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Rolling out the barrels

Despite the presence of Miller and other longstanding commercial brewers, Wisconsin is becoming a craft-brewing powerhouse.

(page 1 of 5)

From the pages of In Business magazine.

Wisconsin is a beer state, no question about it.

“Where else can you find a Major League Baseball team named after beer?” asks Jim Steele, the professor who oversees the University of Wisconsin–Madison’s burgeoning Fermented Foods and Beverages Program, referring to the Milwaukee Brewers.

Figures jointly released in July by The Beer Institute in Washington, D.C., and the National Beer Wholesalers Association in Alexandria, Va., indicate that beer’s economic impact in Wisconsin is more than $8 billion; and the industry directly and indirectly supports almost 56,500 jobs in this state. (Nationally, the beer industry’s economic impact is $253 billion and 1.75 million jobs.)

Craft beers account for about $1.8 billion of beer’s economic impact in Wisconsin, according to the Boulder, Colo.-based Brewers Association. While the nonprofit trade group reports 97 craft breweries in the state in 2014, that number is now closer to 125, says Mark Garthwaite, executive director of the Wisconsin Brewers Guild.

“Our place in the national rankings is pretty high, but craft brewing, in a strange way, is a little bit of a liability,” Garthwaite says, explaining that for so long Wisconsin beer was defined by giants such as Pabst, Miller, and Schlitz. “Beer in other states — Iowa, Indiana, Arizona — is defined by craft beer. We have a challenge here that other states don’t have, and that is to recalibrate the way people think about beer in Wisconsin.”

So far, so good.

Some Wisconsin craft brewers have received national recognition — whetting the whistle of the state’s evolving beer tourism industry, innovating with a vast array of sustainability practices and developing new business models that include crowdsourcing. And with both UW–Madison and Madison College now offering brewing programs, future industry leaders are learning the art and science of beer early on.

Craft beer also is the focus of multiple pieces of pending legislation, including the federal Craft Beverage Modernization and Tax Reform Act, co-sponsored by Wisconsin’s U.S. Sen. Tammy Baldwin, and a state effort to amend Class A liquor licenses, which would allow grocery stores to sell tap beer in re-sealable jugs.

Meanwhile, HopCat, a brewpub chain with six locations nationwide, recently opened in downtown Madison and offers 130 craft beers on tap; Waunakee will welcome Octopi Brewing Co. in September as the village’s first craft brewer, and will be home to Lone Girl Brewing, as well; Hop Haus Brewing Co. in Verona and Rockhound Brewing Co. in Madison are also set to join the local beer scene; and producers of the forthcoming feature-length documentary Brewland spent several days filming in Wisconsin this past spring.

As Jim McGreevy, president and CEO of The Beer Institute, proclaims, “Beer is more than our nation’s favorite adult drink — it is a powerhouse in job creation, commercial activity, and tax revenue.”

Cheers, Wisconsin!

(Continued)

Oct 27, 2015 06:20 am
 Posted by  Barry Clark

Page 5 of the article describes the proposed “Craft Beer Modernization and Tax Reform Act.” Actually, the second word in the bill’s title is “Beverage” instead of “Beer.” It would also reduce taxes on hard cider, wine, and distilled spirits.

Page 4 illustrates that the small brewery market segment is booming. One reason is those craft beer, on average, has more alcohol than beer from the larger brewers. Another reason is that the federal excise tax for small brewers is less than half that of the large brewers. That tax was reduced in 1977 to $7/barrel for the first 60,000 barrels/year. The effective tax rate has been eaten away by inflation. Yet the small brewers are pushing for a further tax cut.

There is no booze shortage in this country. If the bill passes, it will mean higher profits for the industry. Senator Balwin and the booze lobby are selling this as an economic stimulus. But the audience for this publication knows well that there is no shortage of possible tax breaks to stimulate the economy without focusing on booze.

Another likely result of tax breaks for booze would be lower prices and more alcohol consumption. Senator Baldwin should ask herself, is this the legacy she wants? Don’t we already have enough problems with alcohol in this country?

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