It usually makes me happy when the Washington beer scene receives national recognition. I’m not so sure this time. I just opened the new issue of Beer Advocate and on page 5, at the top of the Beer News section, the headline reads, “Washington State Approves Increased Beer Tax.”
The brief and factual story is about the beer tax increase introduced back in April when the legislature faced a budget crisis. According to Beer Advocate, Washington’s beer taxes are now the third highest in the nation, behind only Alaska and Hawaii.
The Devil is in the details
We reported on the issue back in March and April, tried to motivate people to contact their representatives opposing the beer tax increase, and learned that there were a lot of different opinions on the matter. We all agreed that the money had to come from somewhere.
On the surface, the proposed tax increase did not negatively impact craft beer drinkers or the craft beer industry, focusing instead on the mega-producers like A-B InBev, so many of our readers were not bothered. It was a predictable, “as long as it’s not in my backyard” approach to the issue.
Now we learn about other aspects of the tax increase that might be of more concern for craft beer lovers: the tax increase will also impact high-gravity and import beers.
Yesterday we received the following comments from Tiffany Adamowski. Along with her husband Craig, Tiffany owns Federal Way’s 99 Bottles–one of the nicer bottle shops we’ve ever seen. We thought her comments were worthy of a post on their own, but with Washington’s beer tax news making headlines in the latest issue of Beer Advocate magazine, the timing just seemed right to post Tiffany’s comments.
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. After all, 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.