Keeping the world safe for beer: David Rehr has made the NBWA a political force in Washington - National Beer Wholesalers Association - Interview

Modern Brewery Age, Sept 9, 2002 by David K. Rehr

What are your current legislative priorities?

We may try to get another vote in the Senate on repealing the death tax. The White House and some senators are interested in revisiting that. We lost the last vote 54-44, there is the possibility of one more vote in early to mid-October to remind small businesspeople who is interested in killing the death tax, and who is for keeping the death tax.

Will that become a tougher issue, given impending deficits?

I don't think so. This is a visceral, gut-wrenching personal issue for family businesses all across America. I don't think anyone buys this "hey, we've got a deficit." Statistically, in a dynamic forecasting model, once you pay all the costs of compliance and collection of the death tax, it's pretty much a break-even proposition for the government All of this is investment or property, or holdings that have already been taxed once before. This tax has a kind of un-American quality that drives people crazy. It's going to be a big issue in the elections.

How about the status of the excise tax roll-back?

We're at 222 co-sponsors. We are pressing for additional co-sponsors. We think there are another 10-15 that we could pick up. Because of the deficit situation, it's harder to get a clean vote or move it, but on the other hand, but by pressing the issue, we make it more difficult for our adversaries to call for raising the beer tax. And if some other tax bill comes together at the end of the session, we might get to slip it in there.

So this is a prophylactic against possible tax increases?

Yes. It's a marker to demonstrate to the Congress that the majority of the House opposes raising beer taxes.

Do you see a national tax increase as a danger? We're certainly seeing a lot of interest on tax increases at the state level.

Mothers Against Drunk Driving (MADD) has made it their top priority in Washington to defeat the roll-back. I am told that Wendy Hamilton, the new chairperson of MADD, attended the National Conference of State Legislators. I don't think MADD has done that before. They are escalating the pressure across the board on beer taxes. It's unlikely that the House would push a beer tax increase, but the Senate could be problematic. If you asked me about the probability, I would say it's about 5%, or less. But combine MADD with a healthy bit of jealousy from the spirits people, and it could add up to problems.

Of course, they are pushing for equalization. Would MADD be one of their bedfellows?

MADD released a report in June, titled "Getting MADD again," listing a number of policy recommendations. Point number six was "equalize beer taxes to those currently paid by distilled spirits." Since they have achieved 95% of their agenda, and they are a huge mass-mail fund-raising operation, they need new issues. This is one of them. I call these people neo-prohibitionists, but some of them are actual prohibitionists.

I suppose you couldn't take drunk driving deaths to zero, without outright prohibition.

Right MADD testified in July in Transportation sub-committee hearings on .08 and open container. They also mentioned that they were opposed to an excise tax roll-back on beer. They have not mentioned, even once, the liquor roll back to 1985, You combine their equalization plank with their silence on the liquor tax roll-back, it reminds me of the French captain in Casablanca when he says, "I'm shocked" that gambling is going on. I think they are working closely together.

Has discussion of equalization been mentioned in previous MADD platforms, or is this new?

This is new. It's something that we are watching. We're going to publicize the fact that MADD seems to be working with the liquor people.

Every time we talk about the .08 mandate or the legal drinking age, the lobbyists for DISCUS tell us, "we can't talk about that, it's too controversial." They don't say, "We're joined at the hip with MADD," but I think they are doing it because of that devil's bargain they made a few years ago, supporting .08 at the state level.

We now have distillers allied with brewers in producing malternatives, is equalization as desirable to them as it once was?

My sense is that could make so much more money or spirits, that they would be willing to take the hit on malternatives. Plus, many of these are licensing arrangements for the name, so it's not based on unit sales for them. Guinness UDV and Brown-Foreman aren't up on Capitol Hill pressing for equalization. It's all DISCUS. I don't know if DISCUS is acting as a stalking horse for a particular company or a group of companies. But DISCUS are the real bad guys here.

How powerful is MADD these days?

I think they are less powerful than they were 10 years ago. The statistics are trending in the right direction, and it's clear that they are making a difference and the beer industry is making a difference. So now we're seeing them getting a bit more extreme in their rhetoric. I think this will hurt them in the long run.

Is power in D.C. these days measured by the size of your PAC?