Economics

A-B Bets Big on Excise Tax Relief

Most companies cut back their lobbying budgets but according to Aimee Duffy of The Motley Fool, Anheuser-Busch InBev is spending heavily in favor of two tax measures currently before Congress.

Readers of this blog are probably aware of the Brewers Excise and Economic Relief (BEER) Act of 2013, which would cut the federal beer tax in half, and give small brewers an even more generous tax break; and the Small Brewer Reinvestment and Expanding Workforce (Small BREW) Act of 2013, which would reduce the beer tax by 50 percent on the first 60,000 barrels and by 11 percent on each barrel beyond that.

According to the website govtrack.us, the BEER Act has zero chance of getting through Congress, and the Small BREW Act has only a 2-percent chance. In spite of those odds, A-B spent $4.3 million on lobbying, most of it to make sure these bills pass.

Duffy finds method in A-B’s madness. If the BEER Act passes, the company’s tax bill would drop by around $500 million a year–more than a 10,000 percent return on a $4.3 million lobbying investment.

The Friday Mash (Oregon Edition)

One hundred and fifty-five years ago today, Oregon was admitted to the Union as the 33rd state. An impressive 47 percent of the beer poured in the Beaver State is craft beer, most of it locally brewed; and Portland, the state’s largest city, has become a top destination for beer travelers.

And now….The Mash!

We begin in Pennsylvania where, after a 29-year hiatus, D. Yuengling & Son is again making ice cream. It’s so popular that the first 100,000-quart run rolled off the line ahead of schedule.

The Stochasticity Project has released its first beer, Grapefruit Slam IPA. The beer, which checks in at 8.2% ABV and 95 IBUs, will be available nationwide.

Bear Republic is the first brewery to buy the Eco-Volt system, which uses microbes to convert dissolved carbon in wastewater into biogas, which can be burned to make electricity or heat.

The Beer Store, Ontario’s provincial retail monopoly, warns that if grocery and convenience stores are allowed to sell beer, consumers will have to pay an extra C$10 (U.S. $9) a case.

Francis Rossi and Rick Parfitt, who performed as Status Quo, are the latest celebrity beer makers. Piledriver ale, named for their 1972 album, is brewed by Wychwood Brewery of Oxfordshire.

Fans at the Winter Olympics can escape bland food by journeying to the nearby town of Adler, where “Draft Beer & Fish” has 16 beers on tap, most of them locally brewed.

Finally, clear your desk and take out a number-two pencil. John Metcalf of The Atlantic has a ten-point craft beer quiz that emphasizes the strange ingredients brewers are using.

Macrobeer Sales: Not So Super

For decades, big brewers have been big advertisers at the Super Bowl, and this year’s game is no exception. However, their products are steadily losing market share, especially among drinkers younger than 30.

Quentin Fottrell, a correspondent for MarketWatch.com, identifies several reasons for Big Beer’s declining popularity. One, of course, is growing popularity of craft beer. If this segment didn’t exist, beer sales would be on a downward course. (And if craft beer didn’t exist, neither would this site, but I digress.) Another factor is competition from the hard liquor industry, which ended its self-imposed ban on television advertising in 1996; and from wine, which has acquired a “halo effect” as a beverage associated with healthier living. Calorie-conscious drinkers have also hurt sales. Non-alcoholic drinks, bottled water in particular, have taken market share away from beer.

Why Isn’t Craft Beer Served in Pitchers?

Why is craft beer served in shaker pints or other glassware and not a pitcher? BrewProf has the answer. Actually, he has more than one answer.

To begin with, a pitcher doesn’t make sense from a quality-control perspective. Beer’s two worst enemies, light and oxygen, thrive in pitchers. Economics also play a role. Many bars sell a pitcher of national-brand beer for well under $10, but with craft beer priced at $4-5 a pint these days, a pitcher might carry a price tag of $20–and give customers a case of sticker shock. Liquor laws are another factor. Even if there aren’t restrictions on pitcher sales, some establishments are reluctant to serve four-pint portions of high-gravity ale. Then there’s an element of beer snobbery: some craft beer drinkers associate pitchers with macrobrews and shy away from them.

