. Small breweries need this change. If you want to support yoru local brewery, you need to support this by contacting your congressman today.

  4. Call for action. Small breweries need this change. If you want to support yoru local brewery, you need to support this by contacting your congressman today.

  5. Congressman McDermott’s reply:
    “Thank you for your recent communication asking me to support HR 4278. I am a co-sponsor of the legislation and appreciate the time you have taken to let me know you support it, too. Please be assured that I will keep your comments in mind as the bill moves forward in the 111th Congress.

    If you are interested in following this particular piece of legislation through the legislative process, the website hosted by the Library of Congress at http://thomas.loc.gov is extremely helpful. It provides a wealth of information about legislation under consideration in the current Congress as well as bills introduced in earlier sessions. The site is called Thomas to honor President Thomas Jefferson and his belief in public access to the workings of government.

    Again, thank you for contacting me. As a representative in Congress, it is critical that I understand the views of my constituents. I look forward to hearing from you in the future.

    Sincerely,
    Jim McDermott
    Member of Congress

  6. Congressman McDermott’s reply:
    “Thank you for your recent communication asking me to support HR 4278. I am a co-sponsor of the legislation and appreciate the time you have taken to let me know you support it, too. Please be assured that I will keep your comments in mind as the bill moves forward in the 111th Congress.

    If you are interested in following this particular piece of legislation through the legislative process, the website hosted by the Library of Congress at http://thomas.loc.gov is extremely helpful. It provides a wealth of information about legislation under consideration in the current Congress as well as bills introduced in earlier sessions. The site is called Thomas to honor President Thomas Jefferson and his belief in public access to the workings of government.

    Again, thank you for contacting me. As a representative in Congress, it is critical that I understand the views of my constituents. I look forward to hearing from you in the future.

    Sincerely,
    Jim McDermott
    Member of Congress

Comments are closed.

How do you define a “small” brewery?

This is a call to arms. As craft beer enthusiasts, we need to make our voices heard. A new bill has been introduced in the other Washington that promises to help the craft brewing industry nationwide. We all need to contact our representatives and tell them to support H.R. 4278. It is easy and quick to send a note to your congress person. All you need to know is your zip code.

What is Small?

The small brewer tax rate was established in 1976 and has never been updated. The world was a different place back then and the tax code defined a “small brewery” as one producing less than 2 million barrels per year. In short, a brewery making 190 barrels per year pays the same federal excise tax rate as a brewery producing 1.9 million barrels per year.

Most brewers in Washington produce less than 10,000 barrels per year. Even the most ubiquitous of local craft breweries (not counting Redhook) produces less than 50,000 barrels per year. Setting the “small brewery” ceiling at 2 million barrels hearkens back to a time when there was no craft beer industry in America and a brewery like Rainier was considered small.

H.R. 4278, introduced in December 2009 by Democrat Representative Richie Neal (MA) and Republican Representative Kevin Brady (TX), would redefine the ceiling defining a small brewery and reduce the beer excise tax for small brewers from $7 to $3.50 on the first 60,000 barrels of beer production.

Action is Easy

The Brewers Association has an official Call to Action posted on their Web site. You can read it here.

It is very easy to contact your representative and make your opinion known. Just click here, enter your zip code, and fill out the simple form. You don”t need to be fancy, long winded, or eloquent. Just tell them that you want them to support H.R. 4278.

Here is the simple message I sent my representative this morning:

I urge you to support H.R. 4278 – a bill that provides much-needed updates to the small brewer tax regulations. Please take a moment to consider the robust and growing craft beer industry here in Washington state and support H.R. 4278.



Cheers to our sponsors, like...

6 comments

  1. 2 million barrels? Why are our beer laws a century old?

    I contacted McDermott. Thanks for the heads-up.

  2. Call for action. Small breweries need this change. If you want to support yoru local brewery, you need to support this by contacting your congressman today.

  3. Congressman McDermott’s reply:
    “Thank you for your recent communication asking me to support HR 4278. I am a co-sponsor of the legislation and appreciate the time you have taken to let me know you support it, too. Please be assured that I will keep your comments in mind as the bill moves forward in the 111th Congress.

    If you are interested in following this particular piece of legislation through the legislative process, the website hosted by the Library of Congress at http://thomas.loc.gov is extremely helpful. It provides a wealth of information about legislation under consideration in the current Congress as well as bills introduced in earlier sessions. The site is called Thomas to honor President Thomas Jefferson and his belief in public access to the workings of government.

    Again, thank you for contacting me. As a representative in Congress, it is critical that I understand the views of my constituents. I look forward to hearing from you in the future.

    Sincerely,
    Jim McDermott
    Member of Congress

Comments are closed.