Beer Brawl Brewing Over Excise Tax Law

Big brewers are set to “actively oppose” a federal act to reduce the excise tax on beer from smaller craft producers.

The Small Brewer Reinvestment and Expanding Workforce, or SmallBREW Act, will come up for a Capitol Hill vote this year, reports The Hill.

The Brewers Association, a trade group for craft brewers wants the bill, but the Beer Institute — which represents major companies such as Anheuser-Busch and MillerCoors — has dropped its neutral stance on the legislation, said Cris Thorne, vice president of communications for the large-brewers group.

Thorne said the Institute believes the legislation will divide the industry, but “if the entire industry is unified, we stand a far better chance of succeeding than when we have multiple bills to push.”

The Institute opposes any tax increase on beer, said Thorne, and it wants the entire beer industry to unite behind the Brewer’s Employment and Excise Relief (BEER) Act, which will reduce excise taxes on all brewers, regardless of size.

Bob Pease, chief operating officer for the Brewers Association, said his group was not surprised by the Institute's new stance.

The Small BREW Act, if approved by Congress, will cut local beer makers’ federal excise tax from $7 a barrel to $3.50 on the first 60,000 barrels in the year. After that, small brewers must pay an $18 per barrel tax, but the bill would lower that tax to $16.

Meanwhile, the BEER Act, if passed, would create a larger tax cut for the whole industry. Past versions of the bill called for a tax cut from $18 per barrel to $9 per barrel while cutting the small brewers' tax from $7 to $3.50 a barrel.