Despite all those drawbacks, BrewProf gives pitchers a qualified thumbs-up. If it’s not too warm out and you’re drinking with friends, pitchers save drinkers trips to the bar and make life a little less hectic for bar staff.

A Craft Beer Bubble?

America has never had more breweries than it has today, and the quality of beer at your local bar has never been better. But will the good times last? Some observers think the craft-brewing industry is in the midst of a classic bubble that might be about to burst.

Noah Davis of Business Insider points that for every Alchemist, brewers of the wildly successful Heady Topper double IPA, “there are numerous small breweries turning out solid product that will never see a profit.” Davis wonders how the hundreds of breweries that opened this year, not to mention another 1,500 in the planning stages, are going to find distributors, get shelf space, and sign up tap accounts. The newcomers, he adds, are entering a craft beer market that is dominated by a few big players.

Industry figures believe the days of double-, and even triple-digit growth won’t last much longer. John Laffler, who opened a craft brewery in Chicago last year, said, “I see the industry becoming more local, more regional, more city-specific. At that point, you’re locked in making $35,000 a year and hopefully your business can last 10 years.”

Some startups might not survive. According to Greg Koch, the founder of Stone Brewing Company, “You can expect that consumer fatigue will show up again, just like it did in 1996. It’s like a school of fish. It will turn, but you don’t know when.” The industry shakeout of the late 1990s resulted in some 300 brewery closures.

The Friday Mash (Belgian Edition)

On this day in 1830, the Kingdom of Belgium declared its independence from The Netherlands. Since then, Belgium has acquired quite a reputation for its beer.

And now…the Mash!

We begin in Florida, where the Jacksonville Jaguars offered free beer to fans who bought tickets to their game against the Colts. The Jags lost, and the free beer didn’t help attendance.

Raise the price of beer and people drink less of it, right? Not at Oktoberfest, where per capita consumption went up even though the price of beer rose much faster than the rate of inflation.

According to Zoosk.com, people who drink microbrews are more likely to have one-night stands. They’re also more likely to prefer outdoor adventures on a first date.

Beer and books? Yes, please. Atomic Books and Red Emma’s, two independent bookstores in Baltimore, plan to serve beer along with their hardcovers, paperbacks, and comic books.

The Esquire Network’s lineup of shows includes Brew Dogs, which stars James Watt and Martin Dickie of Scotland’s BrewDog brewery. Their first episode was filmed in San Diego.

Fast Company magazine has prepared an infographic contrasting the effects of beer and coffee on the human brain. Did you know that beer (in moderation) makes you more creative?

Finally, if you’re going to the Great American Beer Festival, take note: the Ritz-Carlton in Denver is offering 75-minute “ex-beer-iences”, either a massage or a pedicure with Great Divide beer.

The Friday Mash (Cal Ripken Edition)

On this day in 1995, Cal Ripken, Jr., of the Baltimore Orioles played in his 2,131st consecutive game, breaking a 56-year-old record set by Lou Gehrig. Ripken’s streak ended at 2,632 games, a record that many fans think will stand for all time.

And now…the Mash!

We begin in Auburn, Alabama, where fans of the visiting Washington State Cougars drank Quixote’s Bar dry, forcing it to close four hours early. Unfortunately, WSU lost the game, 31-24.

San Diego’s Museum of Man has an exhibit titled “BEERology”, which runs until next summer. Erin Meanley of San Diego magazine reviews it.

People have gotten married at the Great American Beer Festival, but this year, St. Arnold Brewing Company will have a wedding chapel on the festival floor.

Italy’s latest culinary invention is a beer that can be spread like chocolate cream. There’s no American distributor–yet–but the UK’s Selfridges will ship it to you for $51.

For years, big breweries have argued that mergers lower prices. However, researchers have found that the 2008 merger creating MolsonCoors resulted in a short-term price spike.

Drinking Buddies, starring Olivia Wilde, is a romantic comedy about craft brewery workers. It was shot at Revolution Brewing, and other Chicago microbrews make cameo appearances.

FInally, Seattle Seahawks fans should rejoice. TheDailyMeal.com has ranked Century Link Stadium’s craft beer selection best in the NFL, and Yahoo! Sports ranks the Seahawks number-one.

The Friday Mash (Pygmalion Edition)

On this day in 1856, Irish playwright George Bernard Shaw was born. Shaw was also a journalist, a co-founder of the London School of Economics, and the only person awarded both the Nobel Prize for Literature and an Academy Award, the latter for the film version of his play Pygmalion.

And now….The Mash!

We begin in Oxford, Mississippi, which may finally legalize the sale of cold beer. That could end a time-honored tradition: road trips to neighboring counties for a cold six-pack.

Speaking of cold beer, concession stands at Dodger Stadium are selling beer topped with ice-cold foam, which keeps the drink cold for half an hour.

North Korean leader Kim Jong-un is crying in his beer after his request for a Paulaner biergarten was turned down by the brewery.

The Monte Carlo, a casino on the Las Vegas Strip, sells $95 bottles of beer. The beer is La Trappe Isid’or, a pale ale created by Dutch monks in 2009 to celebrate their abbey’s 125th anniversary.

This year’s trend is session IPAs. Founders Brewing Company, best known for high-gravity stouts, announced that All Day IPA (4.5% ABV) has become its biggest seller.

Consumer alert: Big banks are jacking up the price of your six-pack by manipulating aluminum prices. How they do it is bizarre, and apparently legal.

Finally, Tim Marchman of Deadspin.com marks the passing of actor Dennis Farina by recalling a funny Old Style commercial in which Farina went to his local bar to drive off out-of-towners.

A Brewery Grows in Brooklyn

Economic reality forced many brewery entrepreneurs to set up shop in run-down urban neighborhoods where rents were low and residents–if there were any–were unlikely to object. It turns out that some of those breweries have revived their neighborhoods.

One example is Brooklyn’s Williamsburg section, where Brooklyn Brewery opened in 1996. At the time, its neighbors were mostly deserted warehouses and factories. Today, Brooklyn Brewery is surrounded by modern apartment buildings, bars, shops and restaurants. New residents are willing to spend money–a lot of it–to live there.

Cleveland’s Ohio City district, west of downtown, is another. Great Lakes Brewing opened in 1988. Its owners built a brewery and a brewpub from structures that once housed a feed store, a saloon, and a livery stable. Other businesses followed. Ohio City has actually gained population, even as the city as a whole lost population.

Other examples include South Boston (Harpoon Brewery); San Francisco’s SoMa (21st Amendment Brewery); and coming soon, the South Bronx’s Mott Haven section (Bronx Brewery).

The Friday Mash (P.T. Barnum Edition)

On this day in 1810, promoter P.T. Barnum was born. He’s best known for founding Ringling Bros. and Barnum & Bailey Circus, but his colorful life story also includes stints as a politician, businessman, reformer, and perpetrator of hoaxes.

And now….The Mash!

We begin in Tennessee, where new legislation lessens the tax bite on beer. The old law, which based tax on the price of beer, saddled the Volunteer State with the nation’s steepest tax.

The staff of FirstWeFeast.com has scoured the country to find unsung cheap beers. The list is dominated by regional beers like Point Special, Iron City, and Genessee Cream Ale.

The Festival in Portland, Maine, opened late on account of archaic regulations that bar breweries from pouring their own beer. Organizers scrambled to find volunteers for beer-dispensing duty.

What is it like to ride on the beer train? Scott Rappold of the Colorado Springs Gazette describes his trip on the Rio Grande Scenic Railroad’s annual “Rails to Ales” outing.

Another television series will have its own beer. Albuquerque’s Marble Brewery will brew Heisenberg’s Dark, an India black ale named for Walter White’s drug-dealing alias in Breaking Bad.

Hawaii is surrounded by ocean water, and Aloha Brewing Company is using it to brew Gose beer, a style that originated in Goslar, Germany, whose water is naturally salty.

Finally, a Czech hockey team was forced to leave town because of a dispute over beer. The club played in Budvar Arena, but their league was contractually obligated to serve a competing brand.

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