The Washington Brewers Guild speaks out about the beer tax issue

Below is an message from Heather McClung, the President of the Washington Brewers Guild, in which she voices the Guild’s concerns with the proposed beer tax increase currently being considered by our legislators in Olympia.

By now everyone knows about the proposed beer tax increase. Whatever your opinion, I hope it is an informed opinion. There has been a great deal of misinformation swarming around this issue. Please read Heather’s message and do whatever you think is right. Personally, I really hope you see things the way I do and choose to write your legislators and ask that they oppose this tax.

About the Washington Brewers Guild: The Washington Brewers Guild is a non-profit organization that promotes small-scale brewing and represents the interests of Washington’s craft beer industry. The guild is primarily comprised of regular members (breweries). There are also a smaller number of associate members (supporting members) from related industries. A large majority of the 120+ breweries in the state are members of the Washington Brewers Guild.

Hello everyone,

We need your help. The legislature is actively discussing raising beer-specific taxes, there is an exemption for small breweries, but if we don’t fight this today, it will only be a matter of time until they apply it to us as well.

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Below is a letter that I encourage everyone to send to their legislators. I have contacted all 6 of mine (work and home) and have personally heard back from 4. We need to ensure that Olympia hears our voice and knows that we are watching and they cannot pass something like this in the 11th hour without some push back.

The main points to remember are: 1. In the media they are stressing $.50/ gallon, however they are doubling the tax burden by raising the tax from $8.08 to $15.50 a barrel. 2. They say $.50/ gallon but that is before the beer enters the distribution chain. The final cost in the supermarket and alehouses will reflect additional mark-ups on margins.

Thank you for forwarding this on to your legislators. It really DOES matter.The best time to influence policy is before it is made!

Find your legislator at:
http;//apps.leg.wa.gov/DistrictFinder/Default.aspx

Click on one representative to email. Check the box to cc other representatives; 1 email, 3 ears; easy to do.

Cheers,

Heather McClung
Schooner EXACT Brewing Company
President of the Washington Brewers Guild

Email Heather McClung

To my representatives in Olympia,

I was saddened and dismayed to learn that the Senate included a beer specific tax to help raise revenue in the Senate Revenue proposal.

Even though it provides an exemption for the small breweries (thank you) we still oppose this legislation as it does not address the root issue of beer being singled out as a “sin” tax. This proposal practically doubles the tax burden. It raises the tax from $8.08 to $15.50 per barrel. That is a significant hit to any industry. This situation creates a dangerous precedent. If we roll over on this and don’t oppose it or stay neutral, then it will only be that much easier for legislators to choose beer as an easy target whenever they need to raise a little extra revenue. It is also interesting to note that only beer is mentioned. If beer was targeted because it contains alcohol, why were wine and spirits excluded? Why single out a specific industry and one of the only industries adding jobs in the state?

Why beer? Why does the brewing industry get unfairly sought after to raise money to fill government coffers. Alcohol companies already pay more taxes than most other goods manufacturing industry in the country. Currently in Washington D.C. the house and senate have bills to LOWER excise taxes on beer to stimulate our industry and our related industries! It is concerning that the opposite, adversarial approach is threatened in our home state – the state which grows 75% of the country’s hops!

Beer has taken its fair share of the punches over the last few years with DRAMATIC cost of goods increases. There is only so far that we can be pushed before breweries start going out of business from restricted profit margins. If the other alcohol industries gain a larger price advantage, then more consumers will choose the affordable option instead of the quality choice. We promote microbrew as a sustainable, local option and are actively trying to change beer’s reputation to a beverage to be paired with food that is intensely full of flavor and body.

A well known blogger in our industry, Jay Brooks from California had a nicely written piece on his blog the other day concerning beer tax proposals in California. Much of what is discussed concerning California is true of Washington. I think you and your colleagues may be interested. The link is here:

http;//brookstonbeerbulletin. com/marin- institue-wagging-their-finger-at-brewers-again/

Please do not support the beer tax and please encourage your fellow legislators to also not support a tax on beer. A tax only hurts our growing craft beer industry.

Thank you for your time and consideration.



  1. If you are going to send a letter to your representatives and would like to make a positive impact, I would make two suggestions. The first is not to use a form letter. Restate the issue in your own words. If, however, you must use a form letter, absolutely do not use one with an error such as a broken link.

    Oops.

  2. As a policy matter, I submit that the new tax benefits Washington beer producers and consumers, and WBG’s fears are unwarranted.
    1. Benefit to Producers:
    (a) This tax is a form of protectionism. It will only tax large out-of-state producers. Macro-brew will thus increase in price and drive a portion of consumers to microbrews, which includes all Washington breweries. Greater micro sales = greater profit for WA producers.
    (b) The statutory exception for microbreweries indicates that legislators in Olympia are concerned with (and willing to cater to) the local brewing industry. WBG should encourage such differential treatment. In this way, WA brewers can strengthen their interest group identity in state politics.
    2. Benefit to Consumers:
    As consumers switch to microbrews, WA breweries can capture more of the beer market. This increases opportunities for new breweries to gain a foothold. Beer diversity is good.
    3. WBG’s Fears are Unwarranted
    (a) The slippery slope is flawed. Political and economic incentives weigh against taxing local producers. Instead, legislators can extend the tax on out-of-state producers. This increases both state revenue and local brewer revenue. No brainer.
    (b) WBG’s activism on this issue might dilute its political power for future issues. Members, beer drinkers, and legislators can only be rallied to a certain cause so often. Better to reserve that activism for issues that actually affect the industry. For example, lowering the federal excise tax: http://www.washingtonbeerblog.com/a-call-to-action/

  3. A lot of Washington craft beer drinkers didn’t bother to take the time to contact their representatives to express their opposition to the tax on beer. Afterall, many said, “Hey, it doesn’t apply to me. I don’t drink those mass-produced beers.”

    So now we all know that increased taxes were approved on large-scale breweries.

    But here’s the real kicker: Taxes have also been increased on import and high-gravity beers — and we craft beer drinkers in Washington state have become accustom to drinking beers at 8% ABV and upwards and we also enjoy our import beers!

    Alan Moen of the Northwest Brewing Newspaper has talked to Jhon Gilroy of Merchant du Vin regarding the upcoming taxes, and expect to see an article regarding such in an upcoming edition. I told Alan to call me back in 3 months to get a better retailer/consumer perspective on the fallout as I’ve heard that some importers and distributors are going to attempt to initially absorb the tax rather than include it in the price to retailers. However, it’s a business world and when profit margins diminish, prices tend to ultimately go up for the consumer. Expect to see some price increases across the board on import and high-gravity beers over the upcoming months as the top tiers realize their margins are dropping.