Beer tax roll-back getting national notice - Statistical Data Included

Modern Brewery Age, June 25, 2001

The beer tax roll-back effort has begun to receive substantive coverage in the national media for the first time. An Associated Press story on the roll-back hit the wires last week, and was picked up by newspapers across the country. The text of this Associated Press story follows:

By Associated Press--A tax on liquor brought America the Whiskey Rebellion two centuries ago. Now the brewing industry is looking to start the Battle over the Beer Tax.

Calling the levy regressive and unfair, brewers are pressing Congress to cut it in half. An anti-tax Web site features a profile of "Joe and Jane Six-Pack" --people who drink more than a six-pack a week.

"Beer is one of America's best pastimes," said Bill Marshman, a lock-smith from Suitland, Md., who was drinking a Samuel Adams with lunch this week. Marshman, who says he drinks a case a week, supports the rollback effort.

"Anything to pay less," he said.

On the other side: Mothers Against Drunk Driving, arguing the bill would lead to more underage drinking and traffic deaths.

Congress doubled the tax to $18.a barrel--about a dollar a case--in 1990 when it also passed tax hikes on luxury items such as planes and yachts. Three years later, most of the luxury taxes were rescinded but the beer tax remained.

"It's an equity argument," Miller Brewing spokesman Michael Brophy said. "It's certainly not a luxury item, and it's already taxed at the state level, and will still be taxed at the federal level. It's a basic fairness issue."

The beer industry is mounting its most aggressive tax-cut campaign in years, believing that with a healthy budget surplus and a tax-cut proponent in the White House its chances have been enhanced, said Jeff Becker, president of the Beer Institute, the industry's trade association. The campaign includes ads in several Capitol Hill publications.

Becker said most 'beer drinkers are low- and middle-income wage earners who could use a break. "They aren't buying $50,000 cars or private planes and yachts," he said.

More than 150 members of Congress have signed on as co-sponsors of legislation that would halve the beer tax. Rep. Jerry Kleczka, D-Wis. hasn't supported previous efforts to reduce the tax. He said he decided to be a co-sponsor because Congress voted to eliminate the estate tax.

"If Congress can repeal the estate tax for billionaires, then Congress can roll back the beer tax for Joe Six-Pack," said Kleczka, whose state is home to Miller Brewing.

Reducing the tax to its 1990 level would cost the federal government about $1.6 billion a year. Kleczka, a member of the tax-writing Ways and Means Committee, said the bill's chances of passage are slim.

Still, MADD is aggressively fighting the effort Its Web site has a form letter visitors can e-mail to their lawmakers urging them to oppose the bill.

"Economic research indicates lower taxes on beer will lead to more deaths among young people in traffic accidents and other alcohol-related problems," said Millie I. Webb, MADD's national president. "It's cheaper, it's more accessible. It's bad public policy to reduce the beer tax."

A study by the National Institute on Alcohol Abuse and Alcoholism cites research which found that higher alcohol prices can reduce; traffic fatality rates. The institute says more research is needed.

MADD and the institute agree that even a modest price change can affect sales. Restoring the tax to its 1990 level would, if passed on to consumers, cut about 12.5 cents off a six-pack.

Becker noted that when the tax was increased a decade ago, domestic production declined for five straight years. It has rebounded in recent years, but remains about 5 million barrels below the 1990 total of 184.5 million banels.

THE BEER INSTITUTE ESTIMATES NATIONAL AND STATE BY
STATE BEER SHIPMENTS IN BARRELS
                       APRIL
                        2001        2000         % CHANGE
ALABAMA *            249,500     247,177 ***         0.9%
ALASKA *              43,000      47,248            -9.0%
ARIZONA *            353,000     358,663            -1.6%
ARKANSAS *           135,000     136,553            -1.1%
CALIFORNIA *       1,524,000   1,658,820            -2.1%
COLORADO *           272,000     256,845             5.9%
CONNECTICUT *        123,000     125,986            -4.6%
DELAWARE *            45,000      45,171            -0.4%
D.C. *                36,000      35,566             1.2%
FLORIDA *          1,013,000   1,010,333             0.3%
GEORGIA *            492,000     495,006            -0.6%
HAWAII *              78,000      72,401             7.7%
IDAHO *               77,500      74,326             4.3%
ILLINOIS *           142,000     776,209            -4.4%
INDIANA *            322,000     341,209            -5.6%
IOWA *               190,000     193,357            -1.7%
KANSAS *             141,800     138,289             2.3%
KENTUCKY *           202,000     219,190            -7.8%
LOUISIANA *          301,000     338,167           -11.0%
MAINE *               74,000      73,718             0.4%
MARYLAND *           210,000     226,668            -7.4%
MASSACHUSETTS *      323,000     358,375            -9.9%
MICHIGAN *           673,000     597,007            -4.0%
MINNESOTA *          293,000     315,222 ****       -7.0%
MISSISSIPPI *        193,500     186,704             2.5%
MISSOURI *           357,000     386,725            -8.2%
MONTANA *             63,000      66,071            -4.6%
NEBRASKA *           119,000     114,033             4.4%
NEVADA *             173,000     179,108            -3.4%
NEW HAMPSHIRE *       94,500     104,326            -9.4%
NEW JERSEY *         351,000     345,042             1.7%
NEW MEXICO *         138,000     114,333            20.7%
NEW YORK *           769,000     780,476            -1.5%
NORTH CAROLINA *     476,000     462,157             3.0%
NORTH DAKOTA *        46,000      48,230 ******     -4.6%
OHIO *               749,000     735,404             1.8%
OKLAHOMA *           190,000     172,893             9.9%
OREGON *             184,000     200,608            -8.3%
PENNSYLVANIA *       717,000     709,572             1.0%
RHODE ISLAND *        59,000      68,104           -10.7%
SOUTH CAROLINA *     269,000     271,806            -1.0%
SOUTH DAKOTA *        48,500      50,545            -4.0%
TENNESSEE *          319,000     327,847            -2.7%
TEXAS *            1,464,000   1,533,141            -4.5%
UTAH *                80,000      71,258            12.3%
VERMONT *             38,500      36,994             4.1%
VIRGINIA *           387,000     407,380            -5.0%
WASHINGTON *         303,000     301,573             0.6%
WEST VIRGINIA *      103,000      97,794             5.3%
WISCONSIN *          408,000     415,110            -1.7%
WYOMING *             30,500      30,110             1.3%
TOTAL             16,042,000  18,383,849            -2.0%
                  1ST 4 MONTHS
                          2001  MO EST        2000
ALABAMA *              979,000       4   1,004,486
ALASKA *               149,500       4     153,461
ARIZONA *            1,471,024       1   1,407,579
ARKANSAS *             531,773       2     545,803
CALIFORNIA *         6,419,000       4   8,377,680
COLORADO *           1,063,000       4   1,087,045
CONNECTICUT *          502,000       4     512,688
DELAWARE *             168,679       1     162,824
D.C. *                 137,290       1     146,240
FLORIDA *            4,237,695       1   4,218,910
GEORGIA *            1,893,000       4   1,911,118
HAWAII *               278,205       2     301,648
IDAHO *                278,000       4     260,605
ILLINOIS *           2,748,000       4   2,812,057
INDIANA *            1,243,000       4   1,258,102
IOWA *                 726,500       4     723,359
KANSAS *               539,000       4     624,768
KENTUCKY *             805,000       4     818,528
LOUISIANA *          1,232,000       4   1,280,685
MAINE *                272,000       4     270,994
MARYLAND *             883,320       1     901,598
MASSACHUSETTS *      1,278,000       4   1,335,636
MICHIGAN *           2,131,000       4   2,138,523
MINNESOTA *          1,082,000       4   1,121,769
MISSISSIPPI *          753,000       4     773,643
MISSOURI *           1,387,893       1   1,401,587
MONTANA *              254,000       4     251,049
NEBRASKA *             454,000       4     442,132
NEVADA *               563,285       1     654,682
NEW HAMPSHIRE *        371,500       4     390,454
NEW JERSEY *         1,256,000       4   1,246,163
NEW MEXICO *           502,000       4     473,640
NEW YORK *           2,869,594       2   2,828,682
NORTH CAROLINA *     1,872,672       1   1,790,220
NORTH DAKOTA *         167,500       4     173,810 *****
OHIO *               2,810,000       4   2,749,999
OKLAHOMA *             704,500       4     709,838
OREGON *               726,000       4     716,838
PENNSYLVANIA *       2,707,317       1   2,701,684
RHODE ISLAND *         218,000       4     229,346
SOUTH CAROLINA *     1,113,000       4   1,119,052
SOUTH DAKOTA *         190,000       4     186,452
TENNESSEE *          1,296,500       4   1,312,198
TEXAS *              5,608,000       4   6,002,819
UTAH *                 307,234       2     272,775 **
VERMONT *              142,000       4     141,123
VIRGINIA *           1,450,769       2   1,550,052
WASHINGTON *         1,156,000       4   1,148,423
WEST VIRGINIA *        421,500       4     413,247
WISCONSIN *          1,456,000       4   1,417,049
WYOMING *              124,000       4     119,248
TOTAL               62,248,450          62,569,192
(*)--ESTIMATED BASED ON REPORTS TO THE BEER INSSTITUTE OF
TRANSACTIONS CONCLUDED DURING THE MONTH BY PARTICIPATING
BREWERS AND ESTIMATES BY THE BEER INSTITUTE OF SHIPMENTS
BY OTHER BREWERS
(**)--JANUARY 2000 REVISED TO 64,383 BARRELS; FEBRUARY
2000 REVISED TO 66,559 BARRELS.
(***)--REVISED FROM INITIAL RELEASE; JANUARY 2000 REVISED
TO 244,043 BARRELS; FEBRUARY 2000 REVISED TO 249,067
BARRELS; MARCH 2000 REVISED TO 264,199 BARRELS.
(****)--REVISED FROM INITIAL RELEASE.
(*****)--JANUARY 2000 REVISED TO 41,782 BARRELS; APRIL 2000
REVISED SINCE INITIAL RELEASE.
(******)--JANUARY 2001 REVISED TO 362,367 BARRELS; FEBRUARY
2001 REVISED TO 377, 685 BARRELS